Huawei is very dangerous
Rarely does a country go to war with a private company
We have met the enemy and it is Huawei
But America has done just that
We’re not going to do business with Huawei
Huawei represents a national security risk
But is this really about Huawei or is it something bigger than that?
It’s not, can you trust Huawei...
...it’s, can you trust the Chinese government
And what is the threat?
This is exactly what China wants
They want to divide Western alliances...
...through bits and bytes, not bullets and bombs
I do not really understand America’s political motivation
So, what is this war really about...
...and why is Huawei in the middle of it?
Founded in China in 1987...
...Huawei is now the world’s largest maker of telecoms equipment...
...with revenues exceeding $103bn
When you think about Huawei...
...you might think about the handset
That makes sense, since it sold 200m of them in 2018 alone
But close to half of its revenue comes from selling network equipment
And it’s this infrastructure side of the company that worries governments...
...much more than the sort of consumer-handset side
With Ericsson and Nokia, it’s one of the three biggest...
...manufacturers of this equipment
In fact, since 2014 it’s outgrown all its competitors...
...reaching over 3bn people
This is how networks function
Your phone sends a signal to a nearby tower using radio waves...
...voice and data are passed over an internal network...
...run by your phone company, which connects your handset...
...to other phone users and the wider internet
In other words, these antennas connect us all
But now, there’s a new kind of network
The race to 5G is moving forward at full speed
From TV ads to presidential tweets
You’ve probably heard debates about the revolutionary 5G
Although 5G is massively overhyped, it is coming...
...and Huawei is a leading force in this innovation
It will be a sort of big change
Maybe not quite so enormous as people like to tell you
The other thing that people like to say that 5G will enable...
...is this idea of the Internet of Things
If you want things like self-driving cars that download detailed maps...
...of where they’re about to be, you need 5G to do that
If you want internet-connected door locks or CCTV cameras...
...maybe 5G is a way to connect those
But though this computerised, smart future opens up new possibilities...
...it comes with a health warning
We’re moving to a world where everything will be connected to the internet
But we haven’t thought enough about security
That’s the big fear about having a hostile power control your 5G network
Because if entire networks are vulnerable...
...this opens the door to countries spying on one another
5G networks must be secure, they must be strong
They have to be guarded from the enemy
In a rare interview with The Economist...
...Ren Zhengfei, Huawei’s founder and CEO, talked about...
...the political storm surrounding his company
I do not really understand America’s political motivation
5G is just a type of technology or product. It is simply a tool
It would be a mistake to politicise 5G
As the argument rages over the security of Huawei’s products...
...the effects can be seen in some unexpected places
The biggest issue, I think with all of this political turmoil...
...surrounding the Huawei name, is uncertainty
Joe Franell runs Eastern Oregon Telecom...
...a small network serving the people of this rural area
In rural, remote areas it’s hard to connect with people
And so the internet becomes this really important way...
...to connect with community
Herb, how are you doing?
The problem is that the network here relies on Huawei technology
So you’re using the internet from Eastern Oregon Telecom...
...to be able to run, monitor, control all of these pivot-irrigation systems
I have no idea how we’d do without it
The Huawei equipment was 30-40% less than everything else on the market...
...and it’s more capable and more reliable
This economic boom that’s out here...
...all of this effective agriculture that’s going on out here...
...would not be effective, or even possible, without internet connectivity
It’s a similar story around the world
Mobile-phone users in developing countries...
...have benefited from Huawei’s attractive deals
But how is Huawei undercutting its competitors?
Huawei can offer cheaper prices because they are heavily subsidised...
...by the Chinese government
These are allegations that are strenuously denied by Huawei
Huawei is Huawei, China is China
Huawei doesn’t have so much glory that it can represent China
Whether or how Huawei is connected to and subsidised by...
...the Chinese government is unclear. But what is clear is this
China is the kind of country where if the party says jump...
...all you can say is, well how high?
Loyalty to the state is actually enshrined in China’s intelligence law
Article 7, a 2017 addition, states that...
...“Any organisation or citizen shall support, assist and co-operate...
...with the state intelligence work”
Critics say this law means that when you buy Huawei equipment...
...you may be exposing yourself to surveillance...
...by the Chinese intelligence services
And this makes governments very uncomfortable
Huawei is just a tool of the Chinese government...
...China is a difficult country for any company to be independent in
And when you look at that, the new intelligence law...
...you’ve got to have some concerns
This has made a lot of people worried that Huawei...
...given its close relationship to the Communist Party...
...and given the Communist Party’s willingness to wield hard power...
...you could then end up in a situation where...
...they can use that effectively as a weapon
The fear is that Huawei will leave backdoor vulnerabilities in its networks...
...that would provide China with an opportunity to spy...
...on its competitors and enemies
To counter this mistrust, Huawei has shared its code...
...and allowed the likes of Britain’s National Cyber Security Centre...
...to scan it for backdoors
We do have researchers that have been going through it...
...with a fine-tooth comb looking for exactly these
They’ve never found anything like that
Even so, the Trump administration remains suspicious
Huawei is something that’s very dangerous
President Trump’s escalating trade war with China
So, if there’s no solid security threat...
...why is America making an enemy out of Huawei?
We cannot allow any other country to out-compete the United States...
...in this powerful industry of the future
At least part of this is motivated by a desire to slow China’s rise...
...and to keep a world in which America is the dominant power...
...for as long as possible
It seems as though the concern over Huawei...
...is not only about America’s security...
...but also its insecurity
And it’s causing collateral damage at home as well as abroad
In May 2019 the Trump administration issued an executive order...
...which not only forbade American companies from supplying Huawei...
...with components, but restricted domestic networks...
...from using its equipment
It’s a move that feels like an own goal to Americans like Joe Franell
Worst-case scenario is there’s an all-out ban
That means that three to six communities that are struggling...
...desperate for broadband connectivity...
...missing out on economic-development opportunities
Having young people flee their community and never come back
It would be a huge hit
And there’s another uncomfortable truth that America can’t ignore
Smartphone technology relies on a truly global supply chain
Take an average smartphone
Some contain components from more than 200 international suppliers
Screens might be made by Samsung in South Korea
The camera lens engineered in Germany
The chip could be designed by a California-based company...
...and manufactured in Taiwan
The battery could come from Japan...
...and the audio chip from China
But increasingly, hostility and lack of trust...
...threaten to fracture these supply chains
This goes beyond Huawei
We are entering a period of increased vulnerability...
...when it comes to cyber security on the internet
America's concerns about Huawei are understandable
But the risks can be managed...
...by limiting the use of Huawei equipment...
...to less sensitive parts of 5G networks
That way it is possible to benefit from the low cost...
...of Huawei’s equipment while minimising security concerns
You know when we start talking about withdrawing...
...and only doing business with companies that are...
...really close allies or companies that are in the United States...
...that damages the global economy and the way that we function as a world
Billions of people around the world have benefited...
...from increased connectivity...
...made possible by global standards and global supply chains
But if political mistrust divides the telecoms industry into rival camps...
...everybody stands to lose