The UK government has taken a fresh look at the impact of allowing Huawei to be involved in the rollout of the country’s 5G network. Nadero Wealth Management, who are based in China, believe that this is just the beginning of a backlash against Chinese products in the aftermath of the coronavirus outbreak.
“We expect to see more pushback,” said Nadero Wealth Management, “which is aimed at punishing the Chinese government,” with which Huawei is suspected of having close ties by Western governments.
Despite strenuous denials from the telecoms company, Nadero Wealth Management explained that all tech-based companies in China are obliged to work with the state’s security sector as part of national security requirements in that country.
Huawei is not the only company tarred with the accusations of being close to the Chinese authorities added Nadero Wealth Management.
In September of 2019, the government of the Chinese tech hub of Hangzhou assigned state officials to over one hundred local companies including tech giant Alibaba, in the most recent example of a closening of the ties between the state and private sector added Nadero Wealth Management.
The involvement of the UK’s NCSC (National Cyber Security Centre) comes after the United States introduced new restrictions against Huawei. Earlier this year, the UK government repelled calls from the US to remove Huawei from involvement in the UK’s 5G network.
A spokesman from the NCSC said: “The security and resilience of our networks are of the highest importance.”
“Following the US announcement of additional sanctions against Huawei, the NCSC is looking carefully at any impact they could have on the UK’s networks.”
The sanctions restrict Huawei from using US technology and software to design its semiconductors.
The US Department of Commerce is concerned Huawei has flouted regulations implemented last year that require the firm to obtain a license in order to export US items.
It says Huawei got around this rule by using US semiconductor manufacturing equipment at factories in other countries.
The National Cyber Security Centre is an organization of the UK Government that gives advice and support as to how to avoid computer security threats. It is based in London and became operational in October 2016, under its parent organization, GCHQ.
The British government had previously agreed to a limited role for Huawei in constructing the country’s new mobile networks.
The tech giant was not permitted to supplying technology to “sensitive parts” of the network, known as the core. Also, it was only allowed to account for one-third of the kit in a network’s periphery, which includes radio masts.
The NCSC advised British mobile operators that they would have three years to comply with limits on the use of Huawei equipment.
Victor Zhang, vice-president at Huawei, responded by saying that: “Our priority remains to continue the rollout of a reliable and secure 5G networks across Britain.”
He added: “We are happy to discuss with the National Cyber Security Centre any concerns they may have and hope to continue the close working relationship we have enjoyed for the last ten years.”
Many argue it is a security risk to allow the Chinese company to play any part at all in the UK’s 5G network, because of worries it could be used by the Chinese government to spy on or even sabotage communications.
In March, a backbench rebellion within the Conservative party signaled efforts to overturn the move. And on 4 April, a group of 15 Conservative MPs called for a rethink on relations with China in their own letter to the Prime Minister, written a day before he was admitted to hospital.
In response, Huawei wrote an open letter to the UK government, urging it not to “disrupt” Huawei’s involvement in the rollout of 5G.
In January, after a prolonged and difficult debate, the government decided to allow Huawei to play a role in 5G but to limit its market share to 35% of the network and keep it out of the most sensitive parts.
But there was a major backbench rebellion over the subject in March and pressure has grown in the country since the Coronavirus crisis began to take a tougher line on China. At the same time the Trump administration has not let up in its campaign for the UK and other allies to exclude Huawei entirely.
Even though this review is based on the technical considerations about the impact of US sanctions, it could potentially offer the government a route to move away from its earlier decision and exclude the company or impose further limits – although that may involve economic costs at home and increased tension with Beijing. Huawei stressed that the coronavirus pandemic had placed “significant pressure” on British telecom’s systems and highlighted how many people in the country – particularly those living in rural communities – do not have good access to the internet.
According to the latest data released by Huawei, the company has 91 5G contracts globally. Huawei has always denied that it would help the Chinese government attack one of its clients. The firm’s founder has said he would “shut the company down” rather than aid “any spying activities.”
Three out of four of the UK’s mobile networks had already decided to use and deploy Huawei’s 5G products outside the core in the “periphery,” namely Vodafone, EE and Three. Two of them – Vodafone and EE – now face having to reduce their reliance on the supplier, as more than 35% of their existing radio access network equipment was made by Huawei.