February 12, 2019

Chairman says US is using ‘government machine’ against weak ‘sesame-seed company’

Huawei has lashed out at US attempts to steer its allies away from using the company’s equipment, accusing Donald Trump’s administration of a “co-ordinated, tactical political campaign” against the Chinese telecoms group.

Eric Xu, one of Huawei’s three rotating chairmen, said on Wednesday that warnings this week by Mike Pompeo, the US secretary of state, to eastern European countries against using the group’s equipment were the latest example of how Washington was “using the government machine [against] a small, weak sesame-seed company”.

Washington has been pushing its allies to reject Huawei equipment as the company has become increasingly dominant in 5G, the next generation of wireless technology. Huawei’s chief financial officer Meng Wanzhou, who is the daughter of the company’s founder, Ren Zhengfei, was arrested in Vancouver at the end of last year on sanctions-busting charges. She is currently under house arrest in Canada pending possible extradition to the US.

In a meeting with Hungary’s foreign minister on Tuesday, Mr Pompeo said it would be difficult for the US to partner with countries where Huawei equipment was “co-located” with key American technology.

But Mr Xu questioned the US’s motives on Wednesday, pointing to Washington’s extensive surveillance programmes.

“Is [the US] truly thinking about cyber security and protecting the privacy of other countries’ citizens, or do they have other motives?” he said.

“Some say that because these countries are using Huawei equipment, it makes it harder for US agencies to obtain these countries’ data,” he added.

Mr Xu also revealed that Huawei would spend more than $2bn to restructure the code used in its telecoms services worldwide after a series of “confrontational” meetings with Britain’s cyber security agency over the issue.

The company is likely to face further criticism from the Huawei Cyber Security Evaluation Centre, the UK watchdog that reviews the company’s security systems, which last year noted the “repeated discovery of critical shortfalls” in the group’s technical processes. Last week, Huawei told the UK government it would take up to five years to address the concerns.

According to Mr Xu, the watchdog had demanded that Huawei rewrite the code it uses in telecoms products to be clearer and more readable, including legacy code written decades ago.

Huawei had initially pushed back on the demands, but Mr Xu said that he would now steer the process of rewriting the telecoms code.

Mr Xu also dismissed concerns about Huawei being blocked in Australia and New Zealand, saying: “The Australian market isn’t as big as [the Chinese city of] Guangzhou, and the New Zealand market isn’t as big as my hometown.”

He projected that in the next two years, Huawei’s 5G revenue would primarily come from Asian countries, and very little from developed countries in Europe or the US, which he said “don’t have strong demand for 5G, and aren’t even that developed yet in 4G”.