Chinese smartphone and telecommunications giant Huawei has long been accused of secretly equipping its phones with software and hardware features that can be used to send user information back to China. Recently Western Internet security researchers discovered how some countries can use Huawei phone software to monitor and censor journalists of the government via a commonly used router accessory called middlebox hardware. Using special middlebox software supplied by Huawei, nations can quietly censor user access to certain subjects or identifying such users and secretly pass on offending messages to someone else. Internet security researchers discovered that a quarter of the 69 countries studied were using Huawei middlebox features for censorship, especially against local journalists distributing stories critical of the local government or specific officials.
Middlebox is a term first used in 1999 to describe a growing number of hardware devices installed in networks for security reasons or system efficiency. Huawei developed middlebox hardware that worked with software features included in all Huawei phones. If a government allowed Huawei phones to be imported and sold, Huawei would, depending on the government, point to middlebox capabilities in Huawei phones that enabled the local government to easily censor Huawei phone users as well as let the government know who the offenders were. Less well known was that all data collected by Huawei middlebox systems was also sent back to China “for quality control purposes.”
As the many capabilities of Huawei middlebox tech became known, a growing number of countries banned Huawei from selling their phones locally. This kept Huawei out of many major markets. By the end of 2019 America, Australia, New Zealand, Japan, and Taiwan banned use of Huawei phones on mobile phone networks. Many other nations adopted prohibitions when it was discovered that the new 5G network tech offered by Huawei contained even more exploitable (potential spyware) middlebox capabilities. Many nations investigated the Huawei 5G tech and banned certain elements of it. All this action against Huawei middlebox tech has caused Huawei phones to lose sales. For example, Huawei phones worldwide shipments hit a high of 20 percent of all phones sold in mid-2020 and have since declined to less than eight percent. The latest Huawei middlebox revelations won’t help. Huawei will survive because they still dominate the Chinese market and cellphone sales in most nations they are allowed to sell to. China is the largest cellphone market and while Huawei is not government owned, it is run by loyal CCP (Chinese Communist Party) members who became rich by following orders.
Huawei was founded in 1987 by former Chinese military officers who still had connections in high places. All the founders were active members of the CCP and Huawei used that form of protection to plunder Western tech secrets and ignore foreign patents whenever possible. Many foreign competitors were told if they wanted access to the growing Chinese market, they had to keep quiet about what Huawei had “borrowed” from them. Most foreign companies complied, but none forgot. Now decades of grievances against Huawei are suddenly threatening the very existence of Huawei outside China, and greatly reducing its international power and potential.
In 2019 the Americans put sanctions on Huawei specifically, cutting it off from American tech. That meant Huawei smartphones could no longer use Android, or at least not the most current versions, or receive updates. American suppliers of microchips also halted shipments. China says it can produce the needed components domestically and has developed another operating system for their smartphones. But ramping up the domestic production of needed microchips and getting a new operating system accepted by the market takes time. Getting a new operating system accepted by the export markets was particularly difficult and even getting domestic users to accept it was not easy. In theory it can be done but in practice, it is one of many desperate measures the normally prudent Chinese are being forced to fall back on.
The retaliation against Huawei became very public in late 2018 when Huawei executive Meng Wanzhou was arrested in Canada at the request of the United States. Meng Wanzhou is the 46 years old daughter of a former Chinese army officer who was one of the founders of Huawei. Meng was arrested while she was at a Canadian airport transferring from an arriving flight to a connecting one. The Americans had been investigating Huawei for illegally exporting smartphones to Iran and engaging in bank fraud to enable Iran to facilitate foreign trade despite American sanctions against it. Meng Wanzhou, the Huawei CFO (Chief Financial Officer) was to be extradited to the U.S. for prosecution if Meng was unable to get a Canadian court to rule against the extradition request. Canadian leaders insist that the law will be strictly observed and justice done. Her lawyers tried to delay the extradition and kept losing appeals in Canadian courts. This led her father to say that he expects his daughter to be convicted and go to jail.
China acted quickly to put pressure on Canada and nine days after Meng Wanzhou was jailed, they arrested Michael Spavor and Michael Kovrig, two Canadian citizens working in China. Spavor worked in North Korea as the head of an organization that made it easier for foreigners to do business with North Korea or visit as tourists. Spavor spent a lot of time in China. Kovrig was a former Canadian diplomat who worked for the International Crisis Group, a Belgium based NGO (non-government organization) that worked to prevent or resolve disputes between nations. Spavor and Kovrig were accused of violating state secrets laws. China quietly made it be known that the two Canadians would be released if Meng Wanzhou was set free. She was released in a deal in which she pled guilty of some of the charges against her and the U.S. agreed to go along with that to get the two Canadians freed. That happened three days after Meng Wanzhou was released on September 24th.
Huawei used its close ties with the Chinese military and government intel agencies to get the Chinese government to take Canadians as hostages and threaten them with long prison terms if Meng Wanzhou was not released. The delays in her release were a rebuke to China. This incident reminded many Western nations that avoiding Huawei equipment frustrates Chinese espionage efforts and military operations in general. Many victims of Huawei dirty tricks are now going public with the details since it is safe to do so with Huawei and the Chinese government on the defensive. Huawei has ordered production cuts as foreign customers realize that importing Huawei is, at least for the moment, not a wise business decision. Western nations are still vulnerable to the hostage taking extortion because they do not forbid their citizens from visiting China but it does remind them of the risks of hostages being taken because their home country will not deliver what China demands.