The security issues surrounding the China trade talks

  • 28 May 2019
  • NormanL

The Trump administration's ongoing trade negotiations with China include a strong national security angle. A focus there is the Chinese telecommunications company Huawei, which has been the object of increased U.S. security scrutiny.

But the reason behind all the worries about Huawei aren't usually reported. This counterintelligence note from the FBI helps fill in the gaps as to why Huawei is a concern, and what the U.S. is doing about it:

With the expanded use of Huawei Technologies Inc. equipment and services in US telecommunications service provider networks, the Chinese Government’s potential access to US business communications is dramatically increasing. China’s intelligence services and Chinese cyber actors could exploit Chinese Government-supported telecommunication equipment on US networks operating as an advanced persistent threat. China makes no secret that its cyber warfare strategy is predicated on controlling global communications network infrastructure.

Since Huawei’s inception in 1987, the company continues to receive open support from senior Chinese Communist Party officials and People’s Liberation Army (PLA) Commanders. Bolstered by Chinese Government subsidization and direct financing, Huawei is able to offer unsuspecting US businesses low-cost offers in exchange for access to US networks.

And when access is given, real trouble starts:

T-Mobile created a phone-testing robot called Tappy that in a matter of days could test daily phone use and everyday functionality, compared to the weeks this testing used to take. As a handset supplier to T-Mobile in 2012, Huawei was granted access to the testing lab and the Tappy Robot after signing a clean room letter and non-disclosure agreements that prohibited photography, copying of source code, or any other theft of the technology.

Despite T-Mobile taking significant steps to protect its robot intellectual property, in May 2013 Huawei employees took photographs and stole T-Mobiles trade secrets including the robot finger. In 2017, T-Mobile won its civil lawsuit against Huawei, who was found to have misappropriated trade secrets belonging to T-Mobile, who was awarded $4.8 million by a jury. This shows the lengths that Huawei went to steal T-Mobile’s proprietary information and how it treats its business partners, despite having signed legal agreements.

While trade negotiations are notoriously difficult to follow, the profound and growing security concerns surrounding Huawei, the Chinese government, and its intelligence agencies are very clear. The U.S. is right to cast a wary eye at China's telecom giants.