Tech

Brexit Britains Huawei conundrum

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LONDON — Theresa Mays government faces a highly contentious decision about Britains future — except this time its about a Chinese firm.

In the midst of the Brexit crisis, the prime minister faces growing pressure to clarify the U.K.s stance toward Huawei, the Shenzhen-based telecoms giant that Washington says will pose a security risk if its allowed to build Britains next-generation 5G network.

At the next meeting of the National Security Council, which will be presided over by May, top officials will evaluate months of evidence about alleged security risks linked to Huaweis hardware and decide what, if any, restrictive measures to take about its access to U.K. telecoms markets.

But as with the Brexit debate — an endlessly divisive problem for the ruling Conservative Party — there are fears Mays top team will be split over how to deal with Huawei and the broader question of how to weigh Britains commercial interests in China against its defense ties with the United States, officials told POLITICO.

On one side of the divide there are security “hawks” like Defense Secretary Gavin Williamson and cybersecurity chief Ian Levy, who underscore intelligence assessments that highlight security risks with Huawei and argue in favor of tougher restrictions, including bans on access to core communications networks.

Some ministers are looking to Beijing for trade opportunities to offset any dropoff in trade with the European Union.

“The security in Huawei is like nothing else — its engineering like its back in the year 2000 — its very, very shoddy,” Levy, the head of the U.K.s Government Communications Headquarters (GCHQ) security service, told the BBCs “Panorama” in April, adding that the problems could lead to a partial ban on the companys equipment.

On the other side there is George Young, who speaks for the Cabinet Office in the House of Lords, who says it would not be in the national interest to ban Huawei totally.

The U.K. government has “deep insight into what Huawei is up to” and could “take mitigating action in certain circumstances,” Young told a House of Lords debate in January.

The all-consuming nature of Brexit — Britain has just won a six-month extension on its exit from the EU — has overshadowed Huawei in the public eye and made it hard to predict where the governments line will be drawn.

But officials informed about preparations told POLITICO that the government has taken on board criticism of the Chinese telecoms giants security measures. And one minister familiar with dynamics inside Mays security Cabinet said on condition of anonymity that they anticipate a “row” over the way forward.

End of a golden era?

One explanation for the U.K.s internal dispute over Huawei is that the country is heavily invested in the prospect of future trade with China. Trade has boomed over the past decade, and some ministers are looking to Beijing for trade opportunities to offset any dropoff in trade with the European Union as a result of the U.K. leaving the bloc.

Last year, before the prime minister headed to China for an official visit, a minister back home described London-Beijing ties as having entered a “golden era,” likely spurred on by Chinese President Xi Jinpings promises in a landmark 2017 speech of vast investment and bolstered trade with EU powers.

According to Joyce Anelay, a senior minister at the Foreign Office until 2017, London has become increasingly aware of Chinas “Belt and Road” Initiative — a broad plan designed to bolster East-West trade along historical routes.

The initiative has illustrated to U.K. officials “how [Chinese officials] were determined to drive ahead in a way others hadnt quite forecast,” said Anelay. “Their technology has been supported by this vast investment by China which means they are outstripping everyone elses commercial capacity to provide an alternative.”

Jim ONeill, former chief economist of Goldman Sachs, and who was a Treasury minister until 2016 under Chancellor George Osborne, said unless there is clear evidence Huawei has done something systematically to adapt the technology to spy, the government needs to think about China with a more Treasury-style perspective “and bit less [Foreign and Commonwealth Office] and Home Office” or it would never really “explore the benefits economically for post-Brexit Britain.”

Any serious questioning of Huaweis position in the U.K. without firm evidence, including a ban on their access to procurement markets, could put a damper on that mood, supporters of a friendly China policy argue.

Defenders of the U.K.s trading relationship with China are stepping up | Str/AFP via Getty Images

However, over the past year security concerns have come to overshadow the gung-ho commercial stance, amid a coordinated campaign by U.S. President Donald Trumps administration to pull allies away from Huawei and impose restrictions.

Defense Secretary Gavin Williamson, who earlier this year announced plans to send a new British aircraft carrier to Chinas backyard, said in December that he has “grave, very deep concerns” about Huaweis equipment being used on Britains 5G network.

“Weve got to look at what partners such as Australia and the U.S. are doing in order to ensure that they have the maximum security of that 5G network and weve got to recognize the fact, as has been recently exposed, that the Chinese state does sometimes act in a malign way,” he told journalists.

Visitors look at their phones at the Mobile World Congress (MWC) in Barcelona | Gabriel Bouys/AFP via Getty Images

Under pressure from Washington, most of the “Five Eyes” security partnership — the United States, Canada, United Kingdom, Australia and New Zealand — have taken steps to limit Huaweis market access. Feeling the heat, the U.K.s intelligence community has hardened its rhetoric toward the company since the start of the year.

Last month, the countrys cybersecurity authority released an annual “oversight report” that