The tech world’s Cold War

NICK EICHER, HOST: Coming up next on The World and Everything in It: the Cold War in high tech.

MARY REICHARD, HOST: By now you probably have heard about the ongoing tensions between the United States government and a global Chinese telecom company called Huawei.

In December, Canadian officials arrested Huawei CFO Meng Wanzhou at the request of U.S. authorities. They accuse Meng of helping Huawei cover up violating sanctions against Iran.

EICHER: Over the past year, U.S. authorities also banned government agencies from using telecom products made by Huawei and other Chinese companies.

Earlier this month and in response, Huawei filed a lawsuit against the U.S. government, claiming the ban on its products is unconstitutional.

But as WORLD Radio’s Sarah Schweinsberg reports, the U.S. government’s beef isn’t with Huawei. It’s much more worried about the Chinese government it believes is really calling the shots.

SARAH SCHWEINSBERG, REPORTER: At the beginning of 2018, American intelligence agencies and the U.S. State Department embarked on a mission to inform the world about the danger presented by Chinese telecom companies like Huawei and ZTE.

Testifying in front of Congress last February, FBI Director Christopher Wray noted the companies aren’t independent from the Chinese government.

WRAY: We’re deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don’t share our values to gain positions of power inside our telecommunications networks.

The risk is that these companies could use their cell phones and telecom infrastructure to control networks and spy on the U.S. government, its citizens and businesses.

WRAY: It provides the capacity to maliciously modify or steal information and it provides the capacity to conduct undetected espionage.

Chinese telecom companies deny they answer to the Chinese government. But George Magnus, a research associate at Oxford University’s China Center, says two pieces of evidence suggest otherwise.

MAGNUS: A lot of people in the West believe that the law provides for a kind of mandatory cooperation on the part of Chinese companies and citizens in the intelligence gathering and manipulation and distribution as the government sees fit. The other is a kind of change that has taken place in which every company in China where there are three or more Communist party members must have a Communist Party Committee embedded in the company.

The U.S. government has concerns beyond U.S. borders as well, and those have to do with 5G.

5G is the next generation cellular network that will enable data downloads in just seconds. But it will also control other wireless technology like robots, security cameras, drones, and driverless cars.

Installing and operating 5G systems isn’t cheap. 5G technology will require significant investment in new fiber-optic networks that cost billions to operate.

Many poor, third world countries can’t afford that, so Chinese companies like Huawei have been offering to install 5G networks at prices Western telecom companies can’t compete with.

Oxford’s George Magnus says these business deals are a part of China’s larger push to become a dominant world power in the 21st century.

MAGNUS: We think that, artificial intelligence, digital technologies, quantum computing, the internet of things… They have huge implications for not only, uh, commercial brands and commercial success and productivity in the future, but also of course for military capacity and military prowess.

Chinese telecom companies have also offered 5G contracts to wealthier nations. In February, the United Arab Emirates said it would install Huawei’s 5G network. Saudi Arabia is also reportedly considering a similar deal.

Speaking to European leaders at the Munich Security Conference in February, Vice President Mike Pence warned that in the future, the U.S. might not share intelligence with nations that install Chinese-owned 5G networks.

PENCE: America is calling on all our security partners to be vigilant and to reject any enterprise that would compromise the integrity of our communications technology or national security systems. 

Chris Demchak is a cybersecurity professor at the United States Naval War College. Her views are her own and not necessarily the position of the U.S. government.

But Demchak says the Trump administration’s concerns over Chinese operated 5G networks is legitimate. Her research shows that in the past decade, on at least three separate occasions, a state-backed Chinese company called China Telecom diverted Internet traffic from other countries through China.

DEMCHAK: For example, we have a Canadian to Korean government traffic stream and for six months, the traffic that should have gone from Canada, um, directly through the US over to Korea instead went over to China, bounced around China and is then sent to Korea. Everything that they sent to each other could easily been copied, put on a server and then decrypted.

The U.S. campaign to form a bloc against Chinese telecom companies may be working, at least in Europe. Last week, NATO Secretary-General Jens Stoltenberg announced the military alliance is considering taking action to stop member nations’ potential investment in Huawei’s 5G technology.

Oxford’s George Magnus says the 5G race will continue to emphasize the growing fault lines between China’s authoritarian government and the West.

MAGNUS: We could end up with these kind of two technological universes, uh, where the West doesn’t let China into its tech universe and vice versa. It just becomes a kind of another manifestation of, of this kind of tech Cold War.

Reporting for WORLD Radio, I’m Sarah Schweinsberg.

(AP Photo/Tony Gutierrez, File) This March 7, 2019 file photo shows the Huawei Technologies Ltd. business location in Plano, Texas. 

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