Huawei: A Global Force - High Tech Giant and Suspected Spy | DW Documentary
Another blow for Huawei with the arrest, in Canada, of its financial director. It has sent the markets haywire and re-ignited the trade war between Beijing and Washington. We ask the United States to explain the reasons behind the arrest of Meng Wanzhou and demand her immediate release. US officials also suspected Huawei of using its technology to help the Chinese government spy.
The criminal activity alleged in this indictment goes back at least 10 years and goes all the way to the top of the company. December 2018: the arrest of the daughter of the founder of Huawei in Vancouver, on the US's request, marked the start of hostilities against the company. The first act of a deep crisis with China. We are not going to do business with Huawei. We are not doing business. And I really made the decision. It’s much simpler not to do any business with Huawei.
The United States is fighting us with force and determination. We didn't expect them to hit so hard. How did it come to this? How did the Chinese telecom company Huawei find itself involved in a new technological and geopolitical war? We are now in an era where technology, artificial intelligence, quantum computing, telecommunication and cellphones are the commodities that are driving conflicts on a global scale.
The reason behind America's anxiety regarding Huawei is that its activity reaches much farther than telecommunications. He who dominates will undoubtedly dominate a large portion of tomorrow's economy. A 5G network, deep-sea cables, facial-recognition cameras, the cities of the future... Huawei is weaving a new technological web that covers the whole world. Huawei is something, it’s very dangerous. You look at what they’ve done from a security standpoint, from a military standpoint it’s very dangerous.
This is the story of Huawei: the symbol of Chinese success and the embodiment of the worst fears of the modern world. To assess the ambitions of the giant Huawei, we head to southern China, not far from the city of Shenzhen. This isn't a brand-new theme park, but the vast and majestic headquarters of Huawei, the outsized nature of which is only equaled by the brand's growing appetite. Having risen up a year ago, the complex spreads over a million and a half square meters, deep in the heart of the Guangdong hills. The
architecture may seem familiar to you. It's an assumed choice: the site is composed of 12 villages inspired by 12 different European cities. So this is Heidelberg from Germany and there we also have Bologna from Italy. You can see the Italian style very well. And that is Paris. The architecture is designed like a really famous university in France. The style
is very romantic and very open and beautiful. Ziwei and Yuhao, 23 and 27 years old respectively, are two young Huawei employees among the thousands that work here. The company holds its head up high with pride and ambition. But they can't ignore the tenacity of a special party-pooper now dousing Huawei with icy water to cool its ardors! Donald Trump and his accusations of espionage, picked up on by part of the West, are on everyone's minds here. Of course, I feel sad. For something that I have never done. We are
accused of things we haven't done. It’s unfair. It's in the news every day. Sometimes Donald Trump tweets something and everyone in the world knows about that. So of course, everyone talks about it, everyone has a feeling. Me as an employee of Huawei, I am just not happy about that.
Huawei is one of the great success stories of the 21st century. President Donald Trump outlawed US companies from doing businesses with the Chinese firm last week. About 3 billion people and over 170 countries use its products. It sells more, smarter than apple and a second only to Samsung. In just one week, this name has become synonymous with the trade war between the United States and China. Chinese telecom giant HUAWEI
is accused of espionage by Washington and threatened with losing access to American markets and technology. A few months ago, just pronouncing the company's name was a challenge. Since then, Huawei has made a name for itself. Firstly with its smartphones: 59 million sold across the globe in the first quarter of 2019 alone! It's fewer than Samsung, but more than Apple, with only 36 million cell phones sold — a first for the brand. Huawei is one of the biggest Chinese companies. Its growing exponentially over the last decade. In pretty much every part of telecommunications.
They are building phones, they are building wireless networks, they are building all sorts of components. They are one of four main suppliers of 5G technology which is going to be a revolutionary change. A new world punctuated by technology wars and devoured by geo- strategic tensions. At the heart of these new stakes is an announced revolution: an ultimate weapon developed by Huawei, the advent of which is tormenting the West: 5G technology.
5G promises to change our societies for ever: a new world of connected objects; unmatched power and speed of connections. The 5th generation of mobile communication is about to change our lives. For better or for worse. The stakes are incredibly high, and Huawei knows it: the Chinese company is the world leader and it's estimated that it has a two-year technological advantage over its rivals. A good portion of that R&D (research & development) has gone in 5G. The second factor is that we started doing it earlier than most other companies.
We started investing in 5G in 2009. The difference between 4G and 5G is as wide as between a Citroen and a Ferrari. From 2 to 3 to 4G, improvements were made every time. Mere improvements, if you like. Whereas 5G is a complete break; it involved brand new technologies. The Americans developed 3 then 4G and
sat on their laurels. They clearly didn't suspect that the Chinese had understood. They had lost the battles for 2, 3 and 4G and said: "OK, now we'll invest in 5G and gain the advantage." So what it is, is an industrial robot supported by a very stable, high speed, high quality, 5G wireless connection. So ordinarily these robots
would have cables, but these are wireless. What we provide is the network, that allows very high capacity in the transmission of data, very stable transmission of data which means there is no delay. And that work, that will support many thousands or even millions of connections. When you click on your smartphone today, you have what's known as "lag time". With 5G, that doesn't exist anymore: when you click, the page appears immediately. What does this revolution offer realistically?
Autonomous vehicles, at-distance medicine, the Internet of Things, online real-time gaming, virtual and augmented reality... So we're going to see whole sectors of the economy switching to this network. That's why the geopolitical stakes are so high: He who dominates will undoubtedly dominate a large portion of tomorrow's economy. An operator equipped with 5G who can gather data as it passes through its system, will possess a vast amount of information on everything going on.
If he then uses it for his own benefit, then there is a real danger. So we will need to ensure that he can't use it. But if a government of a certain country were to gather and use it for its own benefit, it could pose a big threat to other countries. This is the fear of a number of Western countries, and at their head, the United States. The American government fears that Huawei, with its immense network, could serve as a Trojan horse and eventually help the Chinese government to spy and gather data.
5G Networks must be secured, they must be strong. They have to be guarded from the enemy. We do have enemies out there. You need to understand that a telecom network has a heart with lots of little tentacles, antennae that gather data. If you're at the heart of
this network and you have access to all this data, you can collect phone numbers, addresses, consumer information, etc. So this heart is a highly sensitive subject. A good example would be the African Union. The African Union headquarter was a gift from the Chinese government. And all the
telecommunications equipment in the African Union headquarter building was provided by Huawei. And I think it was about five years in to the operation of this facility, the engineers discovered that every night significant volume of traffic was sent back to China from the Network, which was presumably everything from audio to video, from private meetings that were happening to their contents of their file servers every night. It is not clear that Huawei had any direct role in enabling that, certainly the PLA (Chinese secret services) could have put software in place to do something like that. But large-scale espionage like that is the second concern of Huawei equipment being used in operational networks.
Faced with suspicions and accusations from America, the founder and CEO of Huawei spoke out in person, swearing that he had absolutely no ill intentions. Does our company use backdoors? I can assure you, 100%, no, we do not use backdoors. And we're prepared to sign an anti-backdoors agreement with any government that requests it.
Huawei has always pleaded not guilty, demanded proof from the United States and assure that its equipment is ultra-securitized. But that barely reassures the Trump administration which fears, on top of espionage, a large-scale cyber-attack coming from overseas. Robert Strayer is the Deputy Assistant Secretary of State for Cyber and International Communications Policy.
Because there can be so many more devices on these 5G networks. There is going to be an expanded tax surface area, if you will, of ways that malicious actors can see to undermine our way of life. We are also going to have opportunities because there is so much more software, so much more code. This will also be additional points of vulnerability. We concern that in China, unlike in Western democracy,
there is no ability for a company to object to the commands its receives, from the government itself, in China's case from the Communist Party. They can not go to a independent court to review or object to being instructed to acquire data or disrupt that critical infrastructure that is going to be created by the 5G networks. By 2025, there could be between fifty and a hundred billion connected objects on earth: machines and equipment running thanks to 5G, and many of them open to attack. If they have access and they have the off switch and suddenly if there is a war, if there is a conflict between the US and China. It’s the bad case scenario but if Huawei is in your network, maybe they can shut it down. Shut down your phones, shut down calls, shut town your power
plans, shut down your water infrastructure, all critical things. President Trump signed an executive order on Wednesday, allowing the US to ban foreign telecommunications equipment and services. This is, part of the White House says if the president’s commitment to protecting information and calms technology, they are saying if the president here is declaring a state of emergency, a national emergency? Just this once, the US President seems to be backed by a large portion of his country's elected men and women in his face-off with Huawei and China. In
the corridors of Congress in Washington, numerous senators, both Republicans and Democrats, fire off rounds at the Chinese company with no holding back. The mayor risk her is, once you have something build in your communication system that has a backdoor in it, that means whatever is on your cellphone and whatever is in your communication, can be intercepted by someone else. So people want their cellphone communication to be protected, they don’t want to be public, the don’t want some other foreign institutions, whether an individual actor or a foreign nation, to have access to your data. Well, I think Huawei is a security threat not just to the United States, but to France, to the West. I think it is really important that allies around the world recognize this is a long term security threat. The United States' allies are also beginning to banish the Chinese giant: Australia, Japan, and now New Zealand. And naturally, Donald
Trump's black-listing is harming Huawei financially: its international smartphone sales have fallen 40% in two months. What the Americans are forbidding is access to GAFAM, the Big Five of Google, Apple, Facebook, Amazon and Microsoft. This will cause problems for Huawei users, because if they want to find a route, they won't have access to Google Maps; If they want a video, no YouTube; they want to send an email, no Gmail anymore; they want to send a message to friends on Facebook, they don't have it anymore! All of these services are de facto excluded from Huawei smartphones. In China that does not really matter, because Google is not allowed. But Huawei sells about half of its phones somewhere else. A lot of them are sold in Europe, and some of them are the best phones in the world right now. But now a lot of customers will think: “Oh wait a second. If I can not
have all the google applications like google appstore, google maps, gmail, google drive, then I am going to buy another brand.” For Donald Trump, attacking Huawei is another means of putting pressure on China, of destabilizing a competitor with a commercial show of strength. For a long period of time China has taken advantage of our country. 375 billion Dollars in trade deficits came about year after year. We don’t want that, not fair, not right.
I have no idea why Donald Trump is so intent on waging war on Huawei. We have several theories. One is that he doesn't want foreign technology, notably Huawei's, to be better than America’s technology. A second is that Huawei's technology is so advanced and so secure, it would prevent the United States from spying on its own people and on other countries. He has made confronting China on trade a major issue for his administration. And I think the Huawei problem is part of that. If Huawei were a company from Brazil, India or Europe, no one would care.
But because its part of this larger picture of the aggressive China that uses predatory trade practices and is now the leading source of espionage against the United states. They put all that together and decided to go after that. Who could have imagined this company's great destiny? How has it grown so quickly, to become emblematic of an entire nation and time in its history. When Huawei was founded in 1987, China was in full
growth. Ten years beforehand, the new leader, Deng Xiaoping, had launched his great modernization reforms with a single objective: to elevate China to the rank of a world superpower. Today's China is entering a new phase. We're now focusing our efforts on the modernization of farming and industry, science and technology. Along with national defense, so we can renew our country in a typically Chinese way.
In the 1980s, when Huawei was born and when it was just getting started, the Chinese market economy was also just getting started. So the Chinese government in Beijing, which is thousands of miles away in the north of China, decided: “We are going to have a few cities where we try out capitalism and we will try out in really small steps.” The Chinese leader at this time, a small men named Deng Xiaoping, said: “We are going to just do trials, we are going to a cross the river by feeling for the stones.” Among the places chosen to test Chinese-style capitalism, was Shenzhen, a small fishing village a stone's throw from Hong Kong. It was there that Huawei was founded. The reforms put in place by Deng Xiaoping were very progressive. It
started with agriculture and giving farmers the opportunity to own some of their land. And yields started to skyrocket! So after that, he extended them to industry. People began to think: “You know, I could make some money. I can become a company”. It was a change, you had a private sector that did not exist before. Huawei totally represents the rise of the economy of China, a country that no longer produces low-cost products. Also the end of plastic objects and
textiles "Made in China". It now represents China as a technological power, a force of innovation, investing in R&D. And that's why Huawei is a Chinese symbol. Huawei has created 160,000 jobs worldwide and boasts a record turnover of 100 billion dollars, because it has discreetly taken advantage of China's opening up to the global market.
Huawei was founded by Mr. Ren with a mere 21.000 yuan, about 5000 dollars at the time, and a handful of employees. There was a huge need for telecommunications on the Chinese market, because nothing existed. So he seized the opportunity.
Ren Zhengfei, the founder and big boss of Huawei; the embodiment of Chinese ambition and success. Ren Zhengfei, visionary or warlord? His military past with the Chinese People's Liberation Army is at the heart of the West's fears and the current trade war. We do know that the founder has a military past. So he was with the people’s liberation army at the start. News reports suggest that they had an early contract with the people’s liberation army, so that they might have helped them in becoming a contractor with the Chinese government and the Chinese military.
There is a significant concern that the people’s liberation army could use those connections to either get access to Huawei equipment or Huawei source code, to have the ability to insert malware into Huawei products. Mr. Ren served in the engineering corps of an army with millions of soldiers. So if you follow the logic of our detractors, it means that these millions of people are still closely linked to the Chinese government.
What else can I say to prove that Mr. Ren has no such links? He's just an ex-army engineer who became something else once his tour of duty was over. The West should be able to understand that. Huawei's history shows that it's the product of a China which has reformed and opened up, in order to strengthen competitiveness and bring prosperity to the Chinese economy so that it can enter into global markets. Huawei also promotes itself as being a totally private company, with zero shares owned by the Chinese state. Our founder owns about 1.4% of the shares, so the company is almost
completely run by our 90,000 employees. That's very rare in China. I'm also a shareholder, albeit a very small one, but every year the dividend is shared out among us all. To demonstrate its technological lead, Huawei exceptionally allowed us into its laboratories and warehouses in southern China. They stretch out as far as the eye can see. These immense concrete hangars spew out thousands
of brand new smartphones, ready for export across the globe. To enter, special clothing is obligatory. The phones are assembled on the last section of the production lines. 30 hours is required to manufacture a single unit. There are few employees, most of the work being performed by robots.
Beyond the production lines, the true pride of the Chinese brand is hidden on either side of these corridors. An austere and mysterious mood reigns... These are the labs of the Huawei Research & Development center. This engineer, for example, is developing 5G antennae capable of withstanding the worst weather conditions.
You see, now I spray the surface with water. This is a common antenna, this one is the latest generation. The water will not accumulate on the surface. So why did we develop this technology? The 5G signal uses
millimeter waves. The transmission ability is kind of weak. In cold places, such as in France in winter, the antenna can be covered with snow. That's why we developed a special cold in technologies to stop water or ice accumulation on the surfaces. So there will not be a sick layer of ice. Huawei is the company which has filed the most patents in the world.
5,400 in 2018: a record. That's twice as many as Mitsubishi and Intel who trail in 2nd and 3rd place. Inventions dreamed up by young scientists scientists like the 32-year-old Tan-Jua, two of which were developed following further studies in Germany. Huawei was the first company to use this cooling system. Of course now other companies use it as well. This is a component and inside is a drop of
water. So especially when you play games, you can feel the increase of temperature in the corner. To get where it is, Huawei started out — like many Chinese companies — drawing on Western inventions through forced technology transfers. A company wanting to operate in China must surrender its patents and transfer them to the Chinese. We've seen this in aeronautics and in
manufacturing. You're obliged to transfer your patents and explain your manufacturing processes. What's more, China also obliges you to help build their plants and set up the whole process from A to Z. A legal practice, for sure, but one to which are all too often added copies and even theft of intellectual property, are added.
It's a bit like the Original Sin of all Chinese companies. Huawei started by copying the big Western brands, even at the origin of their base products, which were network components. I spoke with an engineer at Alcatel who told me they discovered products that were identical to theirs in China. China's aircraft manufacturing, China's high speed train which look very much like a German high speed train. It is part of how they built their industry. Stealing technologies has
been part of China's opening to the West since the beginning, when Deng Xiaoping said that China would open its markets to the West. The US unveiled sweeping charges against Chinese tech giant Huawei on Monday, formally accusing the company and its affiliates of stealing trade secrets. The indictments say Huawei employees undertook a scheme to T-Mobile robotic technology named Tappy. Employees allegedly took
numerous unauthorized photos of Tappy and secretly removed a part of it from a laboratory in Washington State. Both sets of charges expose Huaweiś brazen and persistent action to exploit American companies and financial institutions and to threaten the free and fair global market place. Huawei has a bad track record when it comes to intellectual property. A great example of this is the pending law suit between the US government and Huawei around a T-Mobile testing robot called Tappy. And Tappy is a device that is used to test smartphones. They stole a robot arm during the visit and gave it back the next day with an apology. As if they had left with the arm by accident and
24 hours later, suddenly realized they had it: "Oh, what's this doing here?" Maybe I'm exaggerating, but still, they gave it back to avoid being accused of stealing it. But during the night, they had totally disassembled it and taken photos of all the parts to get all the info they needed. Here's the indictment issued by the US justice system, dated January 2019, regarding the T-Mobile case: "The United States versus Huawei", signed by a Federal Prosecutor. The 28-page document lays out in black and white the emails that Huawei engineers on American soil exchanged with their head office in China. I went once more today to TMO's mechanical arm testing laboratory and gained an overall understanding of the environment. I summarized it; please take a look.
Once again, we can't get any further information about the TMO robot system from TMO. They have complained to us a lot about this because we asked them too many questions about the robot on HQ's request. TMO said to me that if we ask them again such questions, they won't allow us to use their robot lab.
It's a classic case; it's part of their technique. But don't other countries do exactly the same thing? This is where we have to be careful, because when it concerns our allies, we tend to look the other way. But when it's our enemies, there's an outcry.
One interesting allegation that was part of the indictment was that Huawei has a bounty program where any employee, who was able to compromise an intellectual property of a competitor, will get a bonus from the company. If they access that intellectual property and post it to an internal server of Huawei. Accusations of industrial espionage denied by Huawei. The lawsuit is still ongoing and no judgment has yet been made by the US court. Huawei's spokesman insists that the company legally purchased foreign technologies, but nonetheless admits to past errors. We collect royalties on our own IP, and we pay a lot of royalties on other people’s IP. I believe each year we pay about $300
million on royalties for various forms of technologies that we license. You will hear that some people say sometimes: “Oh Huawei is a Chinese company. Chinese companies cannot innovate. They are copy cats, all they do is stealing other peopleś technologies and other peopleś ideas.” There may have been a time when that had a lot of truth in it. But things have changed and Huawei is at this point the fifth largest investor in R&D. That gives us a lot of our own intellectual property. We protect our own IP and we respect the IP of other
companies. Back at Huawei's HQ in Shenzhen in southern China: a megalopolis of 20 million inhabitants. The city is considered to be the new Silicon Valley and on its own accounts for 10% of China's GDP. In Shenzhen, like in the rest of China, the local authorities rely on an ultra-high-performance network to operate its smart surveillance cameras. A symbol of a modernizing China, sometimes excessively: here, if you jaywalk across a street, your face and full name appear on a giant screen and you receive a text on your smartphone. These cameras are fitted with facial recognition, a system widely accepted in China, where respect and order are key values. Technology to serve security;
video surveillance to serve collective discipline. The video surveillance network developed in China is called Skynet. It comprises 500 million cameras installed in urban and rural areas by a number of Chinese companies. Most of them are fitted with facial recognition capable of identifying human faces and detecting suspicious movements on the street.
In the long term, the system will be able to scan the entire Chinese population of a billion and a half in barely one second. In this Orwellian world, Huawei is creating Safe Cities that will be entirely futuristic, connected... and watched! One part of business that Huawei is in and a lot of people know less about is in surveillance technology. So the company calls it safe cities. They probably talk about this when you go to Huawei headquarters, they say one of the areas is safe cities and they talk about it in a very nice way. Safe cities are kind of an extension of smart cities. Smart just means basically connected to a network.
Our technology can recognize the license plate of a car in case there is a criminal in the car. Our company has an employee facial recognition technology in case you have criminals in your city. There are cameras that are basically connected to a network and what they do is they allow is police protection. China is obsessed with controlling society and one of the tools needed to do that is to see everything. Five years ago, there were already quite a few cameras, but it wasn't excessive. But in recent years, in every Chinese
city, you can see them everywhere. Everywhere! All along the sidewalks there are posts with cameras to capture every pedestrian; and some are fitted with lights to take pictures at night. So these are clearly cameras for the facial recognition of citizens. We help city governors use digital technology to manage the cities better. One aspect of better management is safety. Huawei only supplies its safe cities to the Chinese government, but it exports its model across the globe. There are now 230 safe cities in the world, in 40 different countries. Numerous capital cities in Africa,
Central Asia and Central America have deployed the Huawei system. But also Belgrade in Serbia, and Gelsenkirchen in Germany. On its website, the company also promotes its city of the future, with everything needed for video surveillance, a complete package to see and scrutinize everything. In the city of Lishui, in Zhejiang province of China traffic behavior has changed tremendously after using Huawei 4K cameras. What's more, an AI-enabled camera can look into certain details of each image specifically. For example it can be detect of someone is wearing a
seatbelt or not. And now the challenge not just what the Chinese are doing to watch the other Chinese people, but this Chinese technology is spread out to other parts of the world to watch people. What is facial recognition for? To check the entire Chinese population.
If you installed all that in European cities tomorrow, it would be exactly the same thing. Xi Jinping is worried about political instability, the party feels fragile. So they have communication surveillance, facial recognition, other kinds of espionage. And some countries say this is a track what depends on what your government does. And if you have a government that respects the rules of law and respect human rights, using Huawei technologies by itself does not mean you are in a police state. But if you have a more dicey government you might want to be careful. It is
designed to control populations. In the case of surveillance cameras, like for 5G, once again, it's the presumed connections between Huawei and the Chinese government that people question. What would happen if Beijing were to ask Huawei for its foreign users' data? Or for video footage filmed by its cameras across the world? Huawei swears that its information will remain entirely confidential. But a Chinese law on intelligence, passed in 2017, is sowing the seeds of doubt.
China passed the law in 2017 that says essentially: No Chinese company can refuse to cooperate with the secret services. Every Chinese company must cooperate with the Ministry of National Security. And this is not like in America. Tim Cook, the head of Apple, decides he does not like to work with FBI and it goes to court. In China if you are refusing to cooperate you are going to end up in
camps of Mongolia and longer. If you are lucky. The US has exactly the same law, so we need to be fair. The Patriot Act obliges GAFAM to give the government their user data when there's a risk of terrorism or national security. So the Chinese merely passed a law that already existed in the US. But there's nevertheless a difference. If, in the US, I'm involved
in a trade dispute, I can file a lawsuit. If it's a civil dispute, I can file a lawsuit. Whereas the Chinese justice system is political, it belongs to the Communist Party. The omnipresence of the Chinese state. Proof that technological dominance has become a major strategic issue. The two rivals, Washington and
Beijing, have made Artificial Intelligence their next absolute priority. The winner will depend on who invests the most. Robotics, biotechnology, 5G then 6G networks, space weapons, quantum satellites? the hi-tech race is on; the war for technological superiority has been declared.