The Huawei dilemma: Should the UK be worried?

The Huawei dilemma: Should the UK be worried?

Summary: British telcos, both fixed and mobile, use large amounts of Huawei gear. Given the concerns raised by a US congressional committee, are we in danger?

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Huawei's equipment permeates British broadband infrastructure, both fixed and mobile.

The Chinese giant's gateways are used throughout BT's broadband network and its routers are in hundreds of thousands of BT customers' homes. TalkTalk uses Huawei routers too, and employs the company's technology in its HomeSafe security software. EE's network uses Huawei kit, and all the mobile operators carry or have carried Huawei handsets.

So, given that a US congressional committee on Monday issued a very stark warning indeed about Huawei and its Chinese rival ZTE, how worried should the UK be?

Huawei
Should the UK be worried about the security implications of Huawei and ZTE equipment? Image: Karen Friar

Liberal Democrat peer Tim Clement-Jones, until recently one of Huawei's UK advisors, believes the company is less of a risk than portrayed in the report.

"In my view, I'm very sceptical about the way the US plays this, and most of all Republican congressmen," Clement-Jones told ZDNet on Tuesday morning. "I've sat through many meetings [covering Huawei's organisation and activities] and I think that a lot of this is pure anti-competitive behaviour in the US... They skewed the whole inquiry. They got their facts wrong."

READ THIS: Life at Huawei's Shenzhen HQ: In pictures

The main suspicion raised by the committee is that Huawei and ZTE might, in concert with the Chinese state, have backdoors of some kind in their equipment that would allow Western networks to be spied on and potentially disabled in the case of cyber-warfare.

Here's a quick reminder of the US report's key recommendations (PDF) in this context (other points are on business practices, which we will come back to shortly):

  • Private-sector companies in the US are "strongly encouraged to consider the long-term security risks associated with doing business with either ZTE or Huawei for equipment or services", and network providers should avoid them as vendors as, "based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence".
  • US government systems should most definitely not use Huawei or ZTE equipment, even components. The same should apply to the systems used by government contractors.
  • Neither company should be allowed to merge with or acquire any US firms.

The central issue here is whether Huawei and ZTE are trustworthy. The congressmen who wrote the report suggested this is not the case; this is mainly because the Chinese companies' structures are somewhat opaque and because neither was able or willing to reassure the committee that they are entirely free of Chinese state control.

According to the BBC, the UK parliament's intelligence and security committee has also been looking into the Huawei situation and will report back to prime minister David Cameron by the end of the year.

What did the US report say?

Firstly, the report has a classified annex containing evidence that, if exposed, would apparently compromise US national security. As we cannot read this part, we have to ignore it for now and focus on what we do know.

Huawei's structure is far cloudier than ZTE's because it remains a private business. ZTE has floated on the Shenzhen and Hong Kong stock exchanges, theoretically making it far more accountable and transparent about its dealings.

The congressmen highlighted the background of Huawei's chief Ren Zhengfei, who once worked for the Chinese military. This is far from uncommon in the country, but Ren was invited to the 12th National Congress of the Communist Party of China — something of a future leaders' club — in 1982 and soon afterwards founded Huawei, with great success.

"I think that a lot of this is pure anti-competitive behaviour in the US... They skewed the whole inquiry. They got their facts wrong" — Tim Clement-Jones

Huawei maintains that Ren did not set up the company with the assistance of the party machine, but it remains tight-lipped as to whether Ren is still linked to those lofty echelons. Ren holds less than two percent of Huawei's shares, but he retains a veto.

Both Huawei and ZTE have Communist Party committees within their organisations. Again, there is nothing unusual about this — the party aims to have representatives in every private company with 50 or more employees. However, these cells' ubiquity does not make them any less worthy of suspicion, particularly as neither Huawei nor ZTE was willing to tell their US inquisitors what the cells do for the wider party.

Neither company could demonstrate their independence from the Chinese state, and neither provided clear answers over the connection between their R&D activities and the Chinese military.

Those are the most serious allegations. Others, if true, suggest odious business practices, but they do not reflect on the security implications of using Huawei and ZTE's kit.

These allegations include a disregard by both companies for US intellectual property and export laws and restrictions by Huawei on promotion for those who are not Chinese nationals. In addition, ZTE apparently bid below cost for rural broadband contracts in the US — it seems ZTE's representatives initially admitted this dumping, but then changed their tune when the questioners expressed surprise at ZTE's candour.

The UK situation

Although it does have an R&D relationship with BT, ZTE is not nearly as active in the UK as Huawei is.

Huawei's UK R&D facility originally came from the British government and BT. The company's equipment is, as noted above, widely used within the country.

The Chinese company...

Topics: Security, Broadband, Mobility, Telcos, China, EU, United Kingdom

David Meyer

About David Meyer

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't pay the bills. David's main focus is on communications, as well as internet technologies, regulation and mobile devices.

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18 comments
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  • Of course we are you ninny.

    The moment we in the West sold our soul to save a few $$$ by trading with such a state, whilst invading other nations for lesser crimes.

    The wheels are now falling off the cart.

    Hope the savings were worth it. Not that we saved much in the end, we are debt slaves to China now.
    Bozzer
    • The founder of IKEA was a Nazi

      I really don't think any of this is an issue. People are citing meetings that the CEO (or equivalent) visited, red army type things.
      Anyways, the founder of IKEA was a nazi, and after that, he quit, said he didnt know what he was thinking, and later started a home furnishings store, which is the best in the world.

      They source products from China too. I'm not sure what the hoopla is all about. Seems like a couple of Republican House and Senate representatives have been paid off.

      There's a unwritten rule in the US that if an inventor or engineer leaves a company, they're allowed to take their knowledge and know-how to another company, it's called "Making A Career Move". Many folks at the Huawei R&D facility in The Bay Area are from Juniper, Cisco, Netgear, and other companies.

      Products don't start or live in a vacuum, unfortunately when it's framed as a "National Security Issue" it should raise eyebrows. My guess is that Huawei's equipment is as good or better than ZTE or Huawei's. Likely, ZTE or Huawei are original OEMs for these companies.
      donald duck 313
      • That must be it.

        A couple of Republican House and Senate representatives must have been paid off.

        It is not like China to interfere in the lives and businesses of those living in China. Indeed, China is one of the most open and trustworthy governments on the planet.
        John Zern
  • Yes, it's a threat

    You're naive if you think the Chinese would not place trojan horses or other backdoors into equipment like this. If they are willing to blatantly hack into US satellites, US government & military sites, and private sector industries like they have done in the past, it's not a stretch to see how a hostile government like China could do this.
    Hemo2
    • Talk about naive ...

      So you think that the Americans are not up to the same thing? That they have YOUR best interests at heart.

      Pull the other leg ... the only interests they care about are their own!!

      As for hostile ... remind me again which country invaded and bombed the crap out of sovereign nations recently?
      Pastabake
      • I believe that would have been factions in Afghanistan

        As for hostile ... remind me again which country backed faction invaded and flew hijacked planes into buildings full of people in a sovereign nation recently.

        Is that what you are talking about?
        John Zern
  • Agree

    Even if back doors are only for commercial, and not military purposes.

    You just can't trust a totalitarian regime.

    Heck, you cannot even trust the US government. They spy on anything and anybody they feel like spying on.
    D.T.Long
  • Some Assembly Required

    "How does it make sense to ban Chinese firms from building critical national infrastructure, but be fine with them putting laptops and mobile devices in the hands of most consumers and businesses?"

    Would this include products assembled in China like Apple, Microsoft, etc products?
    JP70
    • software is the key

      As long as they don't outsource their software development to chinese companies, things are not that bad.
      Zephyr0102
      • What about firmware?

        "[F]irmware is the combination of persistent memory and program code and data stored in it".
        http://en.wikipedia.org/wiki/Firmware

        Lots and lots of hardware have firmware. Who do you imagine wrote it all?
        Zogg
  • What?

    We now trust Russians more than Chinese! Kaspersky!
    bugsy007
  • These businessmen and politicians don't care about national security.

    They can sell the whole country for money, if they can, and chinese know how to play political games, just look at these lobbyist who they hired.
    Zephyr0102
  • Re: Given the concerns raised by a US congressional committee..

    Concerns that the UK had the sense to figure out a way to address. Yet the US, it seems, would rather ignore any actual evidence, and just keep on running its HUAC-style operation, just like in days of old. Why let facts get in the way of a good witch-hunt?

    (And Salem happened in the USA as well. Spot the pattern?)
    ldo17
  • free of state control?

    Really depends how the question is put. There is no company in the UK that is free of corporation tax, which is controlled and collected by the UK government.
    Mytheroo
  • Eternal Paranoia

    I've never fully understood the perpetuation of this kind of paranoia...Are we, in fact scared of territorial, or fiscal domination; or is it the same thing? What was Hitler after, for instance? Did he and his imaginary elite want to establish overarching managerial responsibility for every conquered nation? If so, they were clearly stupid. Additionally,the inevitable end result of all successful national economic competitiveness is, what? Your citizens all get to live in luxury while all foreigners starve? Again, clearly stupid. What am I missing. Can we not deconstruct the whole thing and spell it out clearly in order to create balanced dependency for every nation opn earth?
    timbosta
  • Everyone knows that the US is paranoid

    I find this idea quaint - yes foreign countries can be a thread, but in a different way. The Chinese have become a threat, not because of the size of their military which is there mainly to protect their borders and more significantly, control their large and diverse population and prevent groups from expressing themselves. No the threat comes from their industry and their ability to scale up to meet needs, free of all the western restrictions on development. As the Japanese demolished the car industry in the UK they are seeking to become the world's principle manufacturer of electronic products. Unlike motor vehicles logistic costs are quite low so it needs far less in the way of investment in local production outside of China. They are on the same strategy as the Japanese, who allowed their brand to be "low cost - poorly made" to becoming "moderate cost well made" and now "high cost superbly made". The Chinese have moved much more rapidly to the second stage and I can see a time soon when people will covet "made in China" as symbol of quality. That is where the threat lies - to our industry, jobs, skills and employment.
    cymru999
  • It comes down to preference

    Who do you want hacking your phone, data, personal emails etc. The Americans or the Chinese?
    Do you remember the hullabaloo when a hacker in China hacked into gmail accounts? It turned out he was exploiting backdoors that were introduced by Google at the request of the Americans so that they themselves could eavesdrop and hack into anyone's account.
    If the US doesn't like what you've been saying or writing, then remember the UK has an extradition treaty with the US but not with China.

    For the US, they have military power abroad to project, and economic power at home to protect. China is a direct competitor to both, so I'm not surprised the US has taken this view and are probably pressuring others to take the same view.
    justanumber
  • Selective outrage

    "Do you remember the hullabaloo when a hacker in China hacked into gmail accounts? It turned out he was exploiting backdoors that were introduced by Google at the request of the Americans so that they themselves could eavesdrop and hack into anyone's account."

    Good point. I'd rather that nobody spy on private citizens, but it's bizarre how so many people seem outraged that the Chinese are (or might) be doing it, but don't care that the US government have been doing it for decades.
    exolon