Charles Parton

Why we’ll regret the Huawei gamble

Why we'll regret the Huawei gamble
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It is apparently fine for China to ban western technology from its telecommunications network but quite unacceptable for us to prioritise our national security. The decision to allow Huawei into the UK’s 5G network is the first of many tough choices in the new technological era. And we've flunked it.

Why is it a new technological era? Because we no longer simply buy goods in return for money. Increasingly we pay not just in coin, but in data as well; not just in a one-off transaction, but in a perpetual transfer of bytes back to the vendor. And when it comes to 5G, since it will underpin so much more of our lives than 4G, you need to trust that vendor.

Huawei has been designated a ‘high-risk vendor’. So it is. It is irrelevant whether or not it is a private company or even that China’s national security laws mandate compliance with all requests from the security services. Anyone with a passing acquaintance with the Chinese Communist Party (CCP) knows that refusal to comply with its demands is the fastest route to ruin. Mr Ren Zhengfei, founder of Huawei, has more than a passing acquaintance with the CCP.

All of which means that in allowing Huawei into our 5G system, we are allowing the CCP in too. We are trusting the Communist Party not to interfere over the next 20 or more years, even if relations become tense. This, by the way, is the same party whose leader, in his first major internal speech, talked of an ‘existential struggle’ with western capitalism.

The National Security Council, chaired by the Prime Minister, clearly believes that we can sidestep the trust issue by having the GCHQ ‘cell’ manage the risk of Huawei. There is a whiff of hubris. 5G will serve us for decades. Can the UK be confident that we can stay ahead of future developments? Our allies are less sure. Forget the Americans, if you wish, on the grounds that they are ideologues. But why has Australia, for whom China is a key trading partner, banned Huawei?

Our government seems confident that it can also manage the risk that the Americans will cut back on exchanges through the Five Eyes intelligence alliance. Sadly, it says something about trust between allies that the government's actions suggest they are taking these threats as mere bluff. Still, barring a burst of unpredictability from President Trump, it seems unlikely that the UK will be excluded. We do have valuable equity that the US will not wish to forgo. But let us not be naïve. The Americans are more subtle than to impose an embargo. Rather, they would just quietly cut back on what is shared, exclude our participation in developing new collection techniques, and ‘manage the risks’ to themselves as a result of our kowtowing to China.

The UK faces other potential downsides. What if the Americans tighten drastically the sale of US components to Huawei? Just because there is a tariff truce in the US-China trade war does not mean that the more serious battle over technological supremacy, level trade and investment is resolved. The GCHQ cell’s last two reports on Huawei have already described its technology as ‘shoddy’, something Huawei’s propaganda understandably skates over. How much shoddier might it become without access to necessary components? As the Spanish say, a poor man goes to market twice. BT and other companies may find that in pursuit of cheapness, they will eventually pay more.

Europe was looking for the UK’s lead on Huawei (we shall have to await the leaks from the NSC before we know whether setting an example featured in the considerations). If some form of divergence is unavoidable, we seem to prefer it to be at the expense of Five Eyes allies with whom we share the trinity of national security, political and economic systems, and values. The alternative would be to upset the feelings of 1.4 billion people, as the Chinese Communist Party likes to say when other governments fail to bend to its bidding.

Charles Parton OBE is a senior associate fellow at the Royal United Services Institute.