China, telecommunications and national security collide

Apr 24, 2012

China's largest telecommunications company has a "trust issue."

Huawei is headquartered in Shenzhen, China. It manufactures equipment for telephone and broadband networks. The only larger telecom in the world is Swedish-based Ericsson.

The Australian government recently announced Huawei would not be allowed to bid on that country's National Broadband Network, due to security concerns.

Strategic News Service publisher Mark Anderson was in Australia at the time, and applauds the decision. He talks about it with KPLU's Dave Meyer on this month's edition of The Digital Future.

The Australian government did not specify why it doesn't trust Huawei.

Mark has been analyzing the company, and says there are at least three big reasons for Australia and other nations to be cautious about doing business with Huawei:

  • It has a history of stealing intellectual property.
  • The company has strong ties to China's military and political leadership.
  • Security analysts are worried Huawei's equipment could contain "backdoors" that can be used for espionage.

But the problem is bigger than Huawei. Telecommunications networks are a natural target for espionage, and it's extremely difficult, if not impossible, to prove that a network is secure.

Mark says the key is to ensure that your supply chain is clean and that all the vendors in the chain are trusted agents.

As President Ronald Reagan once said, "Trust, but verify."