War over Middle Kingdom's 5G gear heats up

By Kieren McCarthy in San Francisco 29 Apr 2019 at 21:19

Analysis

Fallout over a leaked decision by the UK government to allow equipment from Chinese manufacturer Huawei into Britain's "non-core" 5G networks has continued into a second week.

On Monday, deputy assistant secretary at the US State Department Robert Strayer told the press that as far as America was concerned there is no difference between core and non-core networks, and again issued a threat to withdraw intelligence sharing from the Brits if their government approves the use of Huawei networking equipment.

"It is the United States' position that putting Huawei or any other untrustworthy vendor in any part of the 5G telecommunications network is a risk," Strayer said. "If other countries insert and allow untrusted vendors to build out and become the vendors for their 5G networks we will have to reassess the ability for us to share information and be connected with them in the ways that we are today."

The statement comes amid a political row in the UK over how the decision to allow Huawei equipment onto the majority of its 5G networks emerged in public in the first place. The green light was was given at a secret meeting of the National Security Council (NSC) last week, but details found their way into journalists' hands so quickly that the decision itself was nearly overrun by outrage over the fact it leaked.

Those with the most to gain from leaking the information – those opposed to the decision, including cabinet ministers Jeremy Hunt, Sajid Javid, Gavin Williamson, Liam Fox, and Penny Mordaunt – have all denied being the source.

But in a sign that the process is being closely watched by all sides, the Chinese government used an editorial in the Global Times on Monday to make its views known on the leak's providence: the US intelligence services.

"The decision to involve Huawei in 5G is more likely a matter of loyalty to the US. Washington demands that all its allies suppress Huawei. Some contend these diplomatic considerations should dominate the UK's final decision," the editorial reads before stating:

"Such unprecedented leaks reflect the ability of the US to intervene in UK affairs. Washington can infiltrate the UK's most confidential meeting and leak the information to the press in order to trigger immediate resistance from the opposition."

Brexit Britain

On the one hand, this could be Beijing spit-balling or muddying the waters. Journalists were being quietly briefed on all sorts of issues last week, as GCHQ's National Cyber Security Centre was holding a computer security event in Scotland for the media at the time, and it was Britain's Daily Telegraph that broke the news of the NSC decision on Huawei.

On the other hand, it is an extraordinary thing to consider, bonkers even: that the US intelligence services have infiltrated the UK government at the most senior levels to the extent that cabinet ministers would put foreign interests ahead of their own government. But this is the era of Brexit Britain and anything is possible.

It would certainly be in the United States' interests to have the details of the NSC meeting made public immediately in order to rally support behind those opposed to Huawei in an effort to pressure UK prime minister Theresa May to change her mind before the policy is set in stone.

And the renewed threat to withdraw intelligence sharing – something that is unlikely to happen in reality – is seemingly geared to empower those in a position to pressure Theresa May to backtrack on the decision. May's government is highly unstable at the moment thanks to the ongoing Brexit mess and she needs as much political support as she can get.

The UK's decision is particularly important in the larger global battle between the US and China as it could prove to be the tipping point for a host of other countries in deciding whether to allow Huawei equipment into their next-generation mobile networks.

Europe has already made it plain that it will reject overt US pressure. EC president Jean-Claude Juncker said late last week that he would not block Chinese companies if they follow market rules. "We are not rejecting someone because he is coming from faraway, because he is Chinese, the rules have to be respected," Juncker told reporters when asked specifically about US pressure over Huawei and 5G networks.

Juncker's comment reiterate the position of German chancellor Angela Merkel who has also made it clear that she will not approve a ban on Huawei.

But the US campaign has had some success: Australia and New Zealand have agreed to a Huawei equipment ban and the reason they gave was the same being pushed by the US: that the equipment represents a security risk.

Follow me down the rabbit hole

The logic is that Huawei is compromised by the Chinese government. At the lowest level, the US has argued that Beijing is in the position to force Huawei to add backdoors to its network at some future point so that Western networks can be spied upon from afar: something that Huawei categorically denies. Such backdoors could be used by China to obtain Uncle Sam's intelligence from its allies.

That argument by the Americans has not held sufficient water in Europe, however. The UK and German intelligence services have held their own assessments and concluded that, despite some concerns, any security risks can be mitigated. Hence the distinction between "core" and "non-core" networks – which basically means keeping Chinese equipment out of any networks used to share confidential government information.

While that is a good compromise from the UK's perspective, such "core" networks represent a very small percentage of total investment in mobile networks. The vast majority of networks are used by the general public and are "non-core."

The fact that the US is now refusing to allow a distinction between core and non-core only reinforces the suspicion that the US-led campaign is more about economics than security. Chinese 5G equipment is just as good as US telecom equipment but it is much cheaper. And the rollout of 5G networks over the next decade is worth tens of billions of dollars.

And so in recent weeks, the rhetoric has escalated. US intelligence sources have started briefing politicians and news outlets that Huawei is funded directly by the Chinese security services. Evidence on that point is thin to non-existent. And there have been a slew of articles claiming that Huawei is secretly controlled by the Chinese government and isn't in fact a private company.

That story follows a pattern that anyone who has followed the UK intelligence services actions for the past 50 years will recognize: a report written by someone with close connections to the defense industry that is then covered by news outlets that have long fostered a relationship with the security services. It is nearly always The Sunday Times. As indeed it was this Sunday.

"The Chinese telecoms giant at the center of a row over plans to allow it to supply technology for the UK’s new 5G network almost certainly acts on behalf of its national intelligence agencies, according to a report co-authored by a former government security adviser," the relevant article begins.

Chipped varnish

In this case the report was written by Peter Varnish OBE for the Henry Jackson Society. The Henry Jackson Society, despite being a British "think tank" is named after an American senator who was a liberal hawk and the organization acts as an influence by US conservative forces within the UK political system.

It has close connections to both the UK and US security services. Its "statement of principles" when it was founded in 2005 were signed by, among others, the former head of MI6 Sir Richard Dearlove and "patrons" include former Reagan defense official Richard Perle, US neocon Bill Kristol, and former CIA head James Woolsey. In 2017, The Henry Jackson Society was accused of pushing anti-China propaganda.

Its report in this case claims that Huawei is secretly controlled by the Chinese government. How? Using the logic that the company is almost entirely owned by a trade union and trade unions in China operate underneath the Communist Party.

As such the report's conclusion that it is "high to certain that Huawei acts on behalf of China's intelligence organs," should be read for what it is: a calculated effort to introduce FUD (fear, uncertainty, doubt) into the debate over Huawei.

Whichever way you look at the Huawei question, however, the same two basic facts emerge:

1. The current US administration has decided to aggressively pressure other governments to drop Chinese manufactured 5G equipment, and its core argument is that it represents a security risk. And certainly not anything to do with Huawei kit being cheaper than American products, and as good as if not better in terms of features.

2. There is no evidence that there is anything but a theoretical security risk posed by such equipment.

The Chinese government has largely stayed out the way and instead allowed Huawei representatives to argue their own case that their products are not tainted and that they have autonomy from the Communist Party.

But with US administrative efforts straying into leaks, misinformation and renewed public threats to withdraw intelligence, the Chinese government has started issuing its own warnings. The Global Times editorial this morning notes: "On the Huawei issue, there are two types of countries: those that follow the US and boycott Huawei and those that do not. China's attitude toward these countries should be different."

It goes on: "The economic cooperation that China provides concerns its core interests. Any country that follows the US in order to hurt China should pay the price no matter how nicely they talk."

In short, Huawei and 5G have become a proxy battle for global economic dominance between the US and China. And the UK is stuck in the middle. And, of course, Brexit only makes it that much worse since it can't throw its lot in with Europe. ®