Huawei: Why are western governments worried about China's technology powerhouse?

Tensions escalate as Germany seeks ways to exclude Chinese firm from 5G networks and Oxford University suspends research grants

Espionage fears surrounding Huawei deepened this week as a growing number of companies, governments and academic institutions call into question the technology firm’s close links to the Chinese state.

Oxford University suspended research grants from Huawei while German Chancellor Angela Merkel's administration is looking at ways to exclude Huawei from the country's 5G networks.

UK Defence Secretary Gavin Williamson has said he has “very deep concerns” about the Chinese company's involvement in super-fast mobile infrastructure.

The company denies that its network technology is used for spying by Beijing but its public statements have done little to quell fears.

What are the accusations against Huawei?

A number of governments have suspicions that Huawei, the biggest supplier of mobile network technology in the world, may be involved in espionage for the Chinese government.

The US has been by far the most strident of any nation in its criticism. According to FBI Director Christopher Wray, Huawei’s smartphones can be used to “maliciously modify or steal information,” and “conduct undetected espionage”. However, no hard evidence of this has so far entered the public domain.

In August, Donald Trump banned US government officials from using Huawei devices and those made by another Chinese company, ZTE.

Australia, New Zealand, Canada, Germany and the UK are among countries to have since reviewed their own ties to Huawei but have not made specific allegations against the company.

Is Huawei operating a global spying network?

Huawei’s key role in building the “plumbing” of global communications networks is potentially of far greater concern than its smartphones.

Huawei is a leading supplier of the equipment that underpins the fifth generation of mobile network that is soon to be rolled out around the world. 5G is 100 times faster than current 4G and will billions more devices from cars to gadgets to traffic lights to connect and share data.

This will give a boost to the global economy but securities services are concerned that the network could also act as a vast spying tool for those who might wish to exploit it.

Alex Younger, the head of MI6 said last month the government would have to make “some decisions” about foreign technology firms’ involvement in the UK’s 5G infrastructure.

Why has this become an issue now?

Tensions have escalated significantly in recent weeks after the arrest of Huawei finance chief Meng Wanzhou in Canada at the behest of the US government, sparking an unprecedented diplomatic row between Beijing and Washington.

Ms Meng, the daughter of Huawei founder Ren Zhengfei, is said to be known internally as “the princess” and her arrest provoked anger in China.

Meng Wanzhou, chief financial officer at Chinese technology giant Huawei, was arrested on suspicion of fraud charges (Reuters)

In response China re-sentenced a Canadian serving 15 years for drug smuggling to death and detained two other Canadian nationals - a move that did little to support HUawei's assertion that it is not a tool of the state.

But these are merely the latest chapters in a long-running story. Fears of spying can be traced all the way back to 1987 when Huawei was founded by Mr Ren, a former officer in the People's Liberation Army who is said to have maintained close links to the military and senior Communist Party officials. He said this week that he had never been asked to share “improper information” by the Chinese government.

Huawei’s opaque ownership structure has provided additional fuel to these fears. Unusually for a firm turning over more than $90bn, Huawei is still privately owned. Ostensibly, employees hold most of the shares but there are suspicions that in fact Mr Ren controls a majority stake.

Broader geopolitical implications

The dispute goes far beyond national security and is another front in a battle between the US and China for global economic and political dominance that encompasses intellectual property, naval lanes and tariffs on billions of pounds worth of goods.

Donald Trump’s combative approach to international trade and diplomacy has led to an especially hostile approach to Huawei.

For Beijing’s part, it wants to develop China’s status as a technology powerhouse, overtaking the US as the pre-eminent innovator. Huawei is seen as a key player in achieving that goal.

Huawei last year surpassed Apple to become the world’s second-largest smartphone manufacturer behind Samsung, a milestone that will certainly not have gone unnoticed in the corridors of power at the White House.

Critics of the US say that it has attacked Huawei, not because it is a genuine security threat, but because it is a rival in a crucial sector of the world economy in which America has enjoyed unrivalled supremacy for decades; and that supremacy may be waning.