Nobody trusts Huawei, but evidence of its misdeeds is scant

Business & Technology

Here is the latest in the international saga that could be summarized as “Nobody trusts Huawei, for good reason, but evidence of its misdeeds is scant”:

  • Is the Vodafone backdoor story just hype? Yesterday, we noted a Bloomberg report (porous paywall) about Europe’s biggest phone company identifying “hidden backdoors in the software that could have given Huawei unauthorized access to the carrier’s fixed-line network in Italy.” Tech website The Registers debunks the claims, arguing that “We all want to see hard proof of deliberate espionage. This is absolutely not it.”
  • Huawei “seeks acceptance in the West, but its structure and value system — patterned after the Communist Party’s — could stand in the way,” says Li Yuan in the New York Times (porous paywall). This is very true. Huawei’s DNA is just like the Party: Its decision-making process is opaque, and it has real trouble communicating in an environment of free speech.
  • The debate over who really owns and controls Huawei continues. The Financial Times reports that Huawei says employees control the company through ‘virtual shares’ (paywall):

China’s biggest telecoms equipment provider Huawei has said a trade union that holds a majority stake in the company is merely a legal convenience and the group is really controlled by its employees. In a press conference on Thursday responding to speculation about Chinese government control of the group, which the US has accused of spying, Huawei said about half of its 180,000-odd employees own “virtual shares” that pay dividends and give them voting rights at company-wide elections.

But because Chinese laws restrict the number of shareholders in a business, Huawei’s holding company uses a structure that places 99 per cent of its shares under the control of a “Trade Union Committee” rather than the employees themselves.

Those who previously believed Huawei was employee-controlled will be reassured. Those who do not believe will remain completely unconvinced.

  • “Security officials from British telecoms operators are to meet with the leading U.S. diplomat on cybersecurity in London on Tuesday to discuss the risks of equipment made by China’s Huawei,” reports Reuters.

Related: “Super Micro Computer, the California-based server maker at the heart of spy chip allegations last autumn, has told suppliers to move production out of China to address U.S. customers’ concerns about cyber espionage risks,” reports Nikkei Asian Review (porous paywall).