{"id":38175,"date":"2018-03-28T14:30:51","date_gmt":"2018-03-28T03:30:51","guid":{"rendered":"https:\/\/www.aspistrategist.ru\/?p=38175"},"modified":"2018-04-03T15:12:45","modified_gmt":"2018-04-03T05:12:45","slug":"much-ado-huawei-part-2","status":"publish","type":"post","link":"https:\/\/www.aspistrategist.ru\/much-ado-huawei-part-2\/","title":{"rendered":"Much ado about Huawei (part 2)"},"content":{"rendered":"

\u00a0<\/strong><\/p>\n

While Huawei itself<\/a>, as well as its activities in Australia and worldwide, merit detailed scrutiny, the system and conditions within which it operates constitute a deeper source of concern. At present, the Chinese Communist Party (CCP) is openly seeking deeper \u2018fusion\u2019 between the party\u2013state apparatus and business enterprises in ways that raise questions about the extent to which Huawei (regardless of a reported reshuffling<\/a> of its board)\u2014or indeed for any Chinese company\u2014can operate with true independence.<\/p>\n

Beyond the fact that Beijing\u2019s commitment to true rule of law remains questionable, there are, in fact, new legal frameworks that could mandate that Huawei and other enterprises support Chinese intelligence activities. Consequently, the current concerns about Huawei should be only the start of closer consideration of the implications of these trends.<\/p>\n

At a time when Huawei is actively pursuing commercial opportunities and collaborations worldwide, any deliberate introduction of vulnerabilities into its products or networks would clearly contradict its own corporate interests. However, it\u2019s clear that Huawei\u2019s global expansion, in and of itself, can serve as a vector for Beijing\u2019s influence<\/a>.<\/p>\n

Concurrently, the CCP\u2019s potential ability to exploit Huawei\u2019s reach\u2014with or without the company\u2019s complicity or foreknowledge\u2014must be recognised as a risk inherent in the nature of the Chinese party\u2013state, which has become ever more apparent under Xi Jinping.<\/p>\n

It\u2019s evident that the CCP is appreciably deepening its influence over China\u2019s rising private sector. In recent years, just about every major Chinese tech company\u2014including Baidu, Alibaba, Tencent, iFlytek, Xiaomi and Sina, among many others<\/a>\u2014has established<\/a> a party branch or committee.<\/p>\n

Huawei is not unique in this regard, and those party committees (\u515a\u59d4) can operate without transparency regarding the extent to which the CCP may exercise influence over the company\u2019s direction and decision-making.<\/p>\n

Huawei\u2019s own party committee has tried to keep a low profile. Notionally, its role is limited to issues of ethics and personnel, Reportedly, as of 2007, Huawei\u2019s party committee managed<\/a> 56 general branches (\u603b\u652f), controlled 300 party branches (\u515a\u652f\u90e8) and had over 12,000 members.<\/p>\n

Huawei\u2019s current Party Secretary is Zhou Daiqi<\/a> (\u5468\u4ee3\u742a), who has served<\/a> simultaneously as Chief Ethics & Compliance Officer and Director of the Corporate Committee of Ethics and Compliance. However, Zhou Daiqi often seems to represent Huawei in his official capacity as Party Secretary (\u515a\u59d4\u4e66\u8bb0) and senior vice president) for high-level talks<\/a> and occasions, such as the signing<\/a> of a strategic cooperation agreement with a municipal government on the creation of a cloud computing data centre.<\/p>\n

As it attempts to exercise greater control and influence over China\u2019s dynamic tech sector, the party has sought to co-opt and integrate leaders from this field. At the \u2018two sessions\u2019 of the National People\u2019s Congress and the Chinese People\u2019s Political Consultative Conference, delegates included<\/a> Tencent\u2019s Pony Ma, Xiaomi\u2019s Lei Jun, Baidu\u2019s Robin Li, JD\u2019s Richard Liu, Qihoo\u2019s Zhou Hongyi and many more.<\/p>\n

At the time, Sogou CEO Wang Xiaochuan declared (translation<\/a> via Twitter):<\/p>\n

We\u2019re entering an era in which we\u2019ll be fused together. It might be that there will be a request to establish a (Communist) Party committee within your company, or that you should let state investors take a stake\u2026as a form of mixed ownership. If you think clearly about this, you can really resonate together with the state. You can receive massive support. But if it\u2019s your nature to go your own way, to think that your interests differ from what the state is advocating, then you\u2019ll probably find that things are painful, more painful than in the past.<\/p><\/blockquote>\n

Under these conditions\u2014and in Xi Jinping\u2019s China\u2014it\u2019s worth raising the question of whether any Chinese company has adequate freedom to \u2018go its own way,\u2019 particularly on issues that are sensitive or strategic. In the absence of true rule of<\/em> law, even those companies that may wish to resist impositions by the state on their commercial interests have fewer avenues through which to do so.<\/p>\n

Meanwhile, there\u2019s also a new legal basis that the Chinese government could use to mandate Huawei\u2019s compliance with state security interests that may be contrary to corporate imperatives. Notably, in China\u2019s National Intelligence Law (\u56fd\u5bb6\u60c5\u62a5\u6cd5), released in June 2017, Article 7 declares<\/a>:<\/p>\n

All organizations and citizens shall, in accordance with the law, support, cooperate with, and collaborate in national intelligence work, and guard the secrecy of national intelligence work they are aware of. The state will protect individuals and organizations that support, cooperate with, and collaborate in national intelligence work.<\/p><\/blockquote>\n

Similarly, Article 12 highlights that national intelligence agencies may \u2018establish cooperative relationships with relevant individuals and organizations, and entrust them to undertake relevant work\u2019.<\/p>\n

At the same time, the law itself is ambiguous as to the scope and bounds of what \u2018intelligence work\u2019 may entail<\/a>. Pursuant to this framework, there appears to be a direct obligation on the part of Huawei\u2014or any other Chinese company or citizen for that matter\u2014to assist the activities of Chinese state intelligence services.<\/p>\n

Ultimately, the \u2018much ado\u2019 about Huawei is arguably justified, not so much because Huawei is Huawei but rather because of nature of the CCP and the framework for Chinese intelligence operations. In this regard, the anxieties and uncertainties about Huawei are similarly applicable to any Chinese company operating with this system, absent rule of law and without full transparency.<\/p>\n

Going forward, the trend towards fuller fusion between the party\u2013state apparatus and commercial enterprises\u2014and the ways in which that fusion might be leveraged to support intelligence work\u2014should be taken into account in business<\/a> and governmental assessments of risk. These dynamics rightly provoke concern in the case of Huawei but must also be taken into account in assessing the activities of other Chinese companies operating worldwide.<\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a0 While Huawei itself, as well as its activities in Australia and worldwide, merit detailed scrutiny, the system and conditions within which it operates constitute a deeper source of concern. At present, the Chinese Communist …<\/p>\n","protected":false},"author":772,"featured_media":38184,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"footnotes":""},"categories":[1],"tags":[52],"class_list":["post-38175","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-china"],"acf":[],"yoast_head":"\nMuch ado about Huawei (part 2) | The Strategist<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.aspistrategist.ru\/much-ado-huawei-part-2\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Much ado about Huawei (part 2) | The Strategist\" \/>\n<meta property=\"og:description\" content=\"\u00a0 While Huawei itself, as well as its activities in Australia and worldwide, merit detailed scrutiny, the system and conditions within which it operates constitute a deeper source of concern. 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