Concerns over Chinese involvement in 5G wireless networks stem from allegations that cellular network equipment sourced from vendors from the People's Republic of China may contain backdoors enabling surveillance by the Chinese government (as part of its intelligence activity internationally) and Chinese laws, such as the Cybersecurity Law of the People's Republic of China, which compel companies and individuals to assist the state intelligence agency on the collection of information whenever requested. The allegations came against the backdrop of the rising prominence of Chinese telecommunication vendors Huawei and ZTE in the 5G equipment market, and the controversy has led to other countries debating whether Chinese vendors should be allowed to participate in 5G deployments.
All members of the Five Eyes international intelligence alliance—Australia, Canada, New Zealand, the United Kingdom, and the United States—have declared that the use of Huawei telecommunications equipment, particularly in 5G networks, poses "significant security risks". The United States, Australia, and Vietnam have banned Chinese companies from providing its 5G equipment due to security concerns. The United Kingdom is also expected to implement a complete ban following resistance from MPs.
These concerns led to The Clean Network, a US government-led, bi-partisan effort to address what it describes as "the long-term threat to data privacy, security, human rights, and principled collaboration posed to the free world from authoritarian malign actors." It has resulted in an "alliance of democracies and companies," "based on democratic values." According to the United States, The Clean Network is intended to implement internationally accepted digital trust standards across a coalition of trusted partners.
According to Hudson Institute senior fellow Arthur L. Herman and former US security advisor Robert C. O'Brien, writing in The Hill, in December 2021, only 8 countries have been willing to ban Huawei's 5G equipment, but more than 90 countries have signed up with Huawei, including some NATO members.
Background 5G succeeds 4G LTE wireless technology. Developments have been focused on enabling low-latency communications, and promises of a minimum peak network speed of 20 gigabits per/second (20 times faster than the equivalent on 4G LTE networks), and uses within Internet of things and smart city technology.
The initial development of 2G, 3G, and 4G technologies were centred upon Japan, Europe, and the United States, respectively. China's five-year plan for 2016–2020 and the Made in China 2025 initiative both identified 5G as a "strategic emerging industry", with goals for Chinese companies to become more competitive and innovative in the global market, and avert the country's prior reputation for low-quality and counterfeit goods. All wireless carriers in China are state-owned, which has helped the government to expedite the development of 5G networks, and access to the wireless spectrum. It has been argued that early access to 5G would give China an advantage in developing services that can leverage the technology. Domestic vendors such as Huawei and ZTE have subsequently leveraged China's position to market 5G-compatible equipment for international deployments; Huawei had seen significant growth in the 2010s, aided by its ability to undercut competitors, a large number of international partnerships, the increasing success of its smartphone business, the amount it has invested in R&D, competitive deployment support, and investments by the China Development Bank. As of 2019, the only other major manufacturers of 5G equipment are the European rivals of Ericsson and Nokia: they, along with Huawei and ZTE, account for two-thirds of the overall market. According to Bloomberg, Huawei's 5G equipment tends to be less expensive than the alternatives provided from Nokia and Ericsson AB, and is "often of higher quality" due to having put more investments in research and development. And despite the allegations, Huawei has still managed to win 5G contracts in Russia, the Middle East, Africa, and Asia, including the Philippines and Thailand.
Huawei has faced various allegations of intellectual property theft and corporate espionage, including copying proprietary source code from Cisco Systems equipment, and an employee stealing a robotic arm for smartphone stress testing from a T-Mobile US laboratory. In January 2019, US authorities indicted Huawei and its vice-chairwoman and CFO Meng Wanzhou on charges of theft of trade secrets (including allegations that Huawei's Chinese division had a program to issue bonuses for employees who successfully obtain confidential information from competitors. In regards to the aforementioned T-Mobile robotic arm, Huawei's US division disavowed the employee's actions and this program, as it is not in line with local business practices), and having used a shell company to mask investments in Iran that violated US sanctions (including resale of technology of US origin); in October 2011, The Wall Street Journal reported that Huawei was the largest provider of telecommunications equipment in Iran.
In 2012, it was reported by The Wall Street Journal that Canadian telecom equipment firm Nortel Networks had been the subject of an intrusion by Chinese hackers from 2000 through its bankruptcy in 2009, who had accessed internal documents and other proprietary information. The company's former security adviser Brian Shields alleged that the intrusion was a state-sponsored attack that may have benefited domestic competitors such as Huawei and ZTE, and acknowledged that there was circumstantial evidence that connected the company's downfall to the beginning of Huawei's international growth. He warned against cooperation with Chinese vendors, arguing that "they've got this Communist Party over there right in their corporate offices. What are these people doing? Why is it such a close relationship with the Chinese government?"
Allegations surrounding Chinese surveillance via network infrastructure cite the 2017 National Intelligence Law, and the 2014 Counter-Espionage Law. The National Intelligence Law gives intelligence agencies the ability to compel citizens and organizations to cooperate in investigations, and that China will protect any organization or individual that helps the Chinese government. The 2014 Counter-Espionage law states that "when the state security organ investigates and understands the situation of espionage and collects relevant evidence, the relevant organizations and individuals shall provide it truthfully and may not refuse." Softbank CTO Miyagawa Jyunichi explained that unlike a 4G core network (where data is encrypted and transmitted using a tunneling protocol that makes it difficult to extract communication data from the network), if technology like mobile edge computing is used, processing servers could be placed near 5G base stations, to enable information processing on the base station side of the carrier network. This makes it possible to extract user data via these servers, which theoretically allows for surveillance.
The United States government claims that the Chinese government can force wireless infrastructure vendors to incorporate software backdoors or hardware that would allow China to spy on the US or its allies.
US security concerns surrounding Huawei have pre-dated the current 5G-related controversies; in 2007, Bain Capital attempted to acquire network equipment vendor 3Com with minority financing from Huawei. However, the transaction faced scrutiny from the Committee on Foreign Investment in the United States, which deemed it a threat to national security due to Huawei founder Ren Zhengfei having been a former engineer for the People's Liberation Army, and concerns that China could gain access to intrusion detection technology that 3Com had developed for the US government and armed forces. When Huawei bought out its joint venture with Symantec in 2012, The New York Times reported that Symantec had fears that the partnership "would prevent it from obtaining United States government classified information about cyberthreats".
It has been argued that Huawei has ties to the Chinese government: the CIA has cited anonymous British sources claiming that entities such as the National Security Commission of the Chinese Communist Party and the People's Liberation Army have provided funding to Huawei. US senator Marco Rubio referred to Huawei and ZTE as being "state-directed", and warned that the US had to be "vigilant" in preventing them from "undermining and endangering America's 5G networks". He also stated that Huawei "undermine[s] foreign competition by stealing trade secrets and intellectual property, and through artificially low prices backed by the Chinese government." During testimony to the Senate Intelligence Committee in 2018, US intelligence chiefs warned against the company, with FBI director Christopher A. Wray stating that they were "concerned about the risks of allowing any company or entity that is beholden to foreign governments that don't share our values to gain positions of power inside our telecommunications networks."
Fellow senator Mark Warner argued that "no major Chinese company is independent of the Chinese government and Communist Party", and warned that the Chinese government can exploit consumer electronics products from these companies, such as smartphones. He claimed that "software reviews of existing Huawei products are not sufficient to preclude the possibility of a vendor pushing a malicious update that enables surveillance in the future. Any supposedly safe Chinese product is one firmware update away from being an insecure Chinese product." Robert Strayer, US State Department ambassador for cyber and international communications, stated at MWC Barcelona in 2019 that they were "asking other governments and the private sector to consider the threat posed by Huawei and other Chinese information technology companies." The country has threatened to withdraw some co-operations with its allies if they install Huawei equipment on telecommunication networks.
China contends that United States efforts to block its 5G cooperation with other countries violates principles of fair competition.
Australia
Australia banned Chinese vendors from providing equipment for 5G networks, citing the aforementioned intelligence laws as a factor. Other countries like Japan have cited security concerns and have successfully persuaded carriers to exclude Huawei or ZTE equipment in their 5G networks.
Belgium Belgium is the seat of the European Commission, other EU institutions, the NATO headquarters, SHAPE, and other high-ranking institutions. On 9 October 2020, Orange S.A. and its competitor Proximus (ex Belgacom) have declared that Nokia and Ericsson were going to deliver 5G equipment.
Brazil In November 2020, Brazil backed America's "Clean Network" initiative. In November 2021, as Brazil held its tender for 5G wireless networks, Perpétua Almeida, a federal lawmaker who led the commission for the 5G tender for the lower house of Brazilian Congress, said that banning Huawei never made sense and that Brazil had to maintain an independent position amidst the US-China dispute over the company.
Canada Rogers cooperated with Ericsson to build their 5G network. Bell Canada has worked with both Ericsson and Nokia. Telus is working with Ericsson, Nokia, and Samsung. SaskTel is working with Samsung.
In a May 2023 policy statement, Canada's Minister of Innovation, Science and Industry expressed serious concerns about companies such as Huawei and ZTE, as they could be compelled to comply with extrajudicial directions from foreign governments, which would conflict with Canadian laws or be detrimental to Canadian interests.
Netherlands