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27 July 2020

Back channels soften UK blow for Huawei

The UK’s Observer newspaper has reported that Huawei has received confidential assurances that its continued presence in the UK will be condoned despite the government’s recent U-turn, which saw its future involvement in the country’s 5G infrastructure being blocked.

The reports do not come as a surprise. Huawei is, after all, still poised to build a $1bn R&D center near Cambridge, having been granted planning permission in June 2020 by the local government council.

The official public reason for the volte-face was that, as we reported last week, the USA had introduced the FDPR (Foreign-Produced Direct Product Rule) since the earlier decision granting Huawei a limited role in the UK’s 5G networks. FDPR barred Huawei from using chips made with US equipment, software or design expertise. The UK National Cyber Security Centre (NCSC) said this was a “game-changer” because  “no-one, anywhere in the world, can send Huawei-designed chips to Huawei if US technology was used in the design tools or manufacturing process”.

But privately, if the Observer story is to be believed, the UK government has told Huawei that the ban was driven largely by huge pressure from US president Donald Trump. Huawei has been given the impression that its involvement in R&D here is still welcomed and that the decision to ban the company could even be reversed under certain circumstances, for example a victory for Joe Biden in the forthcoming 2020 US Presidential election.

That is unlikely, not least because there is cross-party consensus in the US over the tougher China stance. Trump’s pressure on foreign governments to follow suit by banning Huawei is one of his least contentious policies inside the country.

The UK government’s nuanced position does though reflect the feeling that security is rather a red herring here. After all, the UK government established the Huawei Cyber Security Evaluation center back in 2010, since when GCHQ, the country’s national cybersecurity center, has consistently issued reassurances that the company poses no risk to national security.  A more recent review from the UK National Cyber Security Centre (NCSC) confirmed that providing precautions were taken, risks can be adequately mitigated.

Security risks revolve more around Huawei personnel present on the ground than trapdoors in the software, as appeared to be confirmed in January 2019 when one of the firm’s executives was arrested in Poland after being charged with spying for the Chinese government.

Huawei might have claimed this was a rogue employee, but there have been other instances of Chinese nationals working abroad being caught spying and in some cases such lone operations have led to theft of significant intellectual property or national secrets. Indeed, in the current political climate, there are likely to be tighter controls over Chinese nationals working in the UK, whether for Huawei or anyone else.