Trump's Huawei Reprieve Is A National Security Debacle

From Zero Hedge:

At the end of last month, President Donald Trump publicly promised to give the Chinese company a reprieve from newly implemented U.S. restrictions.

Huawei is in no position to resist Beijing's demands to illicitly gather intelligence. For one thing, Beijing owns Huawei. The Shenzhen-based enterprise maintains it is "employee-owned," but that is an exaggeration. Founder Ren Zhengfei holds a 1 percent stake, and the remainder is effectively owned by the state. Moreover, in the Communist Party's top-down system, no one can resist a command from the ruling organization. Furthermore, Articles 7 and 14 of China's National Intelligence Law, enacted in 2017, requires Chinese nationals and entities to spy if relevant authorities make a demand. Ren has maintained the company would not snoop on others, but that claim, in view of the above, is not credible...

Additionally, Beijing has used Huawei servers to surreptitiously download data from others, most notably the African Union from 2012 to 2017.

Not surprisingly, Huawei is laying the groundwork for grabbing tomorrow's data.

First, Christopher Balding's study of résumés of Huawei employees reveals that some of them claim concurrent links with units of the Chinese military, in roles that look as if they involve intelligence collection. As he writes in his study, "there is an undeniable relationship between Huawei and the Chinese state, military, and intelligence gathering services"...

Theft is not the only risk. As Sen. Blackburn pointed out to Fox News, Huawei will also serve as Beijing's mechanism for controlling the networks operating the devices of tomorrow. The concern is that the Chinese government and military will be able to use Huawei equipment to remotely manipulate devices networked on the Internet of Things (IoT), no matter where those devices are located. So, China may be able to drive your car into oncoming traffic, unlock your front door, or turn off or speed up your pacemaker...

Ross on Tuesday implied that licenses would be granted for items available from other countries, saying "we will try to make sure that we don't just transfer revenue from the U.S. to foreign firms." At first glance, sales of those items appear non-objectionable, but, as the New York Times reported on Tuesday, U.S. companies seeking exemptions acknowledge that their products are often more advanced than those from Japan, South Korea, and other countries.

Therefore, the better course would be to get all American suppliers to stop all sales and licenses and to rally Tokyo, Seoul, and other capitals to do the same. That would severely disrupt Huawei, perhaps forcing it out of business or at least impeding its progress. In short, Ross is underestimating America's leverage.

As Eli Lake, writing on the Bloomberg site, points out, American policy on Huawei looks like it had "collapsed" after the bilateral meeting with Xi. Lake is right. Beijing, buoyed by the talk of the American climb-down, is now fast selling Huawei equipment around the world, which means, in the normal course of events, the Chinese will soon control the world's 5G backbone.

https://www.zerohedge.com/news/2019-07-12/trumps-huawei-reprieve-national-security-debacle