1. Why does the US have an issue with Huawei?
US government officials say Huawei could use its substantial presence in the world’s telecommunications networks to spy for the Chinese government. In 2012, a report by the US House Intelligence Committee singled out Huawei and ZTE Corp., another Chinese communications equipment maker, as potential security threats; the Federal Communications Commission in 2020 designated the companies as such and ordered US carriers to pull Huawei and ZTE equipment from their networks. Already in 2018, concerns about Huawei drove then-President Donald Trump to block a hostile takeover that could have curtailed American investments in chip and wireless technologies and handed global leadership to the Chinese company. Such concerns have grown as carriers spend billions of dollars on new 5G networks, which will collect data and enable services on an unparalleled scale.
2. How important is Huawei?
In just over three decades it’s grown from an electronics re-seller into one of the world’s biggest private companies, with leading positions in telecom gear, smartphones, cloud computing and cybersecurity, and substantial operations in Asia, Europe and Africa. Huawei generated 637 billion yuan ($96 billion) in revenue in 2021 -- more than twice that of Coca Cola Co. It’s plowed billions of dollars into 5G, breaking into the top 10 recipients of US patents in 2019, and helped to build 5G networks across the world. US sanctions spooked some Huawei customers and suppliers globally, while Chinese consumers and carriers rallied to its side.
3. Why is its equipment a security issue?
The US government — like the Chinese and others — is wary of employing foreign technology in vital communications for fear that manufacturers could install hidden “backdoors” for spies to access sensitive data, or that the companies themselves would hand it over to their home governments. 5G networks are of particular concern because they go beyond making smartphone downloads faster. They also will enable new technologies like self-driving cars and the Internet of Things. UK-based carrier Vodafone Group Plc was said to have found and fixed backdoors on Huawei equipment used in its Italian business in 2011 and 2012. While it’s hard to know if those vulnerabilities were nefarious or accidental, the revelation dealt a blow to Huawei’s reputation.
4.Are other Chinese companies feeling the heat?
Yes. In late 2020 the Pentagon added four more firms, including China National Offshore Oil Corp. and Semiconductor Manufacturing International Corp., to a list of those it says are owned or controlled by China’s military, exposing them to increased scrutiny and potential sanctions. Other Chinese tech giants have been blacklisted for allegedly being implicated in human rights violations against minority Muslims in the country’s Xinjiang region. They included Hangzhou Hikvision Digital Technology Co. and Zhejiang Dahua Technology Co., which by some accounts control as much as a third of the global market for video surveillance; SenseTime Group Ltd., the world’s most valuable artificial intelligence startup; and fellow AI giant Megvii Technology Ltd. ZTE almost collapsed after the US Commerce Department banned it for three months in 2018 from buying American technology.
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