THE THREAT OF HUAWEI: Have you ever heard of company called Huawei?
Inside the US, you probably haven’t heard of them unless you’re a tech enthusiast.
But, outside the US and especially in Asia, they ginormous.
In fact, a few years ago, they overtook Apple and became the world’s second largest smartphone
seller, only beaten out by Samsung.
And during the pandemic, they furthered their lead by overtaking Samsung as well.
While this is awesome for Huawei and China, it may not be all that great for the rest
of us.
If you’ve been following international news, you probably know that Huwaei has a sketchy
past when it comes to surveillance and data collection.
Now, this is nothing new given that basically every tech company does this, but there’s
one key difference between most tech companies and Huawei.
Most companies collect your data to craft effective marketing campaigns and sell you
stuff.
Conversely, Huawei allegedly collects your data for the Chinese Communist Party.
In fact, in 2019, the US actually outright banned Huawei in the country.
Since then, tensions had been cooling down, and Huawei was getting a break.
But more recently, the pendulum has swung in the other direction once again.
In late 2022, the US charged two Chinese intelligence officers for trying to steal data regarding
the case against Huawei.
Technically, we don’t know if this case has to do with Huawei.
The US only disclosed that it had to do with a large Chinese telecommunications company,
but it’s assumed that they’re probably talking about Huawei.
It’s not just court cases that they’re apparently spying on either.
The US accuses that China is using Huawei to also spy on radio communications from military
bases, missile silos, and who knows what else.
And with Huawei becoming the largest smartphone producer in the world, this threat is only
growing larger by the day.
So, here’s how Huawei rose to overtake Samsung and Apple, and how they could be using their
marketshare to spy on the world for China.
PROTECTING CHINA: Taking a look back, the story of Huawei dates
back to September of 1987 to a man named . At the time, China was desperately trying to
develop their technology and economy.
For the past few decades, China had fallen quite behind due to internal conflict and
the communist revolution.
But, moving into the 1980s, China wanted to change that by embracing the free market to
a degree.
One of these efforts centered on trying to develop China’s telecommunications infrastructure.
Ren, a former deputy director of the People’s Liberation Army engineering corps, was familiar
with the effort and decided to leverage the situation.
He got together a couple of investors and raised a total of $5000 to start Huawei.
You might be thinking that $5000 isn’t all that much money especially to develop new
telecommunications technology, and you’d be right.
The point to note though is that Ren had no intention of developing anything himself.
Instead, his plan was to acquire foreign tech and reverse engineer it using local researchers.
And when I say reverse engineer, I don’t mean trying to understand the tech and creating
something new.
I mean blatantly ripping off competitors and creating counterfeits.
Ren’s first target was a new telecommunications startup called Qualcomm, you may have heard
of them.
It turned out that trying to copy technology itself took quite a bit of time.
So, to start bringing in some revenue, Ren started to resell private branch exchange
or PBX switches that he imported from Hong Kong.
This revenue allowed the company to grow their reverse engineering team substantially up
to 600 people.
In terms of a company name, Ren simply settled on a slogan that he saw that would play well
with the public.
The original slogan was Zhonghua youwei which means “China has promise”.
Ren altered to this Huawei or as it’s properly pronounced Wah-Way which translates to “China
is able.”
The CCP was likely fans of this name, but that’s not the only thing that attracted
them to Huawei.
By 1993, the company would successfully create their own telephone switch knockoff which
was magnitudes better than anything else in China.
Huawei turned around and deployed these switches across small cities and rural areas where
there wasn’t much competition from the existing players.
But, likely their biggest and smartest move was partnering with the People's Liberation
Army.
In terms of revenue, this deal wasn’t all that lucrative, but in terms of connections
and influence, this deal was insane.
The story goes that when Ren was pitching the CCP on telephone switch, he told them
quote “switching equipment technology was related to national security, and that a nation
that did not have its own switching equipment was like one that lacked its own military."
Reportedly, the CCP official agreed, but if that’s the case, why in the world is Huawei
trying to get other countries to use their telecommunications equip.
Yeah, I think you can see where this is going.
INFILTRATING COUNTRIES: It appears that China truly did believe in
Ren’s statement as they would triple down on Huawei and domestic switches.
In fact, in 1996, China adopted an explicit policy that supported domestic manufacturing
and restricted access to foreign options.
Given that Huawei was the only Chinese company that was producing equipment that was comparable
to foreign counterparts, Huawei became the go to company for both the government and
the military.
They weren’t just making strides within China either.
Starting in the late 1990s, Huawei would aggressively expand to developing countries in Sub-Saharan
Africa and the Middle East.
These countries were easy targets given that most of them couldn’t afford western versions.
So, there was really only two options.
Either you take the help from the Chinese or you put off development.
Obviously, they went with the first option.
What’s surprising though is that western countries would soon jump onto the Huawei
bandwagon as well.
One of the first countries to fall was Canada when their telecom giant Nortel outsourced
their entire production and engineering to Huawei.
It appears that higher profit margins was simply something that many western companies
couldn’t turn down.
Don’t be fooled though, switching to Huawei was usually a terrible decision.
And it’s not even a conspiracy theory as its usually blatantly obvious, though Huawei
of course always denies everything.
Take Nortel for example.
Shortly after making a deal with Huawei, Chinese hackers would begin stealing hundreds of sensitive
internal documents from Nortel for a period of atleast 10 years.
According to Huawei, this hacking has nothing to do with Nortel’s deal with them, but
you can take that for what you will.
To make things worse, it wasn’t just Nortel that Huawei was allegedly spying on.
Huawei may have gained access to Canada’s National Defence through Nortel.
Reportedly, listening devices were found in Nortel’s Ottawa R&D complex.
This complex worked extremely closely with Canada’s national defence, so much so that
after Nortel filed for bankruptcy largely due to corporate espionage, this building
would become Canada’s national defence HQ.
For obvious reasons, Canada isn’t letting Huawei come anywhere near their 5G networks.
Canada wasn’t the only country to learn the hard way.
Around the same time that Nortel signed their deal with Huawei, dozens of western companies
were signing deals with them as well.
At first, this started off with background players like UK’s Vodafone, Australia’s
Optus, Norway’s Telenor, and Japan’s Panasonic.
But, this quickly grew to encompass all of the American giants as well including Google,
Facebook, Qualcomm, Intel, and Microsoft.
Since then, each and every one of the companies that I just listed have cut their ties with
Huawei either due to getting burned themselves or due to government bans.
So, fortunately, it looks like companies and countries started wising up to Huawei in the
late 2010s.
But, this didn’t matter given that Huawei had already shifted to a completely different
ball game.
INFILTRATING THE WORLD: From the very beginning, Huawei knew that
the endgame was to reach end users.
They couldn’t quite do this from the very beginning given that creating consumer tech
and reaching everyday people is expensive.
But, thanks to all of these contracts with companies and governments, Huawei was able
to infiltrate the consumer market.
And given that they were a telecommunications company, their product was obviously cell
phones.
Huawei didn’t actually start with smartphones.
In fact, their first cell phone, the C300 came out way back in 2003.
They followed this up with a 3G phone called the U626 and a 3G handset called the V710.
These products performed alright in China and some parts of Europe, but Huawei’s breakthrough
didn’t come until the introduction of smartphones which they were perfectly positioned for.
They were already in the telecommunications market, they were already in the cellphone
market, they had full backing from the CCP, and they had an international presence.
Also, the company was mature enough where they didn’t have directly copy competitors.
Instead, they could take inspiration and incorporate their own twist which is exactly what they
did with the U8220 in 2009.
Since then, Huawei has become a leader when it comes to incorporating the latest networks,
cameras, charging, and even designs.
And the reason that their smartphones are so popular isn’t rocket science.
They make great phones that are usually cheaper than the competition, it’s that simple.
And today, they regularly ship more than 200 million phones every single year.
I don’t think you’d be surprised to hear that they’ve expanded to selling much than
smartphones either.
They’ve got laptops, tablets, watches, and even a car.
So, Huawei isn’t going anywhere anytime soon, but what does this mean for all of us?
Well, whether Huawei wants to admit it or not, they’re likely going to spy on and
surveil as many people as they can.
Many people who buy Huawei products are well aware of this, but they don’t really care.
They usually figure that even if it’s not Huawei that’s spying on them, it’ll be
companies like Google, Facebook, and Oracle.
So, they might as well forget about trying to protect their privacy and instead just
focusing on buying the best product for the best price.
So, that answers the consumer side of things, but what about Huawei’s side of things:
Why spy in the first place?.
WHY SPY?: Clearly, Huawei is extraordinarily popular,
so why resort to allegedly spying for the CCP?
At the end of the day, they’re a hardware company not a software company, so they shouldn’t
need to collect data right?
Well, the answer is that they have no choice.
It was the CCP who made Huawei into who they are today and CCP can bring back Huawei to
0 if they wanted to.
And if you don’t believe me, just look at Jack Ma and Alibaba.
Over the years, the CCP has provided Huawei with $46 billion in loans along with $25 billion
tax cuts.
And who knows how much revenue the CCP has brought Huawei in the form of government contracts.
Also, we should not that this has always been a one sided relationship.
While Huawei is dependent on the CCP, the CCP is not dependent on Huawei.
They CCP didn’t put all of their eggs in one basket as they also have giants like Tencent,
JD.com, Alibaba, TikTok, and the entirety of the Chinese financial system.
So, China basically owns Huawei, and Huawei has to do what the CCP says regardless of
how that will affect their own reputation or public image.
Looking forward, while countries are doing their best to hamper Huawei’s influence,
it’s not easy to mitigate the control you get from having access to billions of users
and decades of telecommunications infrastructure.
And given that most consumers just see Huawei as another Facebook or Google, it’s unlikely
that we’ll see much resistance from the general public either.
So, its safe to say that Huawei wont have much trouble maintaining their dominance and
allegedly reporting their findings to CCP.
Would you rather give your data to Huawei or Facebook?
Comment that down below.
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