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Trump’s Huawei Reprieve Is A National Security Debacle

Authored by Gordon Chang via The Gatestone Institute:


Tuesday, Commerce Secretary Wilbur Ross outlined the scope of exemptions to be granted to sales and licenses to Huawei Technologies, the Chinese telecom giant.

At the end of last month, President Donald Trump publicly promised to give the Chinese company a reprieve from newly implemented U.S. restrictions.

Trump’s move, announced after his meeting with Chinese ruler Xi Jinping at the conclusion of the Osaka G20 summit, was a strategic mistake. Moreover, it was a humiliation for the United States, almost an acknowledgment of Beijing’s supremacy.

The U.S. Commerce Department, effective May 16, added Huawei, the world’s largest networking equipment manufacturer and second-largest smartphone maker, to its Entity List. The designation means that no American company, without prior approval from the Bureau of Industry and Security, is allowed to sell or license to Huawei products and technology covered by the U.S. Export Administration Regulations.

Beijing then demanded the Trump administration withdraw the designation. On June 27, the Wall Street Journal reported that Huawei’s removal from the Entity List was one of China’s three main preconditions to a comprehensive trade deal.

Trump, incredibly, complied with the demand from Beijing. At his June 29 press conference, the American president said he was granting the reprieve.

Trump was not specific about the reprieve’s scope, and since then administration officials have tried to walk back his comments. Trade advisor Peter Navarro, for instance, this month told CNN that sales to Huawei for its 5G products — 5G is the fifth generation of wireless communication — would be forbidden. Earlier, there were suggestions that waivers for smartphones would be allowed.

Should any waivers be granted? “It is their mechanism for spying,” Senator Marsha Blackburn (R-TN), referring to Huawei, told Fox News on Sunday.

She is right. Huawei is in no position to resist Beijing’s demands to illicitly gather intelligence. For one thing, Beijing owns Huawei. The Shenzhen-based enterprise maintains it is “employee-owned,” but that is an exaggeration. Founder Ren Zhengfei holds a 1 percent stake, and the remainder is effectively owned by the state. Moreover, in the Communist Party’s top-down system, no one can resist a command from the ruling organization. Furthermore, Articles 7 and 14 of China’s National Intelligence Law, enacted in 2017, requires Chinese nationals and entities to spy if relevant authorities make a demand. Ren has maintained the company would not snoop on others, but that claim, in view of the above, is not credible.

Huawei has, in fact, been implicated in stealing tech almost from the moment it was formed in 1987. The company was built on stolen Cisco Systems technology, and according to recent allegations, Huawei has never stopped stealing. The Justice Department in January unsealed an indictment against the company for the theft of intellectual property from T-Mobile. The FBI, according to a Bloomberg report, is investigating Huawei for pilfering smartphone glass technology from Akhan Semiconductor, an Illinois-based firm.

Huawei’s rampant theft has been effective in injuring its competition. For instance, many consider the company’s campaign to take tech was largely responsible for the 2013 failure of Nortel Networks, the Canadian company.

Additionally, Beijing has used Huawei servers to surreptitiously download datafrom others, most notably the African Union from 2012 to 2017.

Not surprisingly, Huawei is laying the groundwork for grabbing tomorrow’s data.

First, Christopher Balding’s study of résumés of Huawei employees reveals that some of them claim concurrent links with units of the Chinese military, in roles that look as if they involve intelligence collection. As he writes in his study, “there is an undeniable relationship between Huawei and the Chinese state, military, and intelligence gathering services.”

Second, recent analyses show Huawei software to have an unusually high number of security flaws. According to Finite State, a cybersecurity firm, a scan of nearly 10,000 Huawei firmware images showed that “55% had at least one potential backdoor. These backdoor access vulnerabilities allow an attacker with knowledge of the firmware and/or with a corresponding cryptographic key to log into the device.” Huawei, according to the survey, ranked the lowest among its competitors in this regard.

Theft is not the only risk. As Sen. Blackburn pointed out to Fox News, Huawei will also serve as Beijing’s mechanism for controlling the networks operating the devices of tomorrow. The concern is that the Chinese government and military will be able to use Huawei equipment to remotely manipulate devices networked on the Internet of Things (IoT), no matter where those devices are located. So, China may be able to drive your car into oncoming traffic, unlock your front door, or turn off or speed up your pacemaker.

On Tuesday, Secretary Ross echoed earlier administration comments when he promised his department would only issue exemptions “where there is no threat to U.S. national security.”

That sounds reassuring, but it is not possible to divide Huawei into threatening and non-threatening components. Huawei management can take profits from innocuous-looking parts of the business to support the obviously dangerous parts. Money is fungible, so the only safe course would be to prohibit all transactions with the company.

Ross on Tuesday implied that licenses would be granted for items available from other countries, saying “we will try to make sure that we don’t just transfer revenue from the U.S. to foreign firms.” At first glance, sales of those items appear non-objectionable, but, as the New York Times reported on Tuesday, U.S. companies seeking exemptions acknowledge that their products are often more advanced than those from Japan, South Korea, and other countries.

Therefore, the better course would be to get all American suppliers to stop all sales and licenses and to rally Tokyo, Seoul, and other capitals to do the same. That would severely disrupt Huawei, perhaps forcing it out of business or at least impeding its progress. In short, Ross is underestimating America’s leverage.

As Eli Lake, writing on the Bloomberg site, points out, American policy on Huawei looks like it had “collapsed” after the bilateral meeting with Xi. Lake is right. Beijing, buoyed by the talk of the American climb-down, is now fast selling Huawei equipment around the world, which means, in the normal course of events, the Chinese will soon control the world’s 5G backbone.

Think of the consequences.

“Imagine a world dominated by China,” Jonathan Bass of PTM Images told Gatestone. “Close your eyes and pretend to wake up in a world controlled by Xi Jinping, militarily, economically, politically, culturally.”

This is the world, thanks to Huawei, that we will soon face.

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The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of The Duran.

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JohnnyRVF
JohnnyRVF
July 13, 2019

I would rather the Chinese vision of a world where people are pulled out of poverty, where money is invested in the people and the infrastructure than the constant impoverishment of the citizen and enriching to obscene levels of a corrupted, vile elite. Epstein and his orgy island come to mind. I don’t know how this garbage got posted on the Duran but it would appear that there was a serious lapse in the editing dept. with this article.

Vic 1
Vic 1
Reply to  JohnnyRVF
July 13, 2019

To me this article remains in focus on today’s trend of international business. What can go wrong?

Terry
Terry
Reply to  JohnnyRVF
July 15, 2019

Totally agree Jonny. If we have chose between the black swamp or Confusius, I will take the latter.

therevolutionwas
therevolutionwas
July 13, 2019

Gordon Chang and his fellow Zio-neocons in panic mode?

Bente Petersen
Bente Petersen
July 13, 2019

Sounds like this article is written by US state employee or troll ….

Dan Kuhn
July 13, 2019

How did this China bashing article make it into the Duran? Shameful.

M Henri Day
M Henri Day
Reply to  Dan Kuhn
July 14, 2019

Exactly what I thought – Gordon Guthrie Chang (章家敦) on the Duran ? Who’s next, John Robert Bolton ?…

Henri

Paddy Jameson Power
Paddy Jameson Power
July 13, 2019

What a load of Bs! As if the USA doesn’t spy on everyone – – the reason they’re trying to ban Huawei is because the Chinese company is not allowing them backdoors on its products to spy on the whole world.
Shame on the Duran for publishing this USA propaganda nonsense.

Goggles
Goggles
July 14, 2019

Nortel’s executive management’s incompetence was responsible for its demise, not China. As an ex-shareholder, I know this for a fact, and makes the rest this article’s allegations against Huawei utter garbage.

Regula
Regula
July 14, 2019

This is a CIA smear article: it is factually and procedurally false. For one thing: it is the US tech industry who implored Trump to rescind the ban, as they know that Huawei is close to breaking out and replacing US tech with made in China tech. That would in fact sink the entire US tech industry. Without Google on its phones, Google will lose the US and the Chinese advertising markets. The US tech industry is losing $11b in revenue when sales are already decreasing, not increasing. As to backdoors: those were installed on Huawei devices by the US… Read more »

Terry
Terry
Reply to  Regula
July 15, 2019

Thank you sir.

Thraxite
July 14, 2019

What is this one-eyed political hit piece of crap article about? All these accusations can be levelled at American companies actions. Apparently if China does it it is bad, when America does it it is good. Bollocks, America got where it is through theft and bribery or do you think an organisation that has a budget of 80 billion and a mandate to (as Pompeo said) Steal, Cheat and Lie is somehow more moral? Pathetic article and a very poor choice for inclusion on the Duran Site. Kinda starting to make yourselves irrelevant with your UK/US bias becoming more pronounced.

Stop Bush and Clinton
July 14, 2019

Note the exact phrasing, “POTENTIAL backdoor”. As a computer scientist, let me tell you that it’s easy to make programming mistakes that could be exploited as a backdoor if found. Those security bugs are common in software developed all over the globe. Of course if they’re found in a US product it’s a mistake, and if they’re found in a Huawei product it’s intentional. If they had found anything other than a possibly exploitable bug, they wouldn’t refer to it as a POTENTIAL backdoor – it would be just a backdoor. Like the one Microsoft has been building into their… Read more »

Pentagon silent on Turkey’s S-400 delivery as Congress demands immediate sanctions

Is this Project Mayhem or Project Epstein?