Britain finds itself in an uncomfortable position: It doesn’t like the fact that Huawei, a large Chinese firm that manufactures telecoms equipment, is deeply embedded in what Britain calls its “critical national infrastructure,” which includes energy supply pipelines, transportation infrastructure, water supplies, and telecommunications networks. But there is nothing it can do.
Unlike Australia, which outright blocked Huawei from participating in its national broadband network, or America, which has so far been reluctant to let Huawei supply equipment domestically, Britain cannot undo what has already been done. Huawei won a contract to supply equipment to BT, which owns most of Britain’s physical telecoms infrastructure, back in 2005.
Huawei is also pumping £1.3 billion ($2 billion) into the UK economy through investment in research and jobs. It opened a Cyber Security Evaluation Center, better known simply as “the cell,” in Banbury, Oxfordshire, to test Huawei’s hardware and software before it is put to use in Britain.
This morning, a parliamentary Intelligence and Security Committee issued a report (pdf) that looks into “the implications for national security” of “foreign involvement in the critical national infrastructure.” Even a quick glance will show that it should actually have been called “What do you do with a problem like Huawei?” The report says the committee was shocked that ministers were not consulted when BT first mentioned that Huawei was interested in supplying equipment for its £10 billion upgrade project.
The committee—along with Australia, America, India, and even Canada—worries about Huawei’s purported links to the Chinese state, based on its founders’ former career in the People’s Liberation Army, generous state backing, and China’s reputation for cyber-espionage. What, they wonder, is to stop Huawei from installing malware or snooping systems in what GCHQ, Britain’s signals intelligence agency, acknowledges is “over a million lines of code” that “it is just impossible to go through”? China could filch information. Or maybe it could turn off all Huawei-made equipment. Who can say?
These concerns are valid, but only to an extent. It is, as the report wisely acknowledges, impractical to constrain supply of equipment to domestic manufacturers. Given the nature of global supply chains, there is no longer such a thing, anyway: Most such equipment is manufactured in China. Nor is protectionism really Britain’s style.
Instead, the committee makes two recommendations, one sensible and one less so. The first is to populate Huawei’s cell, presently filled with the firm’s employees, with monitors from GCHQ. This is bonkers. The agency argues, rightly, that the cell is well-managed as it is. And Huawei points out that any improper behavior “ultimately would strike a fatal blow to the company’s business operations.” Indeed, tired of being harangued, Huawei recently said it had lost interest in the US market.
The other proposal is more sensible and a route that America should consider as a means of doing business with Huawei: Put in place a robust system for the government to monitor investment into national infrastructure by foreign organisations, and to impose conditions for managing risk, such as setting up cells akin to the one monitoring Huawei. Good oversight beats bombastic protectionism any day of the week.