Should the World Be Scared of Huawei?

Illustration for article titled Should the World Be Scared of Huawei?

China's Huawei is growing fast, quickly rising to a strong position in the mobile market. But as it pushes abroad, it's facing a lot of skepticism from other governments and from direct competitors, in part because of its ties to its the country's People's Liberation Army. But are those legitimate fears, or are western companies just scared of the competition? America, The Economist reports, is particularly wary of the company and its government ties:

Huawei has worked on networks for a number of smallish mobile operators there, but its repeated attempts to buy American tech firms have been scuppered by official opposition. The Intelligence Committee of the House of Representatives is taking an interest in both Huawei and ZTE... Even in America, though, opinion is divided. One former member of the joint chiefs of staff dismisses the fears about Huawei as China-bashing; another says, "We'd be crazy to let Huawei on our networks, just crazy."


However, as the Economist points out, U.S. companies have accused Huawei of climbing this high through dishonest means, like stealing designs from American competitor Cisco, or using the government for financial support. Despite efforts to be more open about its goings-on, Huawei's practices are very secretive, giving credence to fears that it might actually be a secret tool of the communist party—a "digital Trojan horse."

This leaves the most troubling criticism: that the firm might be a creature of China's security services. Mr Ren's (Huawei's founder) past in the PLA fuels such suspicions, as does a reasonable perception that privately held Chinese companies are often in cahoots with the powers that be. The firm's dealings with unsavoury regimes such as Iran, where its salesmen boasted that their equipment makes it easier to spy on potential troublemakers, are taken as supporting this view.


Of course, as Huawei continues its global push, these questions will remain. And they will be challenges that both governments and private companies in the Western world must deal with. Head over to The Economist for the whole thing. It's a great read, and well worth your time. [The Economist via Buzzfeed]

Image credit: Aleksandar Mijatovic/Shutterstock

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Smoak on the Water

I work as a contractor for ZTE here in the United States, and it's interesting on how Huawei and ZTE get lumped together in every article. The two are Chinese companies, but one is privately-owned, and the other is a publicly-traded company. Otherwise, the biggest problem these companies share in the West is "guilt-by-association." If one company does something, the other is also implicated. I don't see Oracle routinely getting lumped in to an Apple lawsuit, or HP being mentioned in every Microsoft article, but it seems to happen routinely with ZTE and Huawei.

I also will point out that Western equipment manufacturers have a huge interest in advertising the missteps of Chinese telecom makers, while disguising or dismissing their own shady operations. Never underestimate the ability of American and European companies' ability to spread distrust though exceptional lobbying and thinly-veiled cultural attacks.