Published by The Lawfare Institute
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For the past several months, American policymakers have sought to convince allies, partners and potential partners to ban Chinese telecommunications company Huawei from supplying the entirety of, or components for, 5G communications networks around the world. This messaging campaign has centered primarily around concerns that Huawei could assist the Chinese government in spying on other countries or even shutting down or manipulating their 5G networks in a warlike scenario.
Many of the nations at which this U.S. diplomatic messaging is aimed, however, remain unconvinced. The current conversation over how to manage the risks from Huawei’s supplying of 5G systems depends much on one’s perspective, as many countries with relatively similar data have come to notably different conclusions about the policies needed to mitigate those risks. Yet the United States’s international messaging on this issue—to allies, partners and potential partners alike—blurs the line between economic and national security risks, and it threatens to undermine U.S. efforts to message these risks in the process.
The Five Main Risks in Play
Risk mitigation depends not just on one’s capacity to respond to and prepare for risk in a certain way but also on one’s assessment of risk in the first place—mainly, how one assesses its likelihood and severity. In this case, there are five main categories of risk with respect to Huawei and 5G. How a party views these risks depends on how it views its own relationship with China.
First, there is the well-publicized risk that Huawei equipment could provide an espionage platform for Chinese government actors. To some, the fact that Huawei exists within a system in which the Chinese Communist Party (CCP) has broad discretionary tools that may be used to compel assistance with national security matters is cause to avoid the company altogether—along with other Chinese companies. The concern is underpinned by the possibility that the Chinese government has compelled or might compel Huawei to deliberately place security backdoors or “bugdoors” (where a vulnerability is found, but intelligence services tell the company to leave it unpatched) in 5G systems. It also rests on the fact that the Chinese government could pressure Huawei to comply with a short-term national interest despite broader long-term interests that might be at play, such as Huawei’s marketability in other countries.
Second, and relatedly, is the war risk. Alternatively thought of as the crisis risk, this acknowledges the possibility that Huawei, in a period of high tension or a warlike scenario, could be compelled by the Chinese government to intercept 5G communications, tamper with them or turn off the underlying systems altogether. Under such a hypothetical crisis scenario, Huawei could enhance China’s military and intelligence posture.
Third, there is the generic cybersecurity risk. All complex, code-based systems today have vulnerabilities. This opens the door for exploitation by cyber deviants. The March 2019 report from the U.K.’s Huawei Cyber Security Evaluation Centre (HCSEC) to the U.K. national security adviser underscores that Huawei system code, along with the company’s system development and maintenance processes, results in a high number of vulnerabilities that go unpatched for prolonged periods of time. According to the report, if attackers had “knowledge of these vulnerabilities and sufficient access to exploit them,” they could cause the network to “cease operating correctly,” “access user traffic” or reconfigure network elements. Contrary to the espionage risk, the attackers in this scenario do not need to be enabled by Huawei, and the risk is largely agnostic to the geopolitical or political threat from China.
Each of these first three risks is a national security risk worth considering and managing. However, Huawei also poses a risk to U.S. economic interests in two additional ways.
First, Huawei’s only true competitors in the 5G radio equipment market—Nokia and Ericsson—have struggled financially. Unlike Huawei, those companies are also not capable of offering the entire package of products and services across the 5G technology stack. Combined, Huawei and ZTE (another Chinese infrastructure provider) hold approximately a 55 percent market share for existing telecommunications infrastructure—and given the perception that Huawei is 12-18 months ahead of competitors on developing 5G infrastructure, there are reasons to forecast that this market share could increase in the future. Market dominance by Huawei not only could drive up costs for customers, as monopolies or near monopolies are less receptive to market pricing pressures, but also could remove disincentives for malfeasance due to a lack of viable substitutes.
Second, Huawei possesses a unique capacity to manufacture and sell many of the components of the 5G “tech stack”: everything from the smartphones that would run on 5G cellular networks to the radio tower receivers that would carry the traffic between many different types of devices. It even designs computer chips. This broad offering of products potentially poses a risk to American companies that may not supply the finished 5G “product” writ large but that do contribute via the design and manufacture of components—meaning they can’t compete across the board with Huawei. In addition, there are concerns that Chinese trade representatives use deployments of Huawei telecommunications infrastructure as a platform to offer other Chinese technology preferentially as part of the Belt and Road Initiative. Some commentators also suggested that Chinese digital technology is more conducive to authoritarian applications. If this is the case, applications designed in and for use in autocratic environments may have a leg up, and Huawei deployments may stand to further shut out U.S. competitors from markets in Europe, South Asia, Africa and elsewhere.
U.S. Messaging on Huawei
Following bilateral meetings with Trump administration officials, European policymakers expressed concern that an “America First” policy is resulting in the conflation of security threats with trade threats. And this is not an issue unique to the United States’s diplomatic messaging on risks posed by Huawei—it’s a challenge more broadly with the current administration.
In November 2017, President Trump tweeted:
The United States has been reminded time and again in recent years that economic security is not merely RELATED to national security - economic security IS national security. It is vital to our national strength. #APEC2017 pic.twitter.com/8gKQUhit2X— Donald J. Trump (@realDonaldTrump) November 10, 2017