Huawei’s Unprecedented Offer To End US Ban

Maverick technology mastermind, or serpentine subordinate of the Chinese state? Ren Zhengfei, founder of Huawei, splits opinion. He’s grown the telecom firm to a $100bn behemoth, but his ties to the Communist Party are clear, and he – like any Chinese citizen, rich or poor – is obligated to do its bidding. Convinced of his skulduggery, Trump’s America has blacklisted Huawei; but now, unexpectedly, a peace offering of sorts from Ren. Huawei is willing to sell its network technology to US firms, he announced last week, a move that could – in principle – allay deep-set surveillance fears.

Adjacent to the spiralling trade war with China, Washington’s feud with Huawei has become a totem of worsening East-West relations. As he’s piled on the commercial tariffs, so too has Mr Trump restricted American involvement with the technology giant. Security fears drive the action, the White House says, arguing that Huawei’s equipment may contain ‘back doors’ for Beijing snoopers. Alongside government agencies, US businesses have been ordered not to deal with the Chinese company.

The impasse is not insurmountable, though, says Ren, who has forwarded a novel solution – licensing Huawei’s 5G technology to American firms for a one-time fee. He envisages a win-win scenario – the US being able to “build up their own 5G [network]”, while Huawei benefits from the growth in sales and competition. On the surface, it’s a promising offer. America has no indigenous 5G network manufacturer, and the only alternatives to Huawei – Nokia and Ericsson – are far less affordable.   

More importantly, his proposal would also pacify worries around security, Ren argues. American clients would be able to review and modify their ‘source code’, meaning neither Huawei nor the Chinese government could, hypothetically, gain access to the network. It is, in effect, an offer of transparency – every nook and cranny where a back door may be hidden would be open for inspection.

It’s an unprecedented move, and one that reflects Huawei’s hastening efforts to break the deadlock. The usually camera-shy Mr Ren has been wheeled out time and again this year, part of the company’s concerted charm offensive. A glance at their books explains why. Huawei made a barnstorming $105bn in sales last year, roughly half of which were from its smartphone range. Like most non-Apple devices, their handsets run Android software. Google, the platform’s maker, is California-based, and so is subject to Washington’s Huawei embargo. The firm is working on a proprietary replacement, HarmonyOS, but a mighty hit to the bottom line is anticipated.

That, of course, is of no concern to those with security fears. Critics say that, while open to scrutiny, Huawei’s code would have to be combed through again and again after every (frequent) update. And even if the technology was declared clear, Western firms would be adopting a platform intimately familiar to Chinese hackers. A worrying ‘dependency’ on Huawei to maintain the network could also emerge, experts warn.    

“An American company that installed such equipment would be highly dependent on Huawei engineers and software experts to keep the system running,” said Claude Barfield of the American Enterprise Institute, a think-tank. “Moreover, 5G technology will present enormous, even intractable, cybersecurity issues – with multiple entry points into the system and almost continuous software upgrades”.

Regardless, US companies who stand to lose millions from the ban have been voicing their dissent. Microsoft, one of America’s biggest businesses and supplier of Huawei’s computer software, has been pressing regulators to explain the embargo – but to no avail. “Oftentimes, what we get in response is, ‘Well, if you knew what we knew, you would agree with us,’” said Microsoft President Brad Smith recently. “And our answer is, ‘Great, show us what you know, so we can decide for ourselves. That’s the way this country works’”. 

In truth, even if Ren’s offer was to mollify White House rancour, the proposition is plagued with uncertainty. Embroiled in a bitter dispute with the Americans, would Beijing – whose influence over Huawei is critical – allow core parts of the company to be peddled in the West? And who would even want to buy into the 5G market, dominated as it is by low-cost Huawei? (On that, Ren admits he was “no idea”.)

But there is nonetheless merit to the proposal. With many in Europe willing to do business with Huawei in spite of US obstinacy, the world risks being riven by a new ‘Berlin cyber-Wall’. Fears of a technological cold war shouldn’t spurn an appropriate wariness of Huawei, but its offer deserves a fair hearing.