If you haven't seen the most recent 60 Minutes piece on the potential threat to U.S. telecommunications infrastructure posed by Plano-based Chinese telecom titan Huawei, watch it. If you have, the U.S. House Permanent Select Committee on Intelligence released the results of its investigation Monday, and they are deeply troubling.
Huawei, the biggest global supplier of telecom equipment, is poised to make serious inroads into U.S. telecommunications. It's already the main service provider in Kansas. Not Siemens, not Cisco, not Ericsson can provide the kind of vertically integrated services that Huawei can. The problem: They're Chinese, and the amount of daylight between Huawei and the Chinese government is difficult to discern.
Two distinct possibilities are raised. On the one hand, Huawei is a multinational corporation and, like, say, an ExxonMobil, multinationals almost become their own sovereignties. Their fortunes are not necessarily inextricably intertwined with those of their home countries. They are citizens of the world, and citizens of nowhere, answering only to their shareholders. So why, then, would they risk pissing off their biggest customer to assist the Chinese government?
OR, those notorious snoops in Chinese intelligence will use Huawei as a trojan horse, infiltrating every level our system of communication. Will Chinese intelligence use the company to bring our telecom infrastructure crashing down with malicious software? Will they use it to steal sensitive national and economic data? And are we OK with the fact that Huawei gained much of its advantage here and abroad by stealing patented applications from Cisco, a homegrown telecom company? Huawei is clearly cognizant of these looming questions, so it requested a full committee investigation to allay nagging doubts. Apparently, the opposite happened.
Here are a few disturbing highlights from the report:
Throughout the investigation, Huawei officials were maddeningly unresponsive to the inquiry they requested. For example, they invoked Chinese state secrets when refusing to provide certain documentation. They wouldn't say much about the corporations founder and president, who is a former People's Liberation Army official. They refused to elaborate on Huawei's connection to the Chinese government, as well as detailed histories of its board members, who apparently wield control uncommon in the corporate world.
Huawei, like all large Chinese businesses, has a Communist Party committee in-house. That, too, Huawei declined to elaborate on.
It also declined to discuss whether financial assistance from the Chinese government was enabling it to provide services and equipment in the United States at below-market prices. Huawei declined to specify which of the banks it does business with are state-owned.
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Huawei did not satisfactorily answer allegations that it provides network service to the People's Liberation Army cyber-warfare unit.
Oh, and last but not least, despite the fact that Huawei has a U.S, base of operations in Plano, you and I would have to receive a special waiver from the Chinese government before we can own stock in the company.
In sum: "The investigation concludes that the risks associated with Huawei's and ZTE's provision of equipment to U.S. critical infrastructure could undermine core U.S. national-security interests."
Read the report in its entirety here.