Germany takes on China’s Huawei

Germany takes on China’s Huawei

Several European diplomats have charged Germany with levelling “veiled criticism” at Beijing, and Chinese telecommunications giant Huawei Technologies, after Berlin warned against possible cybersecurity attacks in the future. 

In a national risk assessment conducted by the European Commission, the German government warned that cybersecurity attacks could be launched by “nation states or nation state-backed actors” on future 5G networks within the European Union. 

“It’s obvious the German government is referring to Huawei and China,” a European diplomatic source told Hong Kong’s the South China Morning Post, “given that the company is the leading player in 5G and the biggest concern for Europe. It will be interesting to see what other EU member states will say in their submissions.”

Berlin’s comments align with growing public concern over the vulnerability of networks, programmes, data and devices linked to new 5G, or fifth-generation, data transmission.

Chinese technology companies have been quick to dominate the global market, with Huawei raking in US$52.5 billion from its consumer business in 2018, a massive 45% increase in revenue compared to the previous year. Moreover, the family-run firm has signed over 45 commercial 5G contracts worldwide, and has plans to ship more than 100,000 base stations to run the super-fast networks. 

Huawei’s rise, however, has also pushed the firm into global security cross-hairs. As the vanguard of China’s global technology ambitions, Huawei has been branded a national security threat by a growing body of commentators, with US President Trump taking up the cause with his usual enthusiasm. 

“It’s a national security concern,” Trump told reporters earlier this month, “Huawei is a big concern of our military, of our intelligence agencies, and we are not doing business with Huawei.”

Many have described Huawei’s meteoric rise as a wake-up call for the American technology sector, apparently caught resting on its laurels after the 4G revolution opened the way for the smartphone era and Western giants Apple, Google, Facebook, Amazon and Netflix. 

“The leader of 5G stands to gain hundreds of billions of dollars in revenue over the next decade,” the Defense Innovation Board reported to the US Department of Defence. “The country that owns 5G will own many of these innovations and set the standards for the rest of the world…that country is currently not likely to be the United States.”

In light of the debate, a number of countries have already imposed restrictions on the use of Huawei 5G products, including the US, Australia, New Zealand, Japan and the Czech Republic. The rest of Europe is weighing up whether or not to follow suit. 

Nonetheless, Huawei has already secured a something of a foothold in the European market, where the Chinese giant’s hardware can be found throughout the region’s 4G networks. At the same time, Huawei has been appealing to EU members to oppose a US bid to blacklist the firm from supplying Europe with 5G mobile network infrastructure and technology. 

The European Commission is to prepare a coordinated, bloc-wide evaluation of the potential risks posed to, and associated with, 5G networks by 3 October. The commission will propose measures for addressing risks identified by the end of the year.

Joanna Eva is a London-based analyst and contributor with a range of clients in the risk consulting industry. She specializes in Asian political and economic analysis, having lived and travelled extensively in the region for close to a decade. She holds a Master of Law from the University of New South Wales and received her Bachelor of International Studies from the University of Sydney. She is proficient in English and Mandarin Chinese.

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