When a party state has inimical values to our own, tread with a great deal of cautionby George Magnus / May 1, 2019 / Leave a comment
The damaging leak of classified information from a National Security Council meeting is a matter of great significance. The UK’s telecommunications strategy and the involvement of Huawei is no longer private. There are important implications, not least those Peter Ricketts points out here. One danger is that in a weakened Brexit Britain, political infighting becomes embroiled in the proper conduct of national security matters. We should be careful not to lose our focus, though, on the substance underlying this controversy.
While it is still a matter of opinion as to whether Huawei’s hardware has technical weaknesses or is a Trojan horse for China’s security purposes, the essential issue is basically about the terms under which we engage with Chinese companies. With particular regard to Huawei, which sits at the heart of telecoms thinking around the world, the issue of engagement is as important as it would be if we were talking about military and energy security.
Rising concern about the role and activities of several Chinese firms has become widespread because China is not only a major customer and feisty competitor and partner, but also now a powerful global adversary. While the political status of state enterprises has never been in doubt, the assumption that private companies in China are private in the way that we understand the term is often mistaken.
Holding company structures and investments often mask state ownership, and about three-quarters of private firms, including the largest and also foreign joint ventures, have Party representatives in their operational management. Conflicts of interest can be assumed to go mostly the Party’s way. In the telecommunications and other sensitive sectors, these features carry an additional frisson.
Huawei has a complex ownership structure, in which the Party’s presence is conspicuous. It is also a very successful firm that aspires to monopolistic control of markets at home, where local telecommunications companies resist it for fear of being exploited, and abroad, where the issue is more about the development of an information and intelligence network leading back to Beijing.
The British government, and its peers, have to decide how and where to draw lines between the benefits of commerce and the implications for national security. The reported decision to allocate only non-core parts of the UK’s 5G network to Huawei, for example antennae, aerials and other conventional infrastructure, looks at first glance like a classic British compromise,…