UK faces 'no win' decision over Huawei as the firm's CEO calls the US "over-concerned" about China's capabilities

Profile picture for user slauchlan By Stuart Lauchlan January 27, 2020
Summary:
Bojo's Choice - upset the US or upset China? Meanwhile Huawei founder and CEO says that his firm is ready to fend off US action to undermine its business.

Boris

On Friday night at 11pm local time, the United Kingdom will formally leave the European Union and start to negotiate its future as a separate trading nation with other countries, most notably the US and China. Before then however, there’s a tricky decision to be taken by the UK government, one that risks upsetting at least one, if not both, of those yearned-for trading partners and that’s to do with the role that Huawei does or does not play in the building out of Britain’s 5G network.

That decision is expected to be made public tomorrow and will in theory be based on the recommendations of the UK National Security Council. In practice, for Prime Minister Boris Johnson this is a choice that will be made with as much of an eye on its political and diplomatic ramifications as anything else.

Australia and the US have already banned the Chinese telecoms giant from having anything to do with their own 5G rollouts and the latter is coming down heavily on the UK to insist that it follows their lead. Given that Brexit supporters talk in terms of taking back sovereignty on Friday night, US Secretary of State Mike Pompeo knew exactly what he was doing when he warned:

The truth is that only nations able to protect their data will be sovereign.

The Americans have warned that if the Brits allow Huawei even a restricted stake in the UK 5G infrastructure plans, it will have a negative effect on Washington’s willingness to share intelligence information with London. That’s a humiliation that political posturing about a so-called ‘Special Relationship’ would not be able to mask. Coming on top of last week’s threats of punitive US tariffs on British goods if the UK proceeds with its planned Digital Services Tax in April, it’s not the best look for Johnson to have to sell to a Brexit Britain electorate.

On the other hand, striking a deal with China is also a priority. While Huawei insists that it is a private company and not part of the state-controlled surveillance system, there can be little doubt that Beijing wouldn’t hesitate to use a ban on the firm as a stick to beat the UK with in future negotiations or as a lever to stir up tensions between the US and its ally.

Bogeyman

The role that Huawei has been cast in by the US as global tech bogeyman arose last week in Davos at the World Economic Forum gathering, where Ren Zhengfei, Founder and Chief Executive Officer, Huawei Technologies, took part in a session entitled A Future Shaped By A Technology Arms Race. He was debating  Professor Yuval Noah Harari, history professor at the Hebrew University of Jerusalem and author of ‘Sapiens: A Brief History of Humankind’, ‘Homo Deus: A Brief History of Tomorrow’, and ’21 Lessons for the 21st Century’.

Zhengfei used the debate to provide some interesting insight into how Huawei sees itself, caught in the crossfire of war of words between Washington and Beijing. The US is overly concerned about China’s intentions was his inevitable contention, arguing that Washington may be over-estimating what its rival is capable of:

If we look at the education system in China, it is pretty much the same system designed for the Industrial Age, designed to develop engineers. Therefore, I think AI cannot grow very rapidly in China. AI requires a lot of mathematicians, requires a lot of supercomputers and requires a lot of a super connectivity and super storage. In those areas China is still starting when it comes to science and technology. Therefore the US is over-concerned. The US has got used to being the world number one and they have to be the best in everything they do. If there is someone who is better than them, they might not feel comfortable.

As for the US blacklisting of his firm, Zhengfei was quietly defiant:

We basically withstood the challenges. We did some preparation before that. This year the US might further escalate their campaign against Huawei,  but I feel the impact on Huawei's  business would not be very significant…If we had a sense of security from the US, we would not have had the need to come up with our backup plans. Since we didn't have that sense of security, we spent hundreds of billions of money to put up our own Plan B's. That's why we could withstand the first round of attack. This year in 2020, since we gained experience from last year, and we've got a stronger team, I think we are more confident that we can survive even further attacks.

He added:

Huawei used to be an admirer of the United States. Huawei is quite successful today, largely because we learned from the US for the most part of our management system. Since day one of Huawei, we hired dozens of American consulting firms, teaching us how to manage our business operations. During that period of time, the entire management system of Huawei is very much like the US [system]. The US should feel proud of that…I think the US should not be overly concerned about Huawei and Huawei's positioning in the world.

Arms race

That wasn’t a worldview that Professor Harari was able to support, although he did pitch an ‘each as bad as the other’ spin:

At present, we see a competition between state surveillance in China and surveillance capitalism in the US. So it's not like the US is free from surveillance, there is also a very sophisticated mechanism of surveillance there.

But the US/China tensions have wider implications:

At present there is no third serious third player in this arms race. The outcome of this arms race is really going to shape how everybody on the planet is going to live in 20 to 50 years, humans other animals, new kinds of entities.

Harari pointed to concerns around the use/abuse of artificial intelligence as an exemplar, drawing a comparison with age of the atom bomb and the Cold War to show how the stakes have risen:

The comparison with the atom bomb is important. It teaches us that when humanity recognises a common threat, then it can unite, even in the midst of a Cold War, to lay down rules and prevent the worst, which is what happened in the Cold War. The problem with AI compared with atomic weapons is that the danger is not so obvious. And at least for some actors, they see an enormous benefit from using it. With the atom bomb, the great thing was that everybody knew when you use it, it's the end of the world. You can't win a nuclear war, an all out nuclear war. But many people think, and I think with some good reason, that you can win an AI arms race. That's very dangerous because then the temptation to win the race and dominate the world is much bigger.

That’s a mindset that is on the rise in China and the US, he added:

I would say [it is in] Beijing and San Francisco. I think in Washington, they don't fully understand the implications of what is happening. I think at present, the race is really between Beijing and San Francisco. But San Francisco is getting closer to Washington because they need the backing of the government on this.

And everything will get worse, he warned:

Once you're in an arms race situation, there are so many technological developments and experiments, which are dangerous, and everybody may recognise that they are dangerous, and you don't want to go in that direction, at least not now. Your thinking is, 'Well, we don't want to do it. We are the good guys.. But we can't trust our rivals not to do it. The Americans must be doing it, the Chinese must be doing it. We can't stay behind. So we have to do it'. That's the arms race-based logic, A very, very clear example is autonomous weapon systems, which is a real arms race. You don't need to be a genius to realise this is a very dangerous development. But everybody's saying the same thing - 'We can't stay behind'.

My take

The Davos debate made some interesting global points, even if it did veer off into some dystopian alarmism in places. But for the UK government Huawei’s role as ‘the global tech bogeyman’ is the most pressing short-term consideration. Within UK government circles, most vocally among members of Prime Minister Johnson’s own party, there have been concerns expressed about the Chinese provider. At the same time, many of the same voices have been raised in protest at the UK essentially being threatened to toe the line by Washington.

What Johnson will be looking for is a fudge of some kind, a decision that allows him to appease all sides. Good luck with that, Boris. Pompeo is due to meet Johnson on Wednesday, two days before Brexit. The last thing the UK PM needs is an embarrassing photo op during which the country’s supposed closest ally comes on heavy. Of course, if he needs some last minute advice on what decision he should make, he could always ask Huawei’s well-connected Global Cyber-Security and Privacy Officer, John Suffolk, who prior to taking up that role in 2011, was Her Majesty’s Government CIO and CISO. He’s bound to have a view…