While a Huawei executive faces possible US charges over trade with Iran, Chinese tech giant’s ambition to be a leader in next-generation telecoms is colliding with security worries abroad
While a Huawei executive faces possible U. S. charges over trade with Iran, the Chinese tech giant’s ambition to be a leader in next-generation telecoms is colliding with security worries abroad.
Australia and New Zealand have barred Huawei Technologies Ltd. as a supplier for fifth-generation networks. They joined the United States and Taiwan, which limit use of technology from the biggest global supplier of network switching gear. Last week, Japan’s cybersecurity agency said Huawei and other vendors deemed risky will be off-limits for government purchases.
None has released evidence of wrongdoing by Huawei, which denies it is a risk and has operated a laboratory with Britain’s government since 2010 to conduct security examinations of its products. But the accusations, amid rising tension over Chinese technology ambitions and spying, threaten its ability to compete in a sensitive field as carriers prepare to invest billions of dollars.
“This is something that’s definitely concerning Huawei at this stage, because there is a political angle to it and a business angle,” said Nikhil Bhatra, a senior researcher for IDC.
Huawei is no ordinary electronics supplier. The company founded in 1987 by a former military engineer is China’s first global tech brand and a national champion at the head of an industry Beijing is promoting as part of efforts to transform this country into a technology creator. It has China’s biggest corporate research-and-development budget at 89.7 billion yuan ($13 billion) in 2017 – 10 percent more than Apple Inc.’s – and foreign customers can draw on a multibillion-dollar line of credit from the official China Development Bank.
That puts Huawei at the heart of strains over the ruling Communist Party’s technology aspirations, competition with Western economies and ties between companies and government, including possibly spying.
A European Union official, Andrus Ansip, expressed concern that Chinese rules requiring telecom equipment suppliers to cooperate with intelligence services would involve possible “mandatory backdoors” in computer or telecom systems.
“Do we have to be worried about Huawei and other Chinese companies? Yes, I think we have to be worried,” said Ansip, the trade bloc’s vice president for a digital single market.
The company says it is employee-owned and operates independently.
