Trying to understand the Huawei threat
By Scott Sumner
I am not an expert on technology, and hence have trouble understanding the danger posed by Huawei, the Chinese supplier of telecommunications infrastructure. Thus I’ve been reading up on the issue, trying to better understand the exact nature of the threat. Today’s Financial Times provides one explanation:
UK prime minister Boris Johnson insists that Huawei will be limited to supplying 35 per cent of “non-core” network infrastructure. So while Huawei 5G may not touch critical national infrastructure such as the oil and gas sector, or nuclear and electric grids, it may have access to consumer and citizen data. That might seem of little concern at the individual level, but at societal level, the risk is not trivial — if metadata around consumer trends is at the disposal of a trade competitor, there is no reason to think that the competitor will abstain from creating further monopolies to undercut the UK economy.
That’s it? After reading the FT article, I am more confused than ever. What does “creating further monopolies” even mean? And is there a danger that the firms supplying the other 65% of non-core network infrastructure will also “create further monopolies”?
The UK is considered a trusted ally of the US, part of the so-called “five eyes” security system. In theory, the US is supposed to be willing to share important security information with the UK. But the US refuses to provide British intelligence with the evidence that it claims it has regarding the threat posed by Huawei:
British officials and executives at wireless companies have said the United States did not share smoking-gun evidence that would justify a ban of the Chinese company.
That makes me think this is not really about national security; it’s part of the Trump administration’s goal of preventing China from becoming a great power. That might well be a valid objective, but if that’s what this is all about then we should say so.
Tyler Cowen directed me to a very informative post by Christopher Balding. But while the post provided lots of information suggesting that Huawei was not independent of the Chinese government, the conclusions reached were not very persuasive:
Is Huawei a National Security Threat?
Defining national security broadly yes. For instance, we know that Huawei is continuing to deal with Iran having evidence of their continued dealings as late as November 2018. Huawei built the mobile network for North Korea. They are one of the dominant cloud providers of data collected on foreigners for China. They have provided security, surveillance, and censoring services to authoritarian governments. Even if we exclude the question of whether there are backdoors, very weak, or problematic security on their network gear, defined more broadly, they clearly pose a national security risk to democratic states.
1. I don’t see how Huawei dealings with Iran are a national security threat to the US. The real threat comes from the Trump administration’s decision to walk away from the recent multinational agreement with Iran, against the advice of our allies, which has caused Iran to re-start its nuclear program.
2. I don’t see why a mobile network in North Korea is a national security threat to the US. President Trump’s emotional and highly volatile attitude toward North Korea seems like a much greater risk.
3. What sort of data is being collected on “foreigners?”
4. Don’t US firms also provide technical assistance to authoritarian governments (such as Saudi Arabia, India and Philippines)?
I do see why people would be opposed to using Huawei infrastructure in military-related facilities. Beyond that, I’m having trouble understanding the risk.
Does anyone seriously think the Chinese would try to use Huawei devices to sabotage the British oil and gas sector? Think about that from the Chinese perspective. What are the costs and benefits of that sort of action? The potential benefit would be trivial, whereas the costs to China could be utterly catastrophic.
There’s a tendency of people to lose all sense of proportion when thinking about these issues. In the long run, the best hope for a safer world is for the entire world to become as rich as the West, and also much older, in which case the world will be mostly composed of highly risk averse older middle class people, who have a lot to lose from any major disturbance in the global economy.
That means it’s in our interest to become much more closely integrated with China, and for China to become much richer. Siamese twins have no incentive to fight with each other.