From bad to worse for Huawei

The Chinese tech giant, already reeling from a barrage of criticism in the West, now faces new spying allegations.

Huawei’s Meng Wanzhou, daughter of the company founder, is due to face court next month to set a date for a hearing for her extradition to the US. Picture: AFP

Chinese technology giant Huawei faces another horror year with the arrest of its sales director in Poland on spying charges and its chief financial officer Meng Wanzhou due to return to court in Canada next month to face potential extradition to the US.

Six months ago Huawei, the world’s largest supplier of telecommunications equipment, was hoping to be a supplier for Australia’s next-generation 5G network supplying customers including Vodafone, Optus and TPG.

Since the decision in the final days of the Turnbull government in August to ban Huawei and other Chinese suppliers from participating in the 5G rollout in Australia, the company has been hit with a barrage of criticism by Western security agencies that its technology could leave customers open to spying by the Chinese government and bans on its products by countries including New Zealand and the US.

Last year culminated in the arrest and jailing of Meng, the daughter of the company’s founder, as she transited through Vancouver airport, for potential extradition to the US on charges of having violated US sanctions on doing business with Iran.

Meng is in Vancouver, temporarily free on $10 million bail, and is due to return to court on February 6 to set a date for a hearing over extradition to the US.

The company suffered a further blow last week when its sales director in Poland, Wang Weijing, was arrested by Polish counter-intelligence service on suspicion of spying, along with a former Polish intelligence agent in Warsaw.

The company announced on the weekend it was sacking Wang as his arrest had “brought Huawei into disrepute”.

It said the arrest of Wang, who worked at the Chinese embassy in Poland from 2006 to 2011, was not related to Huawei.

“Huawei complies with all the laws and regulations in the countries where it operates,” the company said in a statement released over the weekend.

But the Polish arrest has been a serious setback for the company, which wants to convince Western customers that it is not linked with Chinese intelligence services and hopes to expand its business in Europe, its biggest foreign market.

The Polish national who was arrested was reported to have worked for mobile phone company Orange Polska.

The two men have been arrested but so far have not been charged with any offences.

China’s Ministry of Foreign Affairs said it was “highly concerned” about the arrests.

While the US has passed a law banning government agencies and contractors from using Huawei technology, Europe has so far remained a lucrative market that has been investing heavily in cutting-edge 5G technology.

If the company were to face similar bans in Europe, its potential for global expansion could be greatly constrained.

Poland has been the company’s headquarters for its operations in central and northern Europe and the Nordic region.

Norway and Sweden are now investigating whether Huawei technology should be used for their 5G rollout. Norway’s Justice Minister, Tor Mikkel Wara, said the country shared “the same concerns as the US and Britain” about the potential for spying on private and state actors.

The past few months have seen security officials around the world — including Britain and Australia — warn of the risks of using Chinese technology.

In a speech in Canberra in October, the head of the Australian Signals Directorate, Mike Burgess, said using “high risk vendor equipment” could pose a threat to the operation of critical infrastructure in Australia.

“Historically, we have protected the sensitive information and functions at the core of our telecommunications networks by confining our high-risk vendors to the edge of our networks.

“But the distinction between core and edge collapses in 5G networks. That means that a potential threat anywhere in the network will be a threat to the whole network,” he said.

Britain has not imposed any bans against Huawei but last month M16 agency head Alex Younger said Britain needed to decide how comfortable it was “with Chinese ownership of these technologies”.

The comments saw Britain’s largest mobile supplier, BT — which has been using Huawei technology since 2005 — announce it was removing Huawei technology from parts of its 3G and 4G network and will not be using its equipment in the core parts of its 5G network.

In France, mobile phone company Orange has said it will not be using Huawei equipment for its 5G networks.

Last week it was also revealed the US government was blocking some of Huawei’s exports from its Silicon Valley research and development unit, Futurewei Technologies.

The Wall Street Journal reported the US Commerce Department would not be renewing the company’s export licence.

The Czech intelligence agency has become one of the latest to speak out against using Huawei and ZTE technology in its telecommunications agency.

Prime Minister Andrej Babis followed by ordering his government office to stop using Huawei mobile phones.

Germany has said it is opposed to any bans on equipment for its 5G network.

The increasing concern about potential security risks is becoming an issue for business with the term “digital iron curtain” now gaining currency.