Between Huawei and a hard place
18 September 2019
Tempers have been running hot in New Zealand since the GCSB denied Spark's request to use Huawei equipment in its planned roll-out of 5G services.
Huawei NZ deputy chief executive Andrew Bowater has been the public face of Huawei's campaign against the decision, criticising it as unfair, claiming it left some staff 'in tears'. The company launched a somewhat hamfisted PR campaign designed to pull at New Zealanders' heartstrings, declaring itself to be as integral to 5G as New Zealand is to rugby.
Senior to Bowater, and rarely mentioned in the New Zealand media until his letter to government ministers was leaked to the media, is Huawei NZ managing director Yanek Fan. Fan reportedly wrote to GCSB Minister Andrew Little and Communications Minister Kris Faafoi in July this year, to complain that it would be "arbitrary and capricious" to single out his company under a "country of origin" approach to assessing risks.
The letter threatened to leave the New Zealand market if it was excluded from supplying 5G equipment, and pointed to research it had commissioned that estimated hundreds of millions of dollars in extra costs for New Zealand if Huawei were to be excluded.
The company launched a somewhat hamfisted PR campaign designed to pull at New Zealanders' heartstrings, declaring itself to be as integral to 5G as New Zealand is to rugby.
Among New Zealanders weighing into the issue, there are those for whom doing business with Huawei makes commercial sense and for whom New Zealand’s trade interests trump security concerns. They raise the spectre of irking China, our largest market, if we appear to be acting unfairly against Huawei and dismiss concerns about the vulnerability of Huawei gear as without evidence. Others have urged New Zealand not to be seen to appease the U.S., which has banned Huawei from the U.S. market.
Officially, the GCSB decision in November 2018 had nothing to do with politics or big-picture international security issues. It made its assessment of Huawei's kit on technical grounds and, unsurprisingly, has not released its analysis publicly. Senior officials from GCHQ, the GCSB's sister agency in the UK, however, have publicly described Huawei's software as "very, very shoddy", raising concerns about "basic engineering competence and cyber security hygiene that give rise to vulnerabilities that are capable of being exploited by a range of actors."
Despite the British conclusion that it could 'manage the threat' associated with Huawei, senior intelligence officials there are on record as being wary of China's technological might. Huawei NZ has had nine months to respond to the GCSB's concerns but does not appear to have done so, preferring to press for direct engagement at the ministerial level.
Rather than work on the alleged technical vulnerabilities in its equipment, Huawei NZ has run a public relations campaign, gambling that the commercial advantages for New Zealand partners will prove paramount.
We are a mercantile country, unused to viewing commercial transactions in the light of national security concerns. Some of Huawei's would-be local allies to raise the potential for Chinese retaliation as a reason for ensuring Huawei does have access to 5G projects here. From a security lens, potential retaliation by China actually reinforces the reasons to be wary of over-reliance on a country that has been willing to use coercive economic diplomacy against weaker economic partners.
Huawei cannot be blamed for the action of the Chinese government. It has connections with the Chinese Communist Party, making its early major contracts with the People’s Liberation Army, and gaining the status of "national champion" in China since 1996, but as argued by its founder Ren Zhengfei, this did not guarantee the company's remarkable growth. Like all Chinese companies, it is subject to a 2017 national intelligence law obliging them to cooperate with the state intelligence agencies.
Could using Huawei kit on national 5G networks create a window for information to leak to China's intelligence agencies? Few outsiders will have the competence to assess this risk. A longer-term lens would also assess vulnerability arising from later upgrades, servicing and other connections that may create a degree of dependence.
Is it reasonable to treat Huawei as just another supplier, alongside Sweden's Ericsson or Finland's Nokia? It is hard to avoid the judgement that China's role in world affairs weighs more heavily than that of Finland or Norway. It is not necessary to side with the China hawks who see China's rise in zero-sum terms to take note of the unavoidable geopolitics of the present US-China relationship.
The New Zealand government will, wisely, avoid linking its actions on Huawei to its foreign policy. But the strategic landscape forms the background for its decision nonetheless, and will not be willed away by those who would rather see commerce proceed in a separate sphere.
Professor Natasha Hamilton-Hart is Director of the New Zealand Asia Institute at the University of Auckland Business School.
This article reflects the opinion of the author and not necessarily the views of the University of Auckland.
Used with permission of Newshub, New Zealand is between Huawei and a hard place, published on 14 August 2019.
Miranda Playfair | Media Adviser
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