The race for 5G has introduced new plays for the ongoing geopolitical competition between the United States and China. The urge to rise to the top is causing both countries to cut corners and undermine intelligence alliances across the world. When a “Brief History of the Internet” was published in 1997, it described the Internet as having “worldwide broadcasting capability, a mechanism for information dissemination, and a medium for collaboration and interaction between individuals and their computers without regard for geographic location”. Fast forward to nearly twenty-five years later, and this definition could not be further away from the truth. Consider political titans, such as China and Russia, who have successfully implemented firewalls to disconnect their nation from the Internet via RuNet. 5G network rollout, the much anticipated next-gen technology, is predicted to bifurcate even further our inter-connected world.
Huawei is the Chinese maker of telecommunications equipment and one of the largest smartphone manufacturers in the world. While the company is seen as the face of 5G for news releases, Huawei is commonly known as the proxy for China. The Chinese company was founded and is currently run by a former engineer in the PLA and a member of China’s Communist Party. Huawei is viewed skeptically across the globe by its competitors as being the arm of China’s police state. We have previously written about China’s mandated reporting requirements for its businesses in our post about TikTok and ByteDance. Article 7 of the 2017 National Intelligence Law of China states, “any organization or citizen shall support, assist and cooperate with the state intelligence work in accordance with the law”. This article also includes that “the state protects any individual and organization that aids it.” This means that any Chinese-owned companies are bound by law to cooperate and provide the state with any consumer data when requested.
Huawei’s networking equipment and market shares in the United States started being scrutinized as early as 2012, following U.S. Congressional conclusion that the company was a security threat. Several recent events have also hinted to the U.S and China’s technological warfare for control of the latest global networking technology: the arrest of Huawei’s CFO in Canada for violating U.S. trade sanctions against Iran, the U.S.-imposed ban to restrict government agencies from doing business with Huawei, and the aggressive lobbying to restrict Huawei networking equipment in global telecom networks. The difficulty for the United States and Europe is that despite their effort, Huawei has managed to skyrocket its growth. Huawei has migrated into more than 170 countries and claims 45 of the top 50 wireless carriers.
China had a headstart as its Communist Party made 5G a priority several years ago. China has already vastly outspent the U.S. on 5G infrastructure and it would take several years or budget prioritization in R&D to catch up. Deloitte issued a report in 2018 revealing that China has invested $28 billion more in wireless infrastructure over a 3 year period than the United States. In the past, the United States was the first to launch LTE. This led to significant macroeconomic benefits, as the U.S. became an incubator for cutting-edge mobile, social, and streaming applications. It is now known that the first to successfully implement 5G networks would gain similar victories for the decade to come.
The sophistication of 5G is based on network densification using small cells that are less obtrusive. It provides signals that are 100 times more powerful than the current technology. It also allows carriers to easily place 5G signal towers all over cities and even inside buildings. With the speed and connection strength provided by these infrastructures, the number of devices that are able to connect is practically limitless. The value in a 5G network will not only be limited to the density of connections, but also the reach of data consumption.
Huawei’s growth as the leader of 5G networking equipment is placing an enormous strain on intelligence alliances around the world. Recently, the UK rebuffed attempts from the United States to exclude all Huawei equipment for Britain’s 5G mobile network. Prime Minister Boris Johnson ruled in favor of China but capped Huawei’s involvement at 35% and excluded “sensitive core” areas. Essentially, the Prime Minister acknowledges that Huawei’s business can be problematic, but believes the risks can be managed with the right boundaries. The UK and the U.S. share intelligence in what is known as the “Five Eyes” Alliance (also includes Australia, New Zealand, and Canada). The “Five Eyes” was created immediately following WWII, and its members are parties to a multilateral UK-USA Agreement for joint collaboration. The worry is that Huawei’s partnership with the UK and Europe’s 5G network will undoubtedly impact this alliance.
In contrast to the UK, France has chosen Ericsson and Nokia as the suppliers for its 5G network. These Scandinavian telecommunication equipment providers are the only real alternatives to Huawei. There is also Samsung, but they only stand a chance if Huawei equipment is scaled back. How is China reacting to European countries that are excluding Huawei? The Chinese ambassador in Germany threatened the country, stating, “If Germany were to make a decision that leads to Huawei’s exclusion from the German market, there will be consequences”. China also happened to threaten trade sanctions against Denmark if Huawei is not the vendor of choice for its’ Danish archipelago (Faroe Islands).
There is already mounting evidence of a blurred line between the company and the country when it comes to Huawei and China. Huawei has steadfastly denied that it is not at the behest of the Chinese Communist Party, even though it has allegedly received $75 billion in state support. Huawei has been defending itself against remarks made by the United States and EU Members on Twitter. Ironically, Twitter is a platform that is not even allowed in China.
Compounding the severity of China winning the race to 5G is Huawei’s and China’s strengthening relationship with Russia. The Nikkei Asian Review recently reported that the Russo-Chinese partnership could be a key role that over-turns the technological dominance of the United States. Under normal circumstances, the EU Member States and the UK would not be purchasing networking equipment from a Russian telecommunications provider with KGB influence. Yet, this appears to be the case in Western Europe. Huawei is hiring more than 1,500 employees for Russian development centers.
China is running a dystopian digital credit system that is being enforced by the latest in high-tech surveillance systems. The system was created to coerce and control more than a billion people. If successful, “it will be the world’s first digital dictatorship”. Chinese citizens that show loyalty and exhibit state-approved behaviors will receive higher social credit scores. The scores can be influenced by the individual’s comments made towards the government, what they choose to purchase at the grocery store, and even the conversations tracked with their entourage. These activities are currently being monitored by more than 200 million CCTV cameras that are equipped with facial recognition, body scanning, and more. China is an Orwellian police state that should not be allowed access to any data outside its own border.
What’s at stake in the race for 5G is not limited to state secrets and spy games. The outcome would signify the ultimate control over essential infrastructures (electrical and industrial). EU Member States would be wise to view Huawei as a long-term security risk and should exclude its components from 5G networks across the continent.
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