Geopolitics Versus Technology: the Case of Huawei

08.09.2020-13.09.2020 • No: 271

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GEOPOLITICS VERSUS TECHNOLOGY: THE CASE OF HUAWEI

During the traditional Munich Security Confer- technology in its executive order and banned smartphone vendor after Samsung, outper- ence in February 2020, the U.S. delegation any transactions with information or communi- forming Apple. widely publicized the security risk arising from cations technologies that possess a threat to na- Meantime, Huawei telecom systems are al- the Chinese telecommunications company tional security of the United States. The U.S. ready integrated to a significant extent into Eu- Huawei’s 5G technology. In addition, the en- government also filed a criminal case against rope’s 4G infrastructure. For instance, the during global campaign of the United States to Huawei for the theft of technology and blocked United Kingdom (UK) has been using Huawei boycott Huawei during the last three years has its products in the domestic U.S. market. As a equipment in its telecom since 2005. Although been widely discussed at almost every signifi- result, Huawei, along with its 70 affiliates, was Huawei systems are not the central network of cant meeting of U.S. President Trump. As a re- placed on the “entity list”, which requires a the UK, Vodafone representatives estimated sult, the year 2020 became challenging for the permission from the U.S. Department of Com- that it would take around five years to apply world’s top telecom supplier and the second merce to obtain a license before supplying. As U.S. and European restrictions on Huawei to phone manufacturer. a corollary, other U.S. companies began to cur- modify the existing 4G infrastructure. It appears that U.S. efforts in blaming security tail their business with Huawei. The global In terms of the 5G implementation, Huawei has vulnerabilities of Huawei have different reac- tech giants as Google, for instance, stopped over half of the 65 5G contracts in Europe. In tions in the world, and even Western countries services like Gmail in the Huawei devices, early 2020, the European Union warned to are not united in their positions. For the United whereas Intel, Qualcomm and other giants limit the access to the core network of Huawei, States, the security threat of Huawei systems halted supplying Huawei parts. Later, the U.S. yet allowed the company’s 5G. France plans to has implications, firstly, in the case of a further administration extended licenses of U.S. com- implement its 5G network with Huawei, the deterioration of Sino-American relations. It is panies to work with Huawei until May 15, UK also approved the construction of its non- grounded considering the ongoing trade fric- 2020. Prior to that, in 2018, Canadian authori- core 5G networks with some limitations, Nor- tions between the United States and China. Ac- ties arrested Meng Wanzhou, Huawei’s chief way’s Telenor reported that Huawei will still cordingly, if the claim that Huawei’s equip- financial officer and daughter of its founder, play a role in the country’s 5G rollout, Hungary ment could be used for spying based on Ren Zhengfei, at the request of the U.S. De- builds its 5G with Huawei, to name but a few. China’s 2017 National Intelligence Law is true, partment of Justice, charging her with violating Among the developing countries, Russia this poses a crucial threat for Washington and U.S. sanctions against Iran. agreed to develop its 5G with Huawei, Malay- its allies. Countries like Australia, New Zea- In its turn, the Huawei management does not sian authorities agreed on the Huawei 5G land, and Japan have banned Huawei products agree with accusations, claiming that it has po- rollout, the Indian government allowed due to trust issues and geopolitical tension in litical underpinnings to keep away the Chinese Huawei to participate in the 5G trial phase, and relations with China. Apart from that, an in- giant from the U.S. market. Ren Zhengfei Thailand already launched a 5G test with creasing dominance of Huawei on the global stated that Huawei had never engaged in espi- Huawei. In the Middle East, Huawei has 10 telecommunication market risks the U.S. lead- onage on behalf of Beijing, claiming that the ership in technologies such as 5G. Undoubt- Chinese Ministry of Foreign Affairs had offi- confirmed 5G contracts. edly, the competition for market share roots cially confirmed the absence of a law on in- On the opposite side of the barricade, there are this perspective. Thus, by acknowledging the stalling mandatory backdoors. Moreover, in countries such as the United States, Australia, existing security shortcomings of Huawei due June 2019, Huawei Chairman Liang Hua pro- New Zealand, Japan, Germany, and the Czech to its political background, the author argues posed to sign a “no-spy” deal with the U.S. Republic that limited the use and sales of that the political economy underpinnings of the government. Huawei products. At the same time, despite the United States impact to a greater extent its Taking into account the ongoing trade frictions arrest of Meng Wanzhou in 2018, Canadian strategy toward Huawei. between the United States and China, and Prime Minister Justin Trudeau assured that the Officially, the U.S. authorities explained their Trump’s protectionist policies, it appears that decision on the 5G with Huawei would not be distrust of Huawei by the following concerns: the concerns over Huawei have a political ba- political. Spain’s Telefonica decided to reduce 1) According to the above-mentioned National sis. Moreover, Washington is concerned that its supply of Huawei, while Estonia proposed a Intelligence Law, Chinese organizations must Huawei will flood the U.S. market with its ad- new security bill with Huawei to make its ac- “support, cooperate with and collaborate in na- vanced and low-price technologies. Yet, con- tivities more transparent. tional intelligence work”, hence Beijing could sidering Beijing’s control over Chinese compa- To sum up, given the overall quality and af- force Huawei to give the Chinese government nies, the confidence of Huawei in security of fordable prices of Huawei products, it seems intelligence data about its users. In addition, its customer data is somehow doubtful. Either that security concerns do not stand as a com- the Chinese government could push Huawei to way, the risk of dependence on the Huawei pelling reason to ban them for decision makers allow it the use and even control of its software equipment and potential control whether by the of most countries. Moreover, considering sev- during the periods of heightened tension; 2) In Chinese intelligence services or other entities eral U.S. Senate hearings of Facebook CEO February 2020, the U.S. authorities reported during the wartime make vulnerable products Mark Zuckerberg, whose company also ques- that Huawei could have backdoor access to its and services provided by Huawei. tions the security protection of both individuals network software globally; 3) The issue of At the same time, Huawei is the leading global and states, the very existence of security in cy- transparency cause doubts, because, unlike supplier of 5G technology that promises to pro- berspace seems uncertain. Therefore, countries other multinational corporations, Huawei’s re- vide high internet speed and realize full poten- like the United States that apply heavy-handed ports are available only to the top management tial of wireless systems. Huawei supplies the approaches towards Huawei are facing opposi- of the company. most advanced network equipment that makes tion from the countries that search for a bal- It is noteworthy that initial security claims phone masts work, the network switches that anced proportion of the quality and price in the from the United States date back to 2011-2012 connect phone networks, and the software to implementation of high tech. In addition, when the U.S. government requested an inves- control them. Since 2015, Huawei has been far Washington’s problem is that, at present, it tigation of Huawei security systems. As a re- ahead of its major rivals, Ericsson and Nokia, could not offer a reliable alternative to sult, the 2012 House Intelligence Committee and is much bigger if compared with ZTE, an- Huawei’s 5G technology, therefore it attempts report on Huawei and ZTE did not find any de- other Chinese telecom giant. Thus, Huawei to limit the Chinese company’s penetration by viations but complained that they “did not fully currently is the world’s largest telecommunica- urging about its security issues at the various cooperate with the investigation”. The latest tion equipment supplier and a major provider global platforms. It remains to be seen if the measures on Huawei were taken in May 2019, of the “fifth-generation” technology that aims U.S. security hype will prevent Huawei from when the Trump administration declared a na- to dominate the 5G market worldwide. In addi- continuing to lead in telecommunication tech- tional emergency over threats against U.S. tion, it has become the second-largest nologies.

Written by Albina Muratbekova, Eurasian Research Institute, Kazakhstan

Politics, Foreign Affairs, and Security Economy, Finance, and Energy Society and Culture  The Council of Foreign Ministers of the  Speaking at the government meeting, Ka-  The feature film “Tomyris”, shot jointly Shanghai Cooperation Organization zakhstan’s Minister of National Economy by the Kazakhfilm studio and the Satafilm (SCO) member states held its regular Ruslan Dalenov reported that the real sec- company, has been released worldwide. meeting in Moscow. The ministers re- tor of economy had demonstrated solid The movie directed by Akan Satayev is viewed ongoing and future activities of the performance in January-July 2020. In par- dedicated to the events that took place in SCO in the context of the COVID-19 pan- ticular, car manufacturing grew by 51.8%, the Massagetae kingdom in the sixth cen- demic. The ministers also reviewed the pharmaceuticals – by 34.1%, paper pro- tury BC. “Tomyris”, full of battle scenes, agenda and draft documents of the forth- duction – by 15.3%, and housing construc- horse races, and sword fights, is one of the coming SCO summit, paying particular at- tion – by 6.4%, while car exports increased largest historical projects in the history of seven fold. According to Dalenov, one of tention to the political declaration and the Kazakh cinema (Trend, 07.09.2020). 2021-2025 action plan to implement the the critical measures to help revive Ka- SCO Development Strategy (SCO, zakhstan’s economy in the post-quarantine  The Embassy of Kazakhstan in Romania 10.09.20). period will be all-round support of busi- held an opening ceremony of the bust of ness (Kazinform, 09.09.2020). Abai in downtown Bucharest. The event  During their talks in Moscow, foreign was attended by Romanian politicians and ministers of the Russia-India-China (RIC)  In November 2020, a new car factory in the Uzbek city of Jizzakh will start the pro- officials, foreign diplomats, and represent- grouping Sergey Lavrov, Subrahmanyam atives of academia, civil society and me- Jaishankar and Wang Yi exchanged views duction of the latest KIA K5 and Seltos models. The annual production capacity of dia. Ambassador of Kazakhstan Nurbakh on further strengthening of trilateral coop- Rustemov emphasized that the familiari- eration as well as topical issues of interna- the ADM-Jizzakh plant will be 25,000 ve- tional and regional importance. The minis- hicles at the first stage and will be in- zation with European culture was one of creased to 100,000 vehicles by the end of Abai’s aspirations. The bust was erected as ters agreed that the three countries, with th strong scientific and industrial capacities, 2022. The plant, located in the Jizzakh free part of celebrations of the poet’s 175 an- could make a significant contribution to- economic zone, is positioned as a multi- niversary (Embassy of Kazakhstan in Ro- wards mitigating the impact of the corona- brand enterprise that will produce cars of mania, 10.09.2020). other well-known world brands in the fu-  UNESCO and the Turkish National Com- virus pandemic (MFA of Russia, ture (UzDaily, 10.09.2020). 10.09.20). mission for UNESCO organized an online  According to Kyrgyzstan’s Ministry of  During his visit to Kazakhstan, Chinese consultative meeting on the Bilge To- Agriculture, 40 new enterprises for pro- nyukuk monument dedicated to its 1,300th Foreign Minister Wang Yi held talks with cessing agricultural products that employ President Kassym-Jomart Tokayev and anniversary. The event was supported by 1,208 people were commissioned in the the International Turkic Academy, First President Nursultan Nazarbayev. The country in January-August 2020. The min- parties discussed issues of bilateral rela- TURKPA, the Turkic Culture and Herit- istry notes that the creation of new and the age Foundation, and TURKSOY. Partici- tions, interaction within international or- development of existing enterprises in this ganizations, and joint actions to prevent sector will be carried out taking into ac- pants assessed the current state of the To- the spread of COVID-19. Wang Yi also count their regional specialization. The fo- nyukuk memorial complex and discussed met with Foreign Minister Mukhtar Tleu- cus will be on the introduction of new issues related to its protection and inclu- berdi to address the strengthening of coop- technologies that provide deep integrated sion in the UNESCO World Heritage List, eration as part of coordination of Kazakh- energy and resource-saving processing of given its invaluable cultural value stan’s Nurly Zhol state program and agricultural raw materials (Kabar, (TWESCO, 10.09.2020). China’s Belt and Road Initiative (Akorda; 08.09.2020).  The Cooperation Council of Turkic Speak- MFA of Kazakhstan, 12.09.2020).  Tajikistan resumed the export of electric- ing States and the World Health Organiza-  Chairman of the State Committee for Na- ity to Afghanistan, interrupted due to a de- tion signed a memorandum of understand- tional Security of Tajikistan Saimumin crease in the water level in reservoirs of ing on bilateral cooperation. The memo- Yatimov visited Kabul to hold talks with the country’s hydropower plants (HPP). randum is aimed at enhancing the existing high-ranking officials of Afghanistan. The After the water level in the Nurek HPP’s collaboration between the two organiza- parties discussed issues related to the se- reservoir reached its maximum, the Tajik tions. In particular, the parties plan to hold curity situation in their countries and the government decided to resume electricity consultations at the leadership and expert region as a whole, border protection, the supply to the neighboring country. Cur- levels, exchange information and docu- fight against terrorism and extremism, and rently, the daily volume of exported elec- ments on public health and sanitary and smuggling of drugs and weapons. They tricity is about 1.3 million kW/h, while epidemiological well-being, as well as also paid special attention to ensuring se- previously it reached up to 8 million kW/h hold joint events and implement coopera- curity of communications and energy pro- (Avesta, 07.09.2020). tive programs and projects (Turkic Coun- jects (Avesta, 12.09.2020).  Transport officials of Afghanistan, Azer- cil, 11.09.2020).  Georgia’s United National Movement and baijan and Turkmenistan held a videocon-  The UNICEF Executive Board endorsed nine opposition parties that are members ference meeting to discuss the issues of the sixth country program for Turkmeni- of the Strength is in Unity political move- implementation of the international transit and transport corridor Afghanistan-Turk- stan for 2021-2025. The document is ment unanimously decided to nominate aimed at supporting the Turkmen govern- the country’s former president Mikheil menistan-Azerbaijan-Georgia-Turkey (Lapis Lazuli). The agenda of the meeting ment in meeting its commitments to re- Saakashvili as their candidate for the spect, protect and fulfil the rights of chil- prime minister’s post. According to Chair- included the optimization of the transport and logistic process, the creation of equal dren. The program with an indicative five- man of the United National Movement year budget of about $7.5 million covers Grigol Vashadze, everything that has al- economic and financial terms for all par- lowed Georgia to cope with the present- ticipants, the development of a single pric- four areas, namely governance for chil- day challenges was created during the rule ing policy for cargo traffic, and the ap- dren; child health, nutrition and early de- of Saakashvili (Agenda.ge, 07.09.20). pointment of a single operator from each velopment; social protection; and quality side (Turkmenistan Golden Age, inclusive education (UNICEF,  According to Turkish ambassador to Mol- 07.09.2020). 11.09.2020). dova Gurol Sokmensuer, Turkey will con-  Russian Energy Minister Alexander No-  The Azerbaijan Tourism Association, sup- tinue to help Moldova and its autonomous vak forecasts that Russia can increase its region of Gagauzia. In particular, as part ported by Turkey’s leading tourism organ- share in the global oil market after a recov- izations, launched an initiative to establish of its support to Moldova in the fight ery in demand. This may happen due to re- against COVID-19, Turkey will continue the Tourism Organization of Turkic duced competition between producers as a Speaking States. Currently, top-level ne- to deliver medical aid and assistance, such result of a decline in investments in the in- as X-ray equipment. To further strengthen dustry. Investments in oil and gas produc- gotiations are underway with the relevant bilateral relations, Turkish Foreign Minis- tion in 2020 will be $170 billion less than structures of Turkic speaking countries on ter Mevlut Cavusoglu opened a consulate last year and continue to be low in 2021, the organization’s establishment. The general in Gagauzia’s capital Comrat dur- which could lead to a loss of 5 million bar- main goal of the new entity will be to ing his recent visit to Moldova (Anadolu rels per day of world production (TASS, jointly promote the tourism potential of Agency, 07.09.2020). 08.09.2020). the Turkic world (Trend, 11.09.2020).

Prepared by Dauren Aben and Kanat Makhanov