The Huawei Dilemma Resistance to Chinese Mobile Provider Grows Among Conservatives
In Germany, the debate is growing in conservative political circles as to whether it should prohibit Chinese network equipment provider Huawei from helping to build the country's 5G network. But at the moment, Berlin doesn't really have any other choice.
When Germany's economics minister traveled to Shanghai in mid-June, he had more than just a visit with his Chinese counterpart on the agenda. An appointment he originally intended to keep secret was of equal importance.
At the urging of Chinese telecommunications giant Huawei, Peter Altmaier of the conservative Christian Democratic Union (CDU) party met company CEO Ren Zhengfei for breakfast in a luxury hotel. In other words, a man whose life work is considered by United States President Donald Trump to be a threat to national security. The Chinese company also presents an economic threat to the U.S., given that Huawei recently surpassed Apple in global smartphone sales.
A Message to Washington
Ultimately, the German guest decided not to keep the meeting secret and instead spoke out about it afterward. The economics minister said it had been a matter-of-fact discussion and that the CEO had expressed awareness of concerns about Huawei. Altmaier justified the meeting by noting that of course a company with such a large presence in Germany would have access to the government minister responsible for the industry.
The meeting also sent a message to Washington: Look, it said, Germany isn't bowing to pressure from the White House. Or to the threat of blacklisting the Chinese. Or to the warning that the U.S. could restrict its cooperation with German intelligence agencies if Berlin doesn't exclude Huawei from participating in the construction of the planned 5G mobile network in Germany.
In China, Altmaier maintained the current German government line for dealing with Huawei -- Berlin has decided not to ban the controversial telecoms equipment manufacturer from the German market. Instead, experts with several government authorities are currently formulating stricter security requirements that will apply to all network suppliers. They are scheduled to be presented this summer, as time is pressing. The government has promised to make Germany a leading market for 5G, and it recently sold the necessary frequencies in a 6.55 billion-euro ($7.31 billion) auction.
But unease with Germany's approach to the Chinese company isn't only raising concern in Washington -- there has also been vocal criticism within the country's own conservative party, the CDU and its Bavarian sister party, the Christian Social Union (CSU).
Christoph Bernstiel, a member of the federal parliament, for example, recently returned from a trip to Japan during which he visited the telecommunications provider NTT. Japan is one of the countries that, owing to security concerns, wants to exclude Huawei from helping to build 5G networks. "If Japan wants to get by largely without Huawei, then we should be able to as well," says the domestic policy expert who is also a member of Merkel's CDU. Together with other colleagues, he has openly questioned the government's position.
A Lack of Digital Autonomy
Shortly before the summer legislative recess, around a dozen members of the CDU and CSU met for a discreet meeting in parliament. The politicians were united in their concerns about network security and Germany's autonomy in the digital age. The group agreed that they would address their concerns with the government ministers responsible for the issue.
Skeptics within the conservative parties worry about more than just the possibility that the Chinese could use the new networks to spy on the country. More serious is the danger that they could manipulate the digital infrastructure or somehow bring it down remotely. "Based on what I know now, I would exclude Huawei from building future networks, even if that meant it would be more expensive and take longer," says Bernstiel. Germany needs "more digital autonomy," he says.
Patrick Sensburg, a CDU member of the Parliamentary Oversight Panel, which serves as a parliamentary watchdog over Germany's intelligence services, says: "I don't trust Chinese or American suppliers," because telecommunications companies in both countries would have to cooperate closely with their national security authorities. Sensburg previously served as the chair of the parliamentary inquiry committee that probed American spying on Germany after the revelations that were brought public by whistleblower Edward Snowden. "At the very least," Sensburg says, "the safety requirements for all manufacturers who want to help build the 5G network in Germany must be as strict as possible." He argues the authorities also need to be able to "review in very granular detail" whether the companies are adhering to these rules. "My preference would be to have a German provider," says Sensburg.
Fellow parliamentarian Bernstiel concurs that political action urgently needs to be taken against the current dependency. "We should start developing a European cellular network consortium as soon as possible, just as we did with Airbus in the strategically important field of aviation at the time," he says.
Norbert Röttgen, the CDU chair of the Committee on Foreign Affairs in parliament, agrees. "It would be best if the capabilities to set up the mobile network were based in Europe. That would be more expensive, but it would make Germany and the EU less vulnerable."
Non-Chinese Alternatives Are Rate
The fact of the matter, though, is that the path Germany has chosen for dealing with Huawei has more to do with pragmatic reasons than ideological ones. All three major network operators in Germany have been using Huawei technologies for years. The company is regarded as the technology leader for important components in the 5G generation of cellular transmission technology. Non-Chinese alternatives are rare: They include Ericsson of Sweden, Nokia of Finland and Samsung of South Korea.
As president of the Federal Office for Information Security in Bonn, Arne Schönbohm is the German government official responsible for assessing the security of the network transmitters. He played a key role in determining the government's position on Huawei. He considers the risk "manageable" and says that all providers will have to meet the same security requirements. Anyone failing to do so, he says, faces getting banned from the market. (Read the accompanying interview with Schönbohm here.)
But the debate extends beyond cell towers. At issue is the degree of autonomy Germany is going to have with future technologies. In addition to technology for mobile phone networks, the industry association Bitkom recently warned that Germany has a strong dependency on foreign providers of cloud-based data storage, a market dominated by U.S. providers such as Amazon, Google and Microsoft.
The question of security is also being discussed in the Chancellery, where chief of staff Helge Braun of Angela Merkel's CDU considers the current compromise to be viable. Neither does he see any alternative. "The 5G standard will not only require all data and calls to be encrypted, but also the associated connection data," he says. The aim is to create a standard that has strong security and protects privacy. "That's why the federal government amended the Telecommunications Act to ensure that the requirements placed on companies that equip (5G networks) are also greatly tightened."
Huawei itself has always denied allegations of espionage or that it assists Chinese intelligence services in any way. Instead, the company emphasizes its importance as a business with operations in Germany, and it even commissioned the economics institute DIW Berlin to conduct a study on its behalf.
According to the paper, between 2008 and 2018, Huawei's German subsidiaries saw revenues increase by an average of 26 percent annually to 2.7 billion euros last year. It states that Huawei has 2,550 employees in Germany and 28,000 workers who indirectly profit from the company's operations in the country. In addition, it says the company's cooperation with diverse institutes and companies is helping to strengthen Germany as a bastion of innovation and push the country forward in terms of digitalization.
The paper also provides fodder for the case Huawei is making to the German government -- namely that the absence would be felt painfully if Huawei were no longer present in Germany.
Experiences in Australia and the U.S. have already shown that the company and the Chinese state do not shy away from showing their teeth if charm offensives fail. When the Australian government excluded Huawei from helping to build its 5G networks, waiting times for Australian coal imports in Chinese ports suddenly doubled. And Huawei now plans to cut jobs at the U.S. offices of its subsidiary Futurewei Technologies, a response to the White House's decision to issue an executive order barring American companies from using Huawei technology.
'Working Hand in Hand With the Chinese Government'
As such, Trump administration officials are likely to view skepticism toward Huawei by some members of Merkel's conservatives as a positive development. Only days ago, U.S. State Department cyber expert Rob Strayer stressed that China's technology companies were "working hand in hand with the Chinese government to suppress freedom of expression and human rights."
James Lewis of the think tank CSIS, a prominent cyber expert in Washington, D.C., also lends credence to the critics' case. "Here you have a country with pervasive domestic surveillance, a decades-old massive global espionage campaign, and more than a million people in re-education camps because of their religion," he said. "And you ask if you should trust them?" Lewis says China could use the equipment installed by Huawei to coerce by interrupting network service. "Think of having every third call drop or fail completely."
Within the German government, there is also considerable desire for greater autonomy and independence, but that doesn't appear very realistic when it comes to 5G technology.
"This train left the station long ago in Germany," said Torsten Gerpott, a professor of technology planning and 5G expert at the Mercator School of Management at the University of Duisburg-Essen. The network infrastructure is "a global market business in which suppliers can only survive and thrive if they are of a critical size." Gerpott believes a "trans-Atlantic consortium could have very good prospects" of working together on technology for the following generation of cellular network technology: 6G.