The New York Times reports U.S. Campaign to Ban Huawei Overseas Stumbles as Allies Resist.
Over the past several months, American officials have tried to pressure, scold and, increasingly, threaten other nations that are considering using Huawei in building fifth-generation, or 5G, wireless networks. Mike Pompeo, the secretary of state, has pledged to withhold intelligence from nations that continue to use Chinese telecom equipment. The American ambassador to Germany cautioned Berlin this month that the United States would curtail intelligence sharing if that country used Huawei.
But the campaign has run aground. Britain, Germany, India and the United Arab Emirates are among the countries signaling they are unlikely to back the American effort to entirely ban Huawei from building their 5G networks. While some countries like Britain share the United States’ concerns, they argue that the security risks can be managed by closely scrutinizing the company and its software.
The United States is not ready to admit defeat, but its campaign has suffered from what foreign officials say is a scolding approach and a lack of concrete evidence that Huawei poses a real risk. It has also been hampered by a perception among European and Asian officials that President Trump may not be fully committed to the fight.
Mr. Trump has repeatedly undercut his own Justice Department, which unveiled sweeping criminal indictments against Huawei and its chief financial officer with accusations of fraud, sanctions evasion and obstruction of justice. Mr. Trump has suggested that the charges could be dropped as part of a trade deal with China. The president previously eased penalties on another Chinese telecom firm accused of violating American sanctions, ZTE, after a personal appeal by President Xi Jinping of China.
One senior European telecommunications executive said that no American officials had presented “actual facts” about China’s abuse of Huawei networks.
US Threats and Bullying
The American ambassador to Germany, Richard Grenell, wrote a letter a letter to Berlin, warning of repercussions should it use Huawei. Germany politely told the Trump administration to go to hell according to the Times.
German Chancellor Angela Merkel responded Germany was “defining our standards for ourselves.”
Cut Back Or Else
in its report Drop Huawei or See Intelligence Sharing Pared Back, U.S. Tells Germany.
In a letter to the country’s economics minister, U.S. Ambassador to Germany Richard A. Grenell wrote allowing the participation of Huawei or other Chinese equipment vendors in the 5G project would mean the U.S. won’t be able to maintain the same level of cooperation with German security agencies. The letter marks the first known time the U.S. has explicitly warned an ally that refusing to ostracize Huawei could lessen security cooperation with Washington. Among other things, European security agencies have relied heavily on U.S. intelligence in the fight against terrorism.
Mr. Grenell’s letter notes that secure communications systems are essential for defense and intelligence cooperation, including within the North Atlantic Treaty Organization, and that companies such as Huawei and state-controlled ZTE Corp. could compromise the confidentiality of these exchanges.
His letter noted that under Chinese legislation, Chinese companies could be compelled to assist their country’s vast security apparatus without any democratic checks and balances, and that it would be impossible to mitigate that risk. He also noted that the code running on 5G equipment would need frequent updates and was so complex that the potential for so-called backdoors and other system vulnerabilities couldn’t be ruled out even if Huawei were to let regulators regularly inspect its software.
Huawei, which is an employee-owned company, has strongly denied that it has ever spied for the Chinese government or would consider doing so.
Germany’s Concerns
There is no evidence. Germany’s concerns are understandable.
- Germany uses Huawei equipment for its 4G network. To be backward compatible, Germany needs to use Huawei for 5G.
- Other vendors would be far more expensive.
- Selecting another vendor might set Germany back two years.
- The number of Trump’s demands on the EU have escalated and the EU is sick of Trump’s sanctions, meddling, and overall pettiness that isn’t consistent or believable in many cases.
I side with Germany on all counts.
But it’s a Financial Times article that really explains what’s going on. “The proliferation of our technology hampers American efforts to spy on whomever it wants,” says Huawei executiuve Guo Ping in an Op-Ed article US Attacks on Huawei Betray its Fear of Being Left Behind.
Ping points out that the US’s NSA sought to “collect it all”, every phone call or communication in the world.
If the NSA wants to modify routers or switches in order to eavesdrop, a Chinese company will be unlikely to co-operate. This is one reason why the NSA hacked into Huawei’s servers. “Many of our targets communicate over Huawei-produced products,” a 2010 NSA document states. “We want to make sure that we know how to exploit these products.”
Unconstitutional Ban
On March 6, the Financial Times reported Huawei Lawsuit Accuses US of ‘Unconstitutional’ Equipment Ban.
US is Behind, Fears It Cannot Manipulate Huawei
It’s not fear of Chinese spying, but rather Huawei will make US spying more difficult.
The top secret documents leaked by whistle blower hero Edward Snowden prove the US spied on anything and everything including Chancellor Merkel.
Secondly, China invested far more in 5G technology than the US. Eliminating Huawei is one way to catch up.
Germany protested not only because Huawei would be backward compatible and cheaper, but also because there was no other competition that had Huawei’s features, at any price.
No Evidence
It is not surprising in the least that the US has conjured up fantasies that are roughly 180 degrees opposite of the view it presents in its bullying efforts.
Despite demands of evidence by China, Germany, the UK and other countries that China poses a risk, the US has not shared a shred of evidence with anyone.
The logical conclusion is the US has nothing but conjecture and a pack of lies.
Mike “Mish” Shedlock
World didn’t have evidence for Hitler’s intentions. If there is enough reasons to be suspicious, you fortify your defenses.
There is something rotten in your thinking when you would trust any source or institution in China as being independent of the Chinese Communist Party. Laughable in fact. Read Emperor Xi Jinping address to the last Communist Party, his words, “north, south, east, west, ” the Chinese Communist Clique rules all. Does that preclude Huawei, of course not, they are a servant of the Emperor or they will find themselves disappeared. There are no courts, merely punishment administrators for the state. Surely, the U.S. tries to uncover data and information from other countries, but we don’t do it for economic purposes or to destroy other peoples infrastructure. China is a serious threat to liberty and constitutional democracy. Additionally, Snowden is a traitor now presiding in Czar Putin Land.
“but we don’t do it for economic purposes or to destroy other peoples infrastructure” 1. When has China ever destroyed other people’s infrastructure? 2. What was that the US spying on European trade delegation and Angela Merkel? Karma is coming to you and Snowden is a hero.
One, you have no idea what Chinese military and intelligence cyber forces do. They have no check on them at all. You won’t find out in Wiki Leaks because any Chinese caught leaking will be executed. N. Korea is their go to confederate for cyber attack. Believe it, they are ready for cyber attacks if necessary. There are no rules when dealing with Putin or Xi KingPin. Both Germans and Europeans and Americans listen and read each others mail. That is an old game and completely legitimate in foreign relations. Snowden is a hideous little traitor to all liberal democracies. Not interested in Karma, only interested in right now and besting these two dictators and their oppressive regimes.
Most of the technologies in US (semiconductor, software, aerospace, you name it..) were developed from scratch. China hardly does that!. Lot of the Chinese tech were stolen from US starting from 90s!!. You may not believe me, but it is a fact. So yes please allow Huawei and you can see total Chinese espionage of west. And one more thing: aholes like this person who wrote this article can live in US and write this garbage. Imagine some body doing this in China. He will never be out of prison ever. US is not perfect and yes they spy!!. But US spying is not even comparable to what Chinese had been doing (downright theft of other peoples work). Google it and you can read about how Huawei destroyed Nortel a Canada communication company and if you still don’t believe google about how many Chinese scientists, professors are being arrested and indicted for stealing. So yeah like the author of this garbage article says, “we should all close our eyes and let Chinese destroy US”.
Americans need to spend some time in Asia and Europe. Much of the US looks like a 3rd world country in comparison. The USA might as well be Honduras telling Germany what to do. We can’t build 5G equipment in the US. We can’t even figure out how to deploy Chinese made 5G equipment. It’s best for the Asians and Europeans to just move on while we fight about abortion and guns and deny climate change.
The move towards the hard parts of what used to be a Silicon Valley hegemony; to Asia in particular but also to Germanic Europe; has been an accelerating trend sine at least the 90s. There are still the occasional exception, but they are rarer and rarer.
Instead Silicon Valley, to the extent they produce any net value at all anymore, is increasingly cultural exporters. Kind of a Hollywood for cute little things you can do on your cellphone. And just like was the case with England, and prior to that France, people often continue to look to a former hegemon for cultural cues, long past his due date in more fundamental areas, like technological leadership.
I’m worried. This whole Huawei flap looks like a Beltway lobbyist initiative to me. Lost in the screeching is the fact that we are slipping in technological competitiveness.
First, we moved manufacturing to Asia; It was cheaper. Then we moved Advanced Manufacturing Engineering to Asia; It was faster to market. Then we moved design teams to Asia to be closer to manufacturing; It was stupid.
The bean counters have finally triumphed utterly and left us pleading with daddy government to make those mean old competitors play fair. Any pretense will serve, national security is always good.
Anything, no exceptions, going over the web should be assumed to be in the public domain. If it isn’t now, it can be at any moment.
If we can’t field better products quicker and at lower total cost of ownership, we’re going to lose eventually. Daddy government can’t save us.
This is what inevitably has to happen, once all wealth, and hence all decision making power. is debased away from the productive people who created it; to be handed out to half literates whose sole and only qualification, is closeness to those who print money, “laws” and regulations..
How about an article exploring the potential threat of increased radiation when 5G is rolled out and what would be so great about 5G?
It seems logical that Huawei executiuve Guo Ping would give an unbiased view, and be the most credible source for information on this topic.
Funny.
Our government states what it wants to be true. Sometimes it actually is true, but it’s just a coincidence.
Great post, Mish
NO other Media presents both sides of a story, before concluding their truth.
Any communication will be spied on by whomever carries it. Why wouldn’t they?
It’s up to any two parties which want to avoid being spied on, to communicate over protocols that make spying as hard as possible. Only progressives are dumb enough to believe that the world sorts neatly into all the bad guys on other people’s teevee, versus all the good guys on their own.
Exactly as I posted on this blog 2 days ago:
There’s another good reason for Germany to go with Huawei. All the protests from the five eye countries claiming that China will be able to wire tap the traffic are a projection of the fact that Western-produced hardware does have government secretly mandated back doors. We know this from multiple reports, including boasts by the NSA that they can decrypt anything (but not b/c they have quantum computers). It’s the old splinter in the eye of another when there’s a beam in your own. Plus the fact that Huawei probably does not have back doors, making part of the communications traffic invisible to the prying eyes.
Reminds me of the Soviet Union’s “suitcase nukes” that we were all afraid of ‘lest they fall into the wrong hands. I remember wondering why we thought they had such a thing until I visited the National museum of nuclear science and saw a model of the “backpack nuke” in our arsenal.
How did we forget about this already? https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-china-used-a-tiny-chip-to-infiltrate-america-s-top-companies
https://www.lightbluetouchpaper.org/2018/10/05/making-sense-of-the-supermicro-motherboard-attack/
It’s a miracle that we in the public ever got to hear about this, but now even guys like Mish can’t remember stuff that happened a year ago and suddenly find the Chinese worthy of trust.
“Mish, as a fellow American, I want to thank you for this helpful and objective piece.”
Thanks
Very much appreciated/
I am not always right and I seldom push conspiracy theories quickly. That FT article came out a month ago and I sat on it. Further evidence from the NYT and further comments from Germany are very believable. That does not make them correct, but it is the best assessment I can come up with now.
I am not a China apologist by any means. It is poisoning its citizens with pollution to get growth at any cost, and that growth is vastly overstated.
Mish, as a fellow American, I want to thank you for this helpful and objective piece. I know, based on your past posts, that you are no sympathizer of the Beijing government. Therefore you deserve a lot of credit for insisting on a rational and objective analysis of a specific situation involving a Chinese company, prominent as it might be for China’s plans for technological advancement. In this day and age of knee-jerk, xenophobic reactions masquerading as patriotism crowding out rational discourse, your tenacious efforts to hold on to reason and objectivity in discussing topics of national interest – whether or not your conclusions are always right – should be valued by discerning readers for contributing to the long-term viability of our country.
Still can’t believe we had the chutzpah to have Huawei’s CFO arrested. Detaining executives from competitor companies is the slipperiest of slopes, could easily be a justification for war. If another country arrested a top American executive for nebulous reasons, the cry for retaliation would be deafening.
Reminds me of how the Saudis tortured some of their own billionaires to shake them down for money. When even the ultra-wealthy start getting treated like garbage, you can be sure life is cheap and things are about to get dicey for regular people.
It’s what progressives call “Rule of Law,” and worship at the altar of.