Huawei is trying to solve a hard problem

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ON BALANCE, it seems implausible that a committee—let alone a committee run by grey-suited Communist Party commissars—could design anything as odd as the new research campus of Huawei, the Chinese telecommunications giant. Comprising 12 replica European “towns” spread across lush subtropical hills near the southern city of Dongguan, the campus houses 18,000 scientists, designers and other boffins in turreted German castles, Spanish mansions and Italian palazzi, connected by an antique-style red train. Staff canteens include Illy espresso bars and French bistros. A herd of bronze rhinoceroses grazes by the river that divides faux Verona from ersatz Heidelberg. It is not hard to see why the campus is a stop on tours that Huawei has started offering to foreign journalists in recent months. Impressive, mad and a bit tacky, the research campus is a suggestive bit of evidence. Perhaps Huawei may just be what it claims to be, at least when it comes to decisions about architecture: a privately held company guided by the ambitions and quirks of its billionaire founder, Ren Zhengfei, a former military engineer and Europhile history buff.

After 30 years spent largely shunning publicity, Huawei has turned into one of the world’s chattier high-technology firms, inviting journalists into once-secret research laboratories and smartphone assembly lines. The reasons for all this choreographed openness are straightforward. Huawei, whose worldwide revenues exceeded 720bn yuan ($102bn) in 2018, stands accused by Trump administration officials and members of Congress of being variously owned, subsidised or at least controlled by the Chinese state, with notably close links to the army and intelligence services. American officials accuse Huawei of stealing technology from American and other foreign rivals. They scoff at claims that the firm is owned by its own employees in a benign sort of shareholding co-operative, and that its Communist Party committee is tasked with nothing more sinister than staff training and welfare. The secretary of state, Mike Pompeo, has spent months touring the globe, urging allies not to allow Huawei to help build their 5G mobile telecommunications networks, with mixed success. In May Huawei’s reputation landed it on the American Commerce Department’s “entity list” of firms that may threaten national security.

Step back a bit, and the company’s woes are an early sighting of a conundrum with no easy solution. Technological advances are expanding the list of products and services that require a lifelong commitment of trust between clients and suppliers, from chips that keep aeroplanes aloft, to devices that control electrical power grids. At the same time, globalisation has built supply chains linking countries that do not much like each other. The problem is acute when those chains connect America, a country used to setting its own technical and security standards, to China, an uneasy mix of trade partner, commercial competitor and ideological rival.

Broadly speaking, when Chaguan visited the firm’s headquarters this week, senior Huawei officers advanced two different solutions to the problem of high-tech globalisation in a low-trust age. Only one of those solutions is very persuasive.

That persuasive idea is to treat distrust in global supply chains as a technical challenge, rather than a political one. In this model, distrust can never be eliminated but may be mitigated. A Huawei executive with experience in African and European markets, where the firm’s products are seen as robust and cheap, draws an analogy with the “ABC” approach to cyber-security, meaning: “Assume nothing. Believe nobody. Check everything.” Huawei high-ups praise Britain and other European countries for applying a risk-management approach to the task of building such infrastructure as wireless networks, involving common standards for security and transparency with which all companies are invited to comply, and lots of third-party verification. The organising principle is that no product should be either trusted or distrusted unconditionally, simply on the basis of its country of origin.

Huawei’s second, unpersuasive solution involves trying to convince outsiders that, given the right written and verbal assurances from the state, firms from China can, as it happens, be trusted not to help Chinese spies steal secrets. Thus Huawei bosses note assurances from the Chinese foreign ministry that no law exists that could make Chinese firms install backdoors in digital devices, for spies to use. Asked about national-security laws requiring firms to assist Chinese intelligence services, they retort that such laws do not apply outside China’s borders. A company executive grumbles that Western sceptics seem to doubt that China is run according to the rule of law. At times, a cultural gap in perceptions is detectable. Huawei veterans recall their firm’s early years, when state-owned enterprises bullied private businesses, and on occasion lobbied government officials to deny Huawei the right to seek overseas business. China is so much more open now, such veterans say, lamenting that outsiders cannot see this, or prefer to focus on remaining differences with the West.

What Huawei should say, but cannot

Alas, it is not credible to claim that promises or laws bind the Communist Party and its security apparatus. The party explicitly claims “absolute leadership” over courts, calling judicial independence a Western error. Then there is the exceptional size of China’s visible machinery of repression and surveillance. Given that security services in every country tend to be like icebergs, with still-larger hidden parts, it is reasonable to be exceptionally wary of China’s.

A more convincing approach would see Huawei admit that China is different and concede that some party commands cannot be defied. That agreed, Huawei could then focus on making high-tech products and systems designed for use in a world of low or non-existent trust. Huawei bosses cannot make that argument, because party leaders would be incensed. Those turreted castles are impressive. But outside those manicured grounds is China.

This article appeared in the China section of the print edition under the headline "Distrust and verify"