Friend or foe? What Huawei's case says about China-US relations

Huawei used to position itself as the company with the cheapest and most advanced technology for the core 5G network, as well as the only company that can build an end-to-end 5G network. But at least in the UK it will not have the chance to prove it.

The conflict is quite simple - the US and other concerned parties claim that Huawei's equipment can be used for spying by Chinese government. The company has repeatedly denied the allegations but not many are convinced. Huawei is one of the world’s biggest information and communications technology infrastructure and smart devices providers, and is the second-largest smartphone brand globally.

"The UK can no longer be confident it will be able to guarantee the security of future Huawei 5G equipment," Digital and Culture Minister Oliver Dowden said on Tuesday. He explained that the US sanctions created an uncertainty in Huawei’s supply chain.

Now Huawei’s equipment must be removed from the UK’s 5G network by 2027. Mobile providers are banned from buying the company’s equipment starting next year.

Huawei’s frustration

Huawei responded by saying that this is bad news for anyone in the UK with a mobile phone. It is believed that the newest ban will delay the UK’s 5G rollout by a year. The ban does not affect the trade of mobile phones.

Ed Brewster, a spokesperson for Huawei UK, said: "This disappointing decision is bad news for anyone in the UK with a mobile phone. It threatens to move Britain into the digital slow lane, push up bills and deepen the digital divide."

But Huawei has been in frustration long before this happened. In recent years the company has been at the center of attention as the trade war between China and the US escalated.

Huawei has even rolled out a social media campaign, raising and answering such questions as “Is Huawei a thief” or educating people on how to avoid being fooled by conspiracy theories – hinting that the company is itself a victim of such a conspiracy. 

Huawei has even temporarily set up a newsroom. Guo Ping, Huawei’s Rotating Chairman, said to the pretend-to-be news host Susie, that last year was special and difficult for Huawei. This is true, whether the company has deserved it or not. And the future looks even gloomier.

All roads lead to Washington

Last year the US added Huawei to its special Entity List. The country’s Commerce Department concluded that the company was engaged in activities that are contrary to the US national security or foreign policy interest. 

This year, US firms were banned from doing business with Huawei and the White House encouraged its allies to follow the lead. So naturally the UK's decision was applauded by the Trump administration.

“Today’s decision by the UK to ban Huawei from its 5G networks advances Transatlantic security in the #5G era while protecting citizens’ privacy, national security, and free-world values,” Secretary of State Mike Pompeo wrote on Twitter.

Australia and New Zealand have also banned Huawei. Some other countries want to at least limit Huawei’s involvement in 5G. For example, France decided not to ban Huawei, but at the same time urged telcos to avoid its equipment. Will other NATO allies follow suit?

The White House strongly believes that the company is backed by the Chinese military. Huawei was founded by a former army officer Mr. Ren Zhengfei, who still holds a small percentage of shares and is the CEO of Huawei. The company’s critics are not convinced that it is possible to grow to such an extent without the Chinese government being involved.

Huawei is not the only company that is accused of relations with the military. The US Defence Department has identified more than 20 Chinese firms allegedly owned or otherwise controlled by Chinese military. It’s worth noting that the US and China are in a trade war at the moment.