Wednesday 19 June 2019

Saturday Insight: Why Huawei arrest caused a sensation

 

International attention: Members of the media outside the BC Supreme Court bail hearing of Huawei CFO Meng Wanzhou yesterday, who was held on an extradition warrant in Vancouver Photo: Reuters
International attention: Members of the media outside the BC Supreme Court bail hearing of Huawei CFO Meng Wanzhou yesterday, who was held on an extradition warrant in Vancouver Photo: Reuters
Meng Wanzhou, Huawei Technologies' chief financial officer
Gavin McLoughlin

Gavin McLoughlin

The high profile arrest in Canada of Meng Wanzhou, Huawei Technologies' chief financial officer and daughter of the founder of the Chinese telecom's giant, rocked markets this week.

The arrest at the request of the US - reportedly for alleged violations of US sanctions against Iran - caused outrage in China, which called for her immediate release.

In much of the world, the case has focused debate on Huawei and whether its links to the Chinese government and role in potentially sensitive data and communications flows poses a security threat.

In the UK BT pulled Huawei equipment from the core of a British mobile network this week, while the US, Australia and New Zealand, whose national security services share intelligence, have banned Huawei from providing 5G equipment. The head of Britain's MI6 said this week the UK must decide whether to follow suit.

There are no restrictions in Ireland and neither the Department of Communications nor ComReg, the regulator, would comment on whether they have concerns.

Huawei is active here. It is working with Eir on rolling out a mobile network, providing equipment designed to provide the link between phones and the so-called core network, which is being provided by Ericsson.

Siro - owned by ESB and Vodafone - also signed a deal with Huawei to work on a fibre broadband project.

Eir told the Irish Independent that the security of its network is "paramount" but it has no concerns about working with Huawei. "We would not have selected Huawei if we believed there was any risk for our customers," a spokesman said.

Siro declined to comment.

Meanwhile, Meng Wanzhou's arrest has big implications, coming at a sensitive time in US-China trade talks. Huawei is one of China's most iconic brands and the key to President Xi Jinping's plans to dominate new technologies such as 5G networks.

"The detention of Huawei's CFO is not an accidental incident and will cast a shadow over the trade talks, but both sides will work hard to avert that bad influence," said Wei Jianguo, former vice minister of commerce and now a vice chairman of the China Centre for International Economic Exchanges.

"The negotiation between Chinese and US working groups is going smoothly, and actually much better than people outside expected."

On the other hand, bureaucrats who were more involved with national security view things differently. In their eyes, Xi caved too much and ended up looking weak to the public. The Huawei arrest was just another tactic by the US to gain even more leverage, they say, and China should fight back with measures that hurt American companies.

One official mentioned being personally angry because Huawei is a point of national pride for the Chinese people, and keeping the issue separate from trade talks with the US would be difficult even if top leaders wanted to.

Chinese officials have reason to worry about a public backlash. In the 1990s, Premier Zhu Rongji was criticised by an increasingly nationalist public after returning empty handed from trade talks with the Clinton administration.

Publicly, at least, China is keeping the issues separate.

It's unclear if China will take a more fervent stance now that Xi has arrived back in Beijing.

For several days after his meeting with Trump, the bureaucracy was stuck waiting for him to return, uncertain of what exactly was decided during his meeting with Mr Trump at the G20 in Argentina.

Irish Independent

Also in Business