Huawei spies for China? Not credible.
Next you'll tell me Microsoft spies for the US.
Michael Hayden, a former head of the CIA and the NSA, has openly accused Chinese networking giant Huawei of spying for China in a move likely to further inflame tensions between the US and China over state-sponsored hacking. Retired four star general Hayden told the Australian Financial Review that "at a minimum, Huawei would …
Huawei as a company does not.
It is a simple matter of how "power" is structured in a "communist" state.
You have the normal company hierarchy, etc - sort'a business as usual as we know it in the western world.
You have a _SECOND_ hierarchy - the party one. It can and does override what the first hierarchy decides on a regular basis and it is responsible solely along party lines. You cannot fire a commissar regardless how detrimental he is to your company business.
You have a _THIRD_ hierarchy - internal security. People on dual payroll which keep the population in line and provide the government with a constant flow of "information" so that the right people are directed down the green painted corridor to face the music at the right time. It is the "human" version of PRISM and it is what kept USSR and its allies in one piece for decades. Stazi, Securitate, KDS, etc all destroyed their archives. However, based on what we know between 0.1 and 1% of the workforce fall into this category. This hieararchy usually does not inervene directly. It feeds all information obtained on "enemies" to the country army, etc. It also provides information for the "second" level on what to override in normal business decisions.
You have a _FOURTH_ hierarchy - the party hierarchy of internal security which ensures that internal security does the party bidding and does not do a coup and take over power.
As anyone who has been in a meeting with Huawei as a (potential) customer can testify, that picture is clearly seen when dealing with them. You just need to be familiar with it to recognize it. From there onwards, as long hierarchy 2,3 and 4 are in place, you cannot assume that it will make decisions based on business reasons as all of them can and do override the business reasoning on a regular basis. Ditto for any Chinese company for that matter.
As far as UK being so welcoming to Huawei - well, it also has a multiple hierarchy system. Old boy network will always override any business decision even if it means bringing the company to its knees. So it is not surprising that Huawei feels at home there.
It's what we do with our main suppliers.
This is the trouble with all embedded software.
If you don't have the source code and can verify what in the source code was what was compiled it's very difficult to prove it's not compromised. And can you verify the compiler is doing what it claims and not inserting a few extra procedures? IE the classic Kerningham attack.
I'm starting to wonder if putting your comms through 2 routers (dissimilar hardware, different mfgs) and virtually all outgoing ports (and most incoming) blocked by default is the way to go.
Trouble is that even if you are using open-source software, the hardware is closed. For a one-household linux router, maybe there's not enough space in the hardware to hide a backdoor. But in a corporate backbone hub, there's plenty.
The ability to do unto others what they are doing to you - just do it first.
This is no different from what American companies have been doing for their governments for decades. Reporting back on the work they are undertaking, the technology they are using (subject to tight restrictions for reasons of "National Security"), quantities, locations and which other countries have suppliers in the area.
Just standard american "Reds under the bed" paranoia. - and yes: just because you're paranoid ...
So, no actual proof, then?
I mean, he's probably right, but we have this odd concept called "justice", where accusations of wrong-doing require backing up with proof and stuff. Quaint, I know, but I like it.
On another note, is this just a blatant attempt at mis-direction, to take some media heat off of the NSA and PRISM, do we think?
Yeah, but look at the boards of many big tech companies and you'll see ex-military and senior civil servants either seated directly on the board or executive management or working for a consulting firm whose only client seems to be that company. It is the remuneration they were promised for 'fixing things' but couldn't accept until they left public service. It's really dodgy and most tech companies have a really chummy back channel relationship with government because of it.
To me it looks like there are three distinct "charges" being levelled at Chinese companies like Huawei by the West.
I don't think the reporting of these separate issues has really made the differentiation very clear, and I think that's important because if we're comparing similar "espionage" by Western companies then the distinction is key.
1. "Espionage". This is a grey scale really, ranging from the extreme end, where we could accuse Huawei of tapping into "vital Twitter updates from Jordan or the latest winner of the Apprentice" through to the point that General Hayden made, that Huawei will have passed on detailed designs for national network infrastructure (eg. BT, TalkTalk) which could help the Chinese military conduct cyber attacks. The guy was actually making some sense until he brought God into it!
Do I believe it? I'm inclined to believe the lesser charges, but I doubt that Huawei is actively enabling tapping (other than that required by its customers).
Is the West equally guilty? Yes in terms of back doors, and national intercept initiatives like PRISM. But in the West it's getting harder to figure out where government ends and commercial tapping begins. In China I get the sense that it's still 100% government driven.
2. "Patent infringement".
Do I believe it? Yes. Huawei and other Chinese companies have a well documented record of patent violation, and the entire national culture needs to deal with better protection for intellectual property.
Is the West equally guilty? Not these days. Maybe in the past, but if anything we've moved too far the other way with Apple's trigger-happy lawyers being a prime example.
3. "Unfair competition". Basically where Chinese companies use government loans to undercut Western competition and drive them out of business.
Do I believe it? Yes. The National Bank of China gave Huawei and ZTE over $30B to do exactly that. Marconi, Nortel, Lucent and NSN have already "bit the dust" as a direct or contributory result of Chinese unfair trading practice.
Is the West equally guilty? Not really in the telecoms world. In the defence business it's a different (and very shameful) story.
So bottom line...instead of finding "reds under the beds" (or in our DSLAMs) we should be tackling the government funding of, and corruption by Chinese companies that is widespread, and eminently provable.
Just my 2 cents.
So Cisco have never had a bank loan? Is that what your saying?
Nortel went bust because of a lack of investment in new designs and more to the marketing power of Cisco than Huwawei's influence, who at theat time we only really large in Asia and very high end Telco kit.
Maybe the simple reason is Huwawei spends more on R&D and less on lawyers and marketing, which these days seems to be the other way around for western countries.
Just my 2p worth.
>>So Cisco have never had a bank loan? Is that what your saying?
No, mate. That's not what I'm saying. If Cisco took out a bank loan they would one day have to repay it, would have to pay interest, and the debt would appear on their balance sheet. None of these things is true with the "loan" to Huawei.
>> You mean like the Export Credit Guarantee Scheme ?
No, mate. The ECGS is a UK concept, and the UK no longer has a major telecoms manufacturer. Huawei took care of that already. (Actually to be fair Marconi was already dying, but BT's decision on 21CN to give Huawei 2 of the 5 slices of the network business was pretty much the last nail in the coffin).
Also, notwithstanding the fact that ECGS can be fiddled, the guarantee is only supposed to last 12 months. I don't know how common it is for the customer to "pay back nothing".
@Don Jefe 11:56
>> Like how Boeing and Airbus arrange preferential financing through their home goverments to get their planes sold?
No, mate. I'm talking about telecoms, not aviation. I appreciate it could all be bundled under "exports", but we're discussing network security here, as well as trade ethics. Boeing and Airbus are wrong to be using subsidies, just like Huawei is wrong to be using government subsidies.
I'm not trying to claim that Western companies are whiter than white here - goodness knows there've been some appalling breaches of ethics in the past. But surely this is the kind of thing we're trying to stamp out.
The other thing think I would say is that China is doing this on a huge scale. For goodness' sake - they built a flipping motorway in
I'm not saying that we need to stop them doing business in N.America and Europe - just that they have to play by the same rules of profit and loss as everybody else.
You've lost your mind if you believe any large industry in any country plays strictly by the balance sheet. It has never worked that way and never will.
A truly free market can never exist because the first 'person' to have enough money to manipulate the market and/or government in their favor will do so. That's an unavoidable fact of capitalism. One can argue that the ability to accumulate enough wealth to manipulate the markets/government is proof that capitalism is working. I don't necessarily agree with that argument, but a lot of economic theorists do.
"Basically where Chinese companies use government loans to undercut Western competition and drive them out of business."
You mean like the Export Credit Guarantee Scheme ? The idea being that if a customer doesn't feel like paying full whack they can pay a little bit (or nothing), but the exporter can claim the shortfall back from the tax payer.
Looks like a pretty nifty way to accomplish dumping and bribery with someone else's money to me.
It would be nice if the old boy network would deign to explain what benefit such a scheme is to the Tax Payer, sadly I doubt such an explanation will be forthcoming. ;)
Like how Boeing and Airbus arrange preferential financing through their home goverments to get their planes sold? I can't think of any government who doesn't subsidize their large scale manufacturing exports either directly or indirectly through tax benefits and such. It is common business.
The US has traditionally used government spending on military programs to subsidize R&D for commercial firms.
And with its willingness to spend any amount on the military -- a military budget equal to the next 12 highest spending nations combined -- the US is in a class of its own in subsidizing commercial R&D.
The greater advantage Chinese companies have is extremely low wages. But that is a benefit shared by a few dozen other very under developed countries, one that will evaporate as China becomes a proper nation with a proper middle class.
Whenever Boeing has a setback financially, the US government always has a Pentagon contract handy.
EADS won the aerial tanker contract and then Boeing started paying the lobbyists to get the contract cancelled and re-tendered.
The Lockheed 130 aircraft does not need to get orders passed by the Pentagon, Congress passed what amounts to a permanent order for them. The Pentagon say it doesn't need any more, which is why you see so many parked at shared-purpose airports in the USA.
China makes some technically very savvy stuff, and at good prices, which US companies cannot match.
So what does CISCO and company do? Have their products made in China! GE is massive in infrastructure control systems - again, all made in China.
When the whole Lockheed lobbying campaign against the EADS deal was in full swing there were crazy radio commercials here in DC.
The 'somber but mildly threatening deep voice guy' was doing voice overs with "your safety and the safety of our country depends on strategic assets like the [model x] being made by Americans in America. Would you trust the safety of our troops and our President to a foreign company"... "Contact your Congressman today". (The Voice also does the missile and armored troop carrier commercials, so you know he's serious)
I didn't think anyone paid any mind to the commercials but I overheard a conversation at lunch and these guys were talking about the commercial. I really couldn't believe it. Propaganda never seemed so easy.
No. Good FUD relies on the perceived power and knowledge of the speaker. Effective FUD sows the seeds of doubt and let's you draw your own conclusions. The idea being that human nature will make any unknown factor far more dangerous than it is in reality.
Knowing who this guy is, I would venture to say he is an expert in creating and disseminating FUD.
All the Western countries that are so fond of spying on their citizens should just outsource it to Huawei. It would certainly be a lot cheaper just to let the Chinese handle it then buy reports back from them. The potential savings in IT kit alone would be worth it and we'd be able to retask a bunch of government workers. The Chinese obviously have a better grasp on mass surveillance anyway and I'm sure they'd be able to make better use of the data.
While it is rich that he would criticise them for spying you do have to realise that he doesn't particularly care. From his perspective (and the US') they are a security risk, that's all he's saying. Whether the US does the same isn't really pertinent to the argument as he is talking from a purely national security perspective.
That said, I think a lot of journalists who cover China really don't have that much of an idea about how they organise themselves in business and politics. Anyone who does have experience of it will have no doubt that Huawei are in the CCP's pocket. There are A LOT of big business types over there that while not politically active in an overt sense, are members of the communist party and use their guanxi as a result of that to help them in business.
And to be brutally honest If I absolutely had to give my personal information over to someone it's a case of better the devil you know, if you think the US are an evil fascist state, you have not even scratched the surface of what the Chinese do in the same position.
He could even mean that Huawei pose a "security risk" to the US because unlike HP/Cisco/Barracuda/et al, they don't implant backdoors/vulnerabilities which the NSA can exploit. Therefore adoption of Huawei kit will/would displace NSA equipment and thus diminish the NSA's capability to monitor all those pesky Merkins^HHHHHHH terrorists, commies, etc...
"But God did not make enough slides on Huawei to convince me that having them involved in our critical communications infrastructure was going to be OK. This was my considered view, based on a four-decade career as an intelligence officer.”
So the magic sky fairy told you Huawei spy for the Chinese? That is not a considered view anywhere in the world except the good ol' god fearin' US of A. Fuck Yeah!
"Does Huawei represent an unambiguous national security threat to the US and Australia?" General Hayden replied "Yes, I believe it does."
Paraphrasing, Hayden is joking that, "Huawei is occassionally as serious a security threat as US telecom companies".
And I say *joking* because he doesn't say the spying is the "total capture" variety that the NSA goes for with the aid of US telecom companies.
Clearly if Huawei is an unambigious national security threat to foreign countries like the USA, then US telecom companies are an unambiguous threat to the national security of Australia, the UK, Canada and the rest of the world.
Remember that the few limitations US law has on spying apply only to US persons -- they do not apply to Australian, British, Canadian or others.
The US, its laws and its people consider inalienable human rights apply only to people in the USA and to US citizens elsewhere. The rest of us don't count as human to them.
that is so far off side it is not funny, but it is a joke. Microsoft, Google, Facebook, Yahoo, and the list goes on and on, aid in spying on world-plus-dog (admittedly) for US Government and yet the beyond-stupid American government just cannot keep it's mouth shut. No wonder Detroit is bankrupt, the country is run by idiots! Personally I would like to see the US and China put behind a Great-Wall-Of-Canada, oh wait Nortel is gone so it would behind a Designed in US, Programmed in India, Manufactured in China, Great-Wall-Of-Uselessness riddled with back doors.
The Canadian government f-d up big time letting Nortel slide into oblivion!
Detroit should have been razed and rebuilt as a livable city 25 years ago. They went bankrupt because they were trying to be a major city and a center of culture but were effectively just barracks for auto workers. There was no other possible outcome.
Nortel killed themselves. Besides do you really think the Canadians are above built in back doors?
"at a minimum, Huawei would have shared with the Chinese state intimate and extensive knowledge of the foreign telecommunications systems it is involved with. I think that goes without saying."
"... This was my considered view, based on a four-decade career as an intelligence officer.”
The above comment suggests that he knows nothing we do not and is contributing nothing new to the debate. Maybe his knowledge of the extensive backdoor and Trojans installed by US manufacturers to facilitate NSA snooping make it impossible for him to trust vendors from other countries. Particularly if they cannot twist the arms of the vendors to facilitate their activities.
For any thinking person this just reek of protectionism and nothing else. The Chinese needs to ban kits from Cisco and other US manufacturers for the same reason and see how this pans out.
For any thinking person this just reek of protectionism and nothing else. The Chinese needs to ban kits from Cisco and other US manufacturers for the same reason and see how this pans out.
China, along with every other nation on earth, now has grounds "to ban kits from Cisco and other US manufacturers for the same reason." They actually are spying for a foreign regime, even by their own admission. Meanwhile the allegations against Huawei remain (still apparently baseless) allegations. Shouldn't the US have managed to find some shred of evidence by now? It doesn't seem that hard to prove these things when the evidence is there!
Perhaps it's time for the US to rethink its FUD campaign against Huawei?
All large scale Chinese business is ultimately managed by the government. Similar can be said of most large scale Western business as well, to a somewhat lesser degree.
It doesn't matter how big or powerful you are or what country you are based in; when you start moving billions of dollars around you're going to be tied up with government and to some degree the military. There's no option if you want to keep doing business.
Refusal to comply has a way of ending contracts and even private investment and is probably the most effective way to get tax laws changed (not in your favor).
to hear a former spymaster for a regime that demonstrably snoops on everyone and everybody, both inside and outside the country, point the finger at someone else and claim that they are (gasp !) spying. Thief crying «Stop thief !» ?...
Huawei's response to these rather vague accusations by Mr Hayden, who perhaps not so incidentally currently sits on the Board of Directors of Motorola Solutions, is the following :
«This is tired nonsense we've been hearing for years, trotted out anew as a flimsy bright and shiny object to distract attention from the very real compromising of global networks and information that has been exposed in recent weeks. Misdirecting and slandering Huawei may feel okay because the company is Chinese-based - no harm, no foul, right? Wrong. Huawei is a world-proven multinational across 150 global markets that supports scores and scores of American livelihoods, and thousands more, indirectly, through $6 billion a year in procurements from American suppliers. Someone says they got some proof of some sort of threat? Okay. Then put up. Or shut up. Lacking proof in terms of the former, which seems clearly the case, this is politically-inspired and racist corporate defamation, nothing more.»
I can only agree....
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