How Huawei's leaked involvement in 5G network shows UK out of step with allies on dangers of China

Leak has brought into focus why the issue of Huawei is not just a matter of protecting intelligence, but part of the geopolitics of dealing with China

It is apposite that the latest publicity surrounding Huawei is about a leak; the revealing of sensitive information from a National Security Council meeting about the Chinese telecommunications giant being allowed into the UK’s 5G network.

It is deep concern about national security which has led to the activities of Huawei, with its connections to the Beijing government, being severely restricted by a number of countries and some of its employees ending up in foreign prisons.

But the leak of from the National Security Council (NSC), and the subsequent launch of an investigation by cabinet secretary Sir Mark Sedwill into it, has brought into focus why the issue of Huawei is not just a matter of protecting intelligence but part of the geopolitics of dealing with China.

This is particularly relevant for Britain with its pressing need for post-Brexit trade. The decision on Huawei and this country’s telecommunications network in which, it is claimed, Theresa May was a driving force, is in contrast to the position of many western allies and the “Five Eyes Network” of English speaking states which share intelligence.

Three of the members of this group – the US, Australia and New Zealand – have taken a tougher stance in the involvement of Huawei, effectively prohibiting the installation of the company’s equipment in the next generation of their telecommunications apparatus. Canada is due to announce its position on the issue in the coming months amid strained relations with Beijing. The Canadian authorities arrested a senior Huawei executive at American request four months ago; the Chinese detained a number of Canadian citizens in retaliation.

Elsewhere the Netherlands announced on Friday that it will switch from Huawei to a western company for its 5G network after the US criticised the proposed involvement of the Chinese company. Other countries like Germany and India have expressed concern about using Huawei equipment as they upgrade for 5G .Two of the Chinese nationals detained overseas were working in telecommunications in Poland, one of them a Huawei employee.

US intelligence has charged that Huawei is directly funded by Chinese state security. The UK’s National Cyber Security Centre warns that the company posed a threat to national security. However, the organisation’s chief has also stated that this country has established the “toughest and most rigorous oversight regime in the world for Huawei”.

Telecommunications is not the only field where Britain is, at times, out of step with allies when it comes to China. Beijing’s “Belt and Road” programme is hugely contentious with accusations that it promotes “debt-trap diplomacy” – providing cheap finance and then extracting advantage when debtor countries have difficulties paying back. The most notorious example of this is Sri Lanka ceding a port, Hambantota, in return for the waiver of $1bn in loans. A number of states, including Malaysia, Nepal and Myanmar have recently pulled out of Chinese-financed programmes because of apprehension of being similarly sucked in.

Last year, 27 out of 28 European Union ambassadors in Beijing (Hungary the exception) signed off a report saying the project “runs counter to the European Union’s agenda for liberalising trade and pushes the balance of power in favour of subsidised Chinese companies”.

The British ambassador was one of the signatories. But in December 2016 Philip Hammond, on a visit to Beijing, spoke of how “privileged” the UK was to take part in the programme. The chancellor subsequently announced the launch of a £750m private fund, supported by the British government, and led by David Cameron, which will work with the Belt and Road initiative.

The only other western European government which has talked of working with China on the scheme is Italy’s hard-right populist government, some of whose leaders are also keen admirers of Vladimir Putin.

Conduct towards China is also now an internal matter in the febrile and fractured political landscape of the UK.

Gavin Williamson, the defence secretary, Sajid Javid, the home secretary, Jeremy Hunt, the foreign secretary, Liam Fox, the international trade secretary and Penny Mordaunt, the international development Secretary, are all said to have objected strongly to the participation of Huawei in such a key sector of the UK’s communications network.

All of them, it is claimed, view themselves as potential successors to Theresa May and it has been suggested, appearing tough on China, they feel, will augment their leadership credentials.

Suspicions about the leak have focused on the Huawei objectors. All have denied they are responsible.

The China factor has already played a part in the internecine struggle of the Conservative government. Williamson announced in February that he is going to send the aircraft carrier, Queen Elizabeth, into disputed waters of the China Seas in a display of “hard power”.

The language he used resonated with echoes of “Pax Britannica” and “East of Suez”. But there was nothing intrinsically wrong with the proposal itself which reiterates the right of navigation in international waters. The growth of Chinese military power has led to alarm among neighbours in the region and beyond. Japan, India, the US and Australia have formed the Quadrilateral Security group which has held large-scale naval exercises in these areas.

But within hours of the defence secretary’s speech at the Royal United Services Institute, Treasury officials were briefing that it will scupper a trade visit to Beijing by Hammond.

China has continued to trade with other countries which had sent warships into the disputed seas as it has done with those who have placed restrictions on Huawei, albeit while making complaints to world trade bodies. Hammond is in Beijing taking part in an investment forum and has met Vice Premier Hu Chunhua who did not, according to diplomatic sources, mention Huawei.

Beyond the accusations and recriminations lie fundamental questions about just how dangerous Huawei is to the national security of the country where it operates.

The company was founded in 1987 by Ren Zhengfei, who had formerly served in the technical engineering sector of the People’s Liberation Army. He and senior Huawei executives have connections with the Chinese military and the Communist Party.

Although the company sells items like telephones and laptops, its main business is supplying core infrastructure devices which touch almost every aspect of the internet and thus could facilitate espionage.

Defenders of Huawei want to stress that there is no compelling evidence that the company is engaged in spying. Professor Qing Wang of Warwick University, who specialises in marketing and innovation holds: “Some of the reasons put forward for this notion are weak, for example, the background of the founder of Huawei. Mr Ren Zhengfei once served in the People’s Liberation Army. As we know, serving in the army was one way of getting out of poverty for people in the countryside ... Huawei is the textbook case of a great company in the making; unfortunately, it has fallen victim to the anti-globalisation policy and sentiment of the US and the ongoing trade war with China.”

The US, however, has become increasingly bullish in confronting Huawei and the threat it is supposed to represent.

At the recent meeting of the annual Munich security conference Vice President Mike Pence pointed to Huawei as an example of how “Beijing’s vast security apparatus” can have “access to any data that touches their networks or equipment.”

Marco Rubio, the senior Republican senator, maintains: “Huawei is a Chinese state-directed telecom company with a singular goal: undermine foreign competition by stealing trade secrets and intellectual property, and through artificially low prices backed by the Chinese government. The communist Chinese government poses the greatest, long-term threat to America’s national and economic security and the US must be vigilant in preventing Chinese state-directed telecoms companies like Huawei from undermining and endangering America’s 5G networks.”

What was agreed at the NSC in London was to allow Huawei involvement at the edges of the UK’s 5G network, in non-core parts such as building antennas. But the Americans are wary that this would act as a Trojan horse and is strongly pressuring its allies to keep the Chinese company at arm’s length.

Therein lies a conundrum for this government – keeping on good terms with both Washington and Beijing in the uncertain post-Brexit landscape.