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Under pressure from U.S. and China, U.K. faces dilemma on Huawei

Senior U.S. delegation gave Boris Johnson's government a warning about the risks of allowing Chinese firm to build its 5G technology.
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The United Kingdom’s relationship with the United States is facing another stern test over whether to allow the Chinese telecoms giant Huawei, which the U.S. and others accuse of being a security threat, to manage the roll-out of new broadband technology.

A meeting in London between senior U.S. and British officials this week came at an awkward time for the U.K. as it prepares to leave the European Union, the world’s largest economic bloc, at the end of the month.

Prime Minister Boris Johnson’s government plans to carve out its own trade relationships as an independent nation, with both the U.S. and China set to be key targets for trade deals.

On Monday, a senior U.S. delegation gave Johnson’s government a warning about the risks of allowing Huawei to build its 5G technology, arguing that doing so could compromise the two nations’ close intelligence-sharing relationship. The U.K. has yet to make a final decision, but an announcement is expected soon.

While details of the meeting were not released by either government, a senior Trump administration official said the U.S. team was in London to “share information about the risks of using Chinese vendors in 5G networks.”

Prime Minister Boris Johnson’s government plans to carve out its own trade relationships as an independent nation, with both the U.S. and China.Ben Stanstall / AFP - Getty Images

Washington has long considered Huawei a threat, fearing that its access to vast amounts of personal data could be used for espionage, and President Donald Trump signed an executive order last May effectively banning it from operating in the U.S.

Matt Pottinger, the U.S. deputy national security adviser, was at the London gathering, along with Rob Blair, an assistant to the president and special representative for international telecommunications policy; and Chris Ford, acting undersecretary of state, the administration official said.

The American team handed over a dossier outlining the risks of using Huawei and the threat to the U.S.-U.K. intelligence sharing relationship, according to multiple press reports. Both countries are members of the Five Eyes intelligence alliance, along with Canada, New Zealand and Australia. Australia and New Zealand have also ruled out using Huawei to build 5G infrastructure.

According to reports in British news outlets, including The Guardian, The Times, Sky News and the Financial Times, the U.S. dossier argued that it would be “nothing short of madness” for the U.K. to proceed with Huawei as the key contractor on 5G.

Huawei dismissed allegations that it could undermine the U.K.’s national security as “unsubstantiated.”

BT Drops Huawei Phones for Britain's First 5G Network
A map showing the rollout points for BT Group Plc's EE 5G network sits on display following a news conference in London on May 22, 2019.Chris Ratcliffe / Bloomberg via Getty Images file

Stephanie Hare, a British academic and technology expert, said China was making its approach “very clear.”

“If you ban us, we’ll punish you on trade and investment,” she said. “And the U.K. desperately wants to keep China onside because of Brexit. It needs to be making greater deals.”

“At the same time, it also wants a trade deal with the U.S. and it could go to the back of the queue, as Barack Obama famously said, or it could be put front and center,” she added, referring to the former president’s criticism of the Brexit campaign.

5G, or fifth-generation telecom systems that improve on existing 4G connections, will allow internet-connected devices to operate much faster and communicate with other devices more efficiently, potentially opening up opportunities for more automation at home, in the workplace, in retail and in transportation.

Huawei already provides all four of the U.K.’s cellular networks with limited 5G technology, but the company doesn’t yet have access to the core national infrastructure, where customers’ personal details are held.

Some British analysts agree that there are real dangers to Chinese companies being involved in key information infrastructure projects.

“Whatever Huawei says about its ownership is entirely irrelevant,” said Charles Parton, a China expert at the Royal United Services Institute, a London think tank.

“The point is no Chinese company is going to turn down a request from the Chinese government to do something. It’s just not going to happen whatever the Huawei publicity machine says,” he said. “By taking on Huawei you’re putting your faith in the benevolence of the Chinese Communist Party for the next 20 years, because there are going to be many, many upgrades and so on.”

Inside the MWC Shanghai Exhibition
Attendees walk past the Huawei Technologies Co. booth at the MWC Shanghai exhibition in Shanghai, China in June. Qilai Shen / Bloomberg via Getty Images file

While the U.K. has made no final decision on Huawei — which has been involved in the country’s telecoms systems since 2005 — Johnson told BBC News on Wednesday that anyone who disagrees with the company having such a role should come up with an alternative.

“The British public deserve to have access to the best possible technology,” he said. “We want to put in gigabit broadband for everybody. If people oppose one brand or another they have to tell us what is the alternative.”

However, he added, in a reference to U.S. concerns, that he wouldn’t “prejudice our national security or our ability to cooperate with Five Eyes intelligence partners.”

Another senior Trump administration official told NBC News it was a “positive sign” that Johnson was open to alternatives and admitted that the U.K. has a “different philosophy” on the issue than the U.S.

The economic incentive behind 5G is huge. A report released in December by Oxford Economics, a British analysis firm, predicted that the U.K. economy could miss out on up to 11.8 billion pounds ($2.4 billion) by 2035 if it restricts the growth of 5G.

And there is a strong feeling in some parts of the British establishment that the U.S. warnings are overblown and the cost of ditching Huawei would be too high.

Inside Huawei's Headquarters As Company Seeks $1 Billion Funding
An employee walks past a signage for the 5G Park at the Huawei Technologies Co. headquarters in Shenzhen, China.Qilai Shen / Bloomberg via Getty Images file

Andrew Parker, head of the secretive British domestic security agency MI5, told the Financial Times on Monday that he had “no reason today to think” that the U.K. would damage its intelligence relationship with the U.S. if it chooses Huawei.

In any case, if the U.S. fails to convince the U.K. of the risks of working with Huawei, it will be faced with trying to change London’s mind, argues Hare.

“Boris Johnson knows what the alternatives are, he’s had them presented to him. What he’s really saying is that it will cost the UK billions to remove Huawei and it will probably get hit by some sort of retaliation,” she said. “What he’s really saying, the real alternative, is ‘show us the money.’”

Victor Zhang, vice president of Huawei, said in a statement: “Huawei has worked with the U.K.’s telecoms companies for 15 years and looks forward to supplying the best technologies that help companies like BT and Vodafone fulfil the government’s commitment to make gigabit broadband available to all.”

BT and Vodafone are large British telecommunications companies.

“We are confident that the U.K. government will make a decision based upon evidence, as opposed to unsubstantiated allegations,” he said.