China has a way of making Americans nervous. Whether it’s blowing up satellites, cuddling up to North Korea or being accused of fiddling its currency, the United States just doesn’t trust its newest rival for global dominance. And this distrust is playing itself out in the most unlikely of battlefields — including mobile telephony.
Ever heard of Huawei (pronounced hoo-ah-way)? Most people haven’t, but chances are you’ve used one of its products without even realising it. It is a leading supplier of 3G devices such as the dongles and “speed sticks” that millions of South Africans use to connect to the internet. Turn yours over now, and you may be surprised to see Huawei’s flower-like logo on the bottom.
Yet consumer products are a relatively small portion of this $28-billion-a-year juggernaut’s revenues. Huawei is now the world’s second largest supplier of “mobile infrastructure” — the kit that does the heavy lifting work for mobile phone and data networks.
As with many other Chinese firms, quality used to be an issue with Huawei’s products, but no longer. In November 2009 it won a bid to supply Norway’s Telenor ASA with wireless network equipment. Given that Telenor is the sixth biggest mobile network in the world, and that Huawei was competing against Nokia and Siemens for the deal, we can safely put the “cheap and shoddy” label to bed.
Convenient stain
So what does any of this have to do with America’s national security? Well, both everything and nothing. When Huawei wanted to acquire 3Com, a US-based electronics manufacturer, in 2008, the deal was blocked by Congress. Congress was particularly concerned that Huawei’s founder — Ren Zhengfei — had been an engineer in China’s People’s Liberation Army (PLA), and that the company had a number of contracts with the PLA.
Never mind that Zhengfei’s family have long been ostracised by the Communist Party for supporting Kuomingtang, China’s erstwhile Nationalist party. The stain of the PLA is too convenient an excuse for politicians and regulators to ignore — particularly when it shields their own local industries.
And the US isn’t alone. India, Russia, Australia and the United Kingdom have all moved to block or investigate Huawei’s activities in their own markets. Just last week Huawei offered to install a mobile phone network in London’s underground train system for free, as a gift from one Olympic host nation to another. Predictably this raised hackles in the Conservative Party, who share America’s security concerns.
While this may reek of protectionism and paranoia, the Chinese also have themselves to blame. There have been scores of large-scale hacking attacks on Western networks and firms over the last few years. According to WikiLeaks, at least one of these appears to have been sanctioned by the Chinese government.
Is Huawei really a Manchurian candidate, infiltrating the West’s networks under cover of lower prices in order to better wage cyber-war? If so it is the most innovative and efficiently run state enterprise in history. And putting that traitorous Nationalist dog in charge was a stroke of genius — as was starting the company from nothing back in 1988.
Such foresight the Chinese have.
Whether Huawei does pose any kind of threat is largely irrelevant. This a war of perception, and on that front it is losing. In Chinese Huawei can be translated as either “magnificent act” or “China can”.
Pity, in this case, that China probably can’t.