As the new Biden administration formulates its China diplomacy and trade policy, telecom equipment giant Huawei hopes for more favorable treatment than it received during the Trump years.
By many accounts, the odds are long for Huawei of any significant shifts in the U.S. government’s treatment of the Shenzhen, China-based company. But a U.S.-based Huawei executive told Fierce Electronics in an interview on Thursday that the company is hopeful for some openings, at least around the edges.
“We are starting to see discussions about the China situation and hope that will positively impact Huawei, but there’s no clear direction at this time from the Biden administration,” said Tim Danks, vice president of partner relations for Huawei in the U.S.
“It’s a big question mark how we will be treated,” he said. “We’re a global company with a significant number of employees in all the nations in which we operate and we have gotten lumped in with other issues in China.”
“We would like to have engagement and understanding that would benefit both countries,” he added. “Huawei brings the U.S. jobs and with unemployment as it stands in the U.S., every job is important.” Huawei employs hundreds of workers in the U.S. out of a total of 190,000 employees based in 170 countries.
As Huawei has noted in the past, many U.S. tech companies, including chip giant Intel, have sold their goods to Huawei to be embedded in radio equipment and a wide range of electronics. But Huawei continues to be placed on an entity list that bans U.S. firms from selling to Huawei, mainly out of security and privacy concerns. That policy started under the Trump administration in May 2019. Some U.S. firms were able to get special licenses to avoid the restriction, but a few found the licenses revoked later on. The most notable exclusion is Google Android on Huawei phones.
In 2019, U.S. companies earned $18 billion in revenues from goods and services sold to Huawei, Danks noted. “A lot of that is in jeopardy now,” Danks said. “Restrictions of this kind haven’t benefited the cause of cybersecurity and have negatively impacted U.S. companies.”
An August order by the Trump Commerce Department extended some earlier restrictions on U.S. companies that added 38 Huawei affiliates in 21 countries to the entity list. Huawei hopes to see that order rolled back, Danks said. Semiconductor trade groups have also objected publicly.
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“We understand Biden’s priority is the pandemic, but as we get deeper into the [trade] issues, we’re hopeful to see changes,” Danks added. “We’re very interested in having that dialog.”
So far there has been no dialog, he said, but it is still early days in the Biden administration. The U.S. Senate Finance Committee only started its confirmation hearing of U.S. Trade Representative-designate Katherine Tai on Thursday. Her confirmation is expected by the full Senate.
“The U.S. government has not engaged with us on any level despite our outreach…We are willing and want to engage in that dialog,” Danks said.
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Major security concerns
The concerns of the Trump administration mainly centered around worries that Huawei telecom gear installed in the U.S. could be hacked by the Chinese government through an easily accessible backdoor, exposing private data of U.S. telecom customers. Private U.S.-based telecom and security experts including Roger Entner of Recon Associates have described the backdoor access as a relatively simple hack.
But Huawei has consistently denied it has granted any access to the Chinese government and insists that Chinese law requiring Chinese government access to Huawei servers and computers does not apply to strict privacy laws in countries like the U.S. where Huawei gear is installed. And, it has noted that Huawei is an independent company, separate from the Chinese Communist Party.
Danks argued that the security of its network gear lies mainly in the hands of the carriers that use it and called for widespread standards to protect systems and data. “SolarWinds was totally hacked, and it was a trusted supplier,” Danks noted.
Texas-based SolarWinds is a networking software company that sold its Orion product to U.S. government agencies, Microsoft and others for centralized monitoring of their IT operations. Attackers compromised the SolarWinds software in early 2020, which gave them access to client systems where Orion was installed, potentially exposing massive amounts of private and confidential data, the extent of which is still being discovered. “SolarWinds was a trusted supplier but was it really trustworthy?” Danks said.
Huawei supports standards for security and privacy that are applicable to different industries and will protect critical infrastructure no matter where it is, Danks said. “The country of origin approach to security is something of the past,” he added. “Even though you might have a long-term relationship with a particular company, they also have relationships with third-party companies” that could introduce security vulnerabilities or pose outright hacking risks.
The General Data Protection Regulation used in the EU makes a company accountable for vulnerabilities even if it is a third party, which protects the entire networking infrastructure, he said. “That’s the approach needed for the U.S.,” he said.
Efforts by the U.S. and other governments to fund the “rip and replace” of Huawei gear are also based on “some level of misunderstanding of these networks,” Danks said. “Huawei has been in the U.S. for over 20 years now and we’ve never had a single security incident.” At one point, Huawei had 30,000 pieces of network gear in various U.S. companies.
“It took years to build those networks and will take years to swap out, especially since Huawei has competitive pricing,” he added.
The central defense Huawei has made against U.S. government crackdowns such as the entity listing remains the same as it has for years, Danks added: “We would never compromise the trust of our customers, and we comply with the laws in the countries where we operate.”
Concerns of human rights violations in China
Huawei also hopes it will not be “lumped in” with over human rights violations in the communist country, such as repression of Moslem Uighers living in detention camps in the northwest.
“Certainly we’ve come out with a public statement against the Uigher issues and we don’t condone discrimination against any people,” Danks said. “We would like to see technology used for good and technology for all.” Some reports have said Huawei facial recognition technology can be used to identify people of Uigher origin in crowds, but Huawei has said it strongly discourages using its technology in that manner and is investigating the issue, Danks added.
It isn’t clear at all whether human rights abuses against Uighers and protesters in Hong Kong or surveillance of its citizens and internet blocking in China cast a pall over Huawei’s treatment by the U.S. in trade and diplomacy.
Recent comments from Biden, Schumer on China
However, President Biden did offer a glimpse into his views on such matters during remarks at the Wednesday signing of a executive order on supply chain resiliency. While he did not name China directly, he said the shortage of masks used by doctors and nurses at the outset of the pandemic “should never have happened and this will not happen again in the U.S…We shouldn’t have to rely on a foreign country –especially one that doesn’t share our interests or our values—in order to protect and provide our people during a national emergency.”
Among other U.S. leaders there is a clear drive to compete against China in research and production on various fronts, including manufacturing of vital semiconductors. In one example, U.S. Senate Majority Leader Chuck Schumer on Wednesday said he has directed Senate committees to draft a legislative package to “outcompete China and create new American jobs…It will take the key critical industries and make American investment so we will outcompete China in all of them...We will also talk about the buildout of 5G and how America can remain number one there.”
When asked to assess Huawei’s chances against such attitudes, Danks reiterated, “We’re hoping to separate the Huawei situation from the trade war and the greater China issues. We’re willing to engage with the U.S. and would love to.”