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Economist Says Huawei Ban Based On "Innuendo And Assumption" – jj

Economist Says Huawei Ban Based On "Innuendo And Assumption"


If you’ve been thinking that placing Huawei on the US Entity List in mid-May is more of a political stunt than a national security move, you’re in good company with a leading economist who believes the same.

“The U.S. has not made a case against Huawei on national security grounds in any way whatsoever, there’s a lot of innuendo and assumption that’s been made, which is pretty consistent with the entire case that the U.S. has made on the Section 301 allegations against China. This administration does not do fact-based policy, it does politics-based policy and that’s likely to continue to be the case with Huawei and even the possible imposition of further tariffs,” said Senior Yale University Research Fellow and former Morgan Stanley Asia chairman Stephen Roach.

Roach may indeed be right in that Trump’s administration is motivated by politics more than anything else, and the current situation of giving American companies license to sell to Huawei without a standard of which industries can sell to Huawei and which cannot (except to say “unless it threatens national security”) isn’t explicit enough.

And yet, there are good reasons why Huawei is a national security risk. In the vulnerabilities and loopholes in its software, for example, Huawei has been told about a number of them that remain unfixed. Security reports from firms such as Finite State that tell us Huawei has potential backdoors in 55% of its devices are a troubling sign. There’s a national security risk: Americans who purchase these devices could find those backdoors exploited by the Chinese Government without their knowledge.

The close ties between Huawei and the People’s Liberation Army of China (PLA) is another national security risk. Military employees publish papers on technical topics, and Huawei employees publish alongside military employees with their credentials proudly displayed. With all Huawei’s ex-military employees with knowledge of hacking and intelligence, there’s a national security risk for Americans who use their products. For all Americans know, those “potential doors” Finite State discovered in Huawei devices could be intentional, part of the plan instead of part of the problem.

The Chinese Government and Huawei have worked together before, with Huawei having cooperated in at least ten governmental projects, from what has been documented.

Huawei is the second largest smartphone maker globally, but Shenzhen’s Pride is top in China. What’s interesting about this is that, if you look at the United States where Apple reigns supreme (it’s an American giant, not too surprising), other companies are able to sell in the mobile market and grab some significant market share.

Chinese Intelligence Law is itself a national security risk, as China Law states that entities told to cooperate with the Chinese Government must do so. Huawei says it wouldn’t put consumer privacy at risk and hand over user data if told to by the Chinese Government, but it would. Nokia CTO Marcus Weldon said in his response to Huawei’s troubling Finite State security report that Huawei received financial subsidies from the Chinese Government in China and made it hard for Nokia to compete in the mobile market. With the Chinese Government feeding Huawei money, there’s no way Huawei would just turn down government demands.

These reasons are sufficient for why Huawei is a national security risk. No public entity in any country gets away with failing to comply with its national government. Apple may have decided not to comply with the government request to unlock the iPhone 5c of a killer, but in a time of war, even the fruit company has to comply with US intelligence law. Huawei is no different in that than any other entity. As a Chinese corporation, it must comply with Chinese Intelligence Law and the Chinese Government. And since the Chinese Government and Huawei are so close, there’s little left to the imagination with regard to just what lengths Huawei would go to please the hand that feeds it.

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