The arrest of Huawei’s chief financial officer Meng Wanzhou in December in Canada and early January the news that Polish officials had arrested a Huawei employee on espionage charges started a spiral of events that was unexpected. On January 28, the US Justice Department unveiled indictments accusing the company of systematically violating US sanctions against Iran and stealing trade secrets from its US business partner T-Mobile.
The arrest of Meng prompted an outcry from Chinese officials, who painted her arrest as a cynical power play. The response from Beijing was swift: Almost immediately after Meng was picked up in Vancouver, China detained two Canadians in what was widely seen as a retaliatory measure. A few weeks later, a third Canadian was sentenced to death for drug smuggling.
There is growing tensions and mistrust between the West and China in matters of technology and national security driven by the fear that Chinese companies cannot truly be independent from the Chinese state.
The global economy is set to rely more and more on fifth-generation (5G) mobile networks, which enable large machine-to-machine data flows at ultra-fast speeds. As the world’s largest producer of the telecom equipment needed to operate such networks, Huawei is a colossal player in the global race for 5G dominance. As of late 2018, the company boasted 28 per cent of the global market for telecom equipment.
Back in 2012, the intelligence committee of the US House of Representatives issued a report warning that Huawei might install “malicious implants” in critical network infrastructure that could undergird everything from smart electric grids to autonomous vehicles and the commercial networks on which US military communications and logistics depend.
The focus on Huawei has gone global with Australia and New Zealand barred Huawei from supplying 5G equipment. Canada, Norway, and the UK are now conducting security reviews of Huawei’s 5G technology, and the French, German, and Polish governments are considering bans of their own.
The current show of unity is all the more striking given that there is no smoking gun incriminating Huawei – no public evidence proving, say, that the company is rigging its hardware or spying on behalf of the Chinese government.
Western governments are likely driven by a broader concern: The Chinese Communist Party’s deepening control over China’s corporations and other ostensibly non-governmental institutions. There is good reason to worry.
The US, for its part, should heed the difference between competing and merely whining. On the technological front, this means recognising that Huawei will continue to be a major player in the global market for 5G infrastructure.
US officials should also be sensitive to the danger that friends, and foes alike will interpret the timing of charges against a senior Huawei executive as geopolitical manoeuvring rather than a legitimate, independent law enforcement action. That perception could undercut one of the “soft” advantages the US has in any strategic competition: its deeply institutionalised commitment to the rule of law.
The US and the current administration must be seen globally as a responsible and trusted leader.