ISSN 2330-717X

Huawei Redoubles Efforts To Rebuild Trust As It Enters Critical Period

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By Jorge Valero

(EurActiv) — Chinese telecom giant Huawei praised Europe’s handling of data and cybersecurity as it seeks to partner with the EU to set global standards to dispel concerns about espionage.

The company, a leading player in the development of the next generation of telecom networks (5G), faces crucial months ahead. 

As carriers are signing up to roll out 5G networks across the globe, Huawei will be assessed by the EU over the next six months to see whether it represents a security risks.

The outcome of US-China talks in the next few weeks could also ease some of the pressure on the company, banned by Washington, or become a collateral victim if the negotiations fail.

This pressing context is nowhere present in Dongguan, an hour-and-a-half drive from Shenzhen, the Chinese Silicon Valley.

In Huawei’s new R+D campus, reality and appearances seem unbounded. In an area bigger than 365 football fields, the visitor walks along the streets of Heidelberg university; wanders through marble corridors and stairways seen in Paris’s glamorous buildings; and enjoys splendid views like those found in Granada.

Immersed in the peaceful silence of this replica of Europe on steroids, where even the plants seem more voluminous, it is hard to imagine that Huawei is almost at the heart of the “systemic rivalry” between the EU and China, as Brussels described.

Or that the company represents an “unacceptable” security threat to the rest of the world, as investor and philanthropist George Soros warned last January.

The impressive replicas are not a definitive effort to turn the Old Continent into an open-air museum, but the office of 20,000 Huawei researchers working to bring a future conceived as “all things connected, all things sensitive and all things intelligent,” as the firm’s chief spokesman, Joe Kelly, summarised.

Although Huawei works to maintain the leadership in the 5G race, and even the most visionary voices in the firm already imagine 6G, the outstanding challenges and concerns force the company to fight an everyday combat.

The battlefield is precisely Europe, not the quiet landscape built in Dongguan, but the mighty economic bloc and regulatory powerhouse sceptical of China’s commitments and suspicious of Chinese firms’ practices. 

As one Huawei employee said on condition of anonymity,  the EU will be the “swing partner” to decide whether the crusade to regain lost confidence bears results.

Trust

“Trust is critical” in technology, said Ken Hu, one of Huawei’s three rotating CEO, during the opening of the analysts summit in Shenzhen on Tuesday (16 April). 

But for the US and some senior EU officials, trust became a damaged good in Chinese hands, mostly because of the new law that forces Chinese companies to cooperate with their intelligence services.

The integrity of Huawei’s cutting-edge network may be compromised, insists Washington, who banned the company in its territory. 

Several governments in Europe sided with the US initially, but now the EU is running its own analysis to decide how to proceed.

Huawei defends its honour at times sending conciliatory signals but on occasion with a defiant tone, reflecting its unquestionable dominant position at home and abroad as the largest’s telecom equipment provider.

Last year, sales revenue was up 19.5% year-on-year, reaching $106 billion. In 2018, the company spent 14.6 billion on R+D, cementing its position as a leading player in patent registration.

Kelly and other Huawei representatives consulted for this article insist that China’s controversial intelligence law protects the companies’ legitimate interests, does not affect Chinese firms overseas, and claims that other countries including the US and Australia have similar rules. 

However, analysts cast some doubts on these arguments. 

“Regardless of what any law says, if the state asks you to do something, you’ll face consequences if you don’t, be they legal or more sinister. The [Communist] party is supreme and has the final say on everything,” Paul Haswell, a partner at Pinsent Masons in Hong Kong told The Financial Times.

Still, the company recalls the words of its founder Ren Zhengfei. In the midst of the controversy in February, he told journalists that he would close down the firm before giving up customers’ information to the Chinese authorities.

Praise

But Huawei is not only trying to reconquer European trust with proud manners, but also with complimentary gestures. 

Ren and his executives’ admiration for Europe seem to go beyond the $1.5 billion spent to build his European amusement park-style campus, including a private train, in Dongguan.

Hu said that Europe is doing “a great job” in the field of cybersecurity, as he praised the pragmatic and fact-based approach of the Europeans.

Hong-Eng Koh, Huawei’s global chief of public safety division, also welcomed EU’s general data protection regulation (GDPR) as an “asset” that would be copied in many parts of the world.

Data will play an ever increasing role in the future of the company, as it will feed the artificial intelligence that Huawei is placing at the core to achieve a seamless, zero-search user experience in the near future.

But despite the efforts to win the Europeans back, that also includes the opening of a cybersecurity centre in Brussels, Huawei representatives admit that they face an uphill battle to regain trust. 

The only way, an employee added, would be to develop single global standards for cybersecurity that do not discriminate depending on whether the company is Chinese, American or European.

In this regard, Huawei wants to shape the game. To build its case, it mentions around 240 certifications in cybersecurity granted by independent auditors, including some from the United States. 

The company stressed that its ‘Independent Cybersecurity Lab’ has veto power to stop any product that does not meet the highest standards of the industry in these field, as they have done 75 times in the last five years. 

However, Europe seems to look West when it comes to developing common cybersecurity standards.

Brussels not only suggested working together with Washington in this field in the context of trade negotiations, but also expressed its willingness to adopt standards already designed by US firms.

If the trade negotiations between China and the US come to fruition, Huawei could benefit from tailwings and be one inch closer to being part of the standard setting game.

The failure would expose the firm again to Donald Trump’s fury, at a time when the Europeans will be concluding the security review of the 5G network that may determine Huwaei’s future in a significant manner.

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