Much has been made about the recent Huawei ban by the Trump administration. It is mostly the headlines that are making their way to people with very little in the form of the reasons behind them. Because of the size of Huawei, the ban’s consequences come from different news sources. For example, you may hear “Huawei Android phones banned”, or “Huawei 5G banned in the US”, or “Huawei Matepro laptop banned”.
As a reader what are you to think? First, the ban is not against Huawei products. It is against any entity or person deemed a foreign adversary.
the term “foreign adversary” means any foreign government or foreign non-government person engaged in a long‑term pattern or serious instances of conduct significantly adverse to the national security of the United States or security and safety of United States persons;
https://www.whitehouse.gov/presidential-actions/executive-order-securing-information-communications-technology-services-supply-chain/
Huawei’s activities fit this definition, so did ZTE, and hence they are banned. Second, there have been many recorded instances where Huawei has been either caught or suspected of stealing intellectual property from the companies with which is works.
Intellectual property, or IP, protection has been a tricky issue for companies outside of China to deal with. There are two reasons; 1) China has a policy called National Indigenous Innovation Capability which encourages technological and scientific innovation to come from within China. Chinese companies which are considered to be following this policy can expect heavy investment from the Chinese government. For this reason, if you want your company to be successful in China, you must make sure you meet this policy. On the abstract, this policy is fine. We should encourage this throughout the world. The problem comes when Chinese companies, under pressure from this very strong incentive, force foreign partners to share their IP rights to them in order to partner together. With the Chinese economy growing at a record pace, non-Chinese companies find themselves without an option. It’s either share your IP rights in order to gain a foothold into the fastest growing economy or be left behind. 2) Even if you decline to enter the Chinese market, your IP could be stolen by a Chinese company and when this happens there will be very little repercussion.
Until now, we’ve discussed what Chinese companies, Huawei included, have done to American (or other non-Chinese) IP. Now let’s talk about what they can do with this information. Last year Bloomberg reported on a Chinese company that manufactured video-cards which could compress massive amounts of video data into a more efficient format. This meant that you could in theory serve more users with the same amount of bandwidth, and/or, stream better quality to those same users. The article reported how this video-card was a big hit among big tech companies, including Amazon and Apple and how, unbeknown to the seller of the product (IP holder), while in the supply chain, Chinese officials embedded a chip into the video-cards which allowed the Chinese to remotely retrieve data. The chip was minute. The whole thing was no wider than the tip of a pen. It was not found by the seller of the product, it was discovered by engineers at Apple who realized there was some odd network activity from servers using those video-cards (data being sent to China).
This all leads us to where we are today. While Huawei as not involved in the planting of the chip described above, it would stand to reason that given its history and its close ties to the Chinese government, that it could easily implant even more sophisticated homing equipment either in the hardware that is used for 5G communications, or the software that is used to monitor it, or both. And that given this would be “Huawei’s” equipment, as a user, you would have even less transparency about the inner workings of said equipment.
While some people, even people within Trump’s own administration, may claim this is a tactic for his trade war with China, I believe the President and his advisors are correct in imposing this ban. During the cold-war, the US and Russia fought over Nuclear power. The next war will be fought over information. The more you can control, the bigger the advantage you’ll have.
