Research Notes
China Cyber Security

What the world would look like if Huawei was Russian

13 Jun 2022

Growing aggression by Russia and China have put infrastructure security for energy and telecommunications in center stage. Policymakers recognize that the cost of Russian gas and Chinese information communication technology (ICT) is far higher than its seeming low price on the paper. Given the Russian invasion of Ukraine and China’s belligerence on Taiwan, many countries now attempt to curtail their relations with Russia and China. However some political leaders and companies have downplayed the security risks of Russia and China and have even deepened engagement. This puts the rest of Europe at risk.

At the Singapore dialogue meeting last week US Defense Secretary Lloyd Austin told his Chinese counterpart General Wei Fenghe that the US is committed to its One China policy in Taiwan but warned the Chinese military of become increasingly aggressive in the region. After the meeting a Chinese defense ministry spokesman said Wei reiterated Beijing’s firm stance on Taiwan, which is that it is part of China. “The PLA (People’s Liberation Army) would have no choice but to fight at any cost and crush any attempt of Taiwan independence, safeguarding national sovereignty and territorial integrity,” he said. Given Russia’s invasion of Ukraine, policymakers and telecom operators should reflect on the consequences of further instability.

Europe’s dependence on Russian gas and Chinese telecommunications infrastructure

As we recognize Europe´s dependency of Russian gas, we should think similarly about dependence Chinese ICT. In December 2018 Strand Consult published the research note “The story behind the Huawei story – it’s not a politically-orchestrated car accident in slow motion”, critiquing the media narrative that restrictions on Huawei were just trade war tactics. Strand Consult observed that security concerns about Huawei go back to at least 2005. It subsequently published the report “Understanding the Market for 4G RAN in Europe: Share of Chinese and Non-Chinese Vendors in 102 Mobile Networks” which maps the use of Chinese equipment across 102 mobile networks in 31 European countries, demonstrating the extent of the security risk., 58% of Germany’s 4G infrastructure in 2020 came from Huawei and ZTE.

The German government has for many years had a naïve view of Russia and China. It shut down many nuclear power plants before they had an energy alternative in place. By switching to Russian gas, Germany became so dependent on Putin, that he could shut down parts of the German and European economy with the flick of a switch. With help from the former chancellor and Putin’s good friend Gerhard Schröder, Nord Stream 2 was established to increase Germany’s dependence on Russian gas and make Russia less dependent on the gas pipes that transport Russian gas from Russia to Europe and Germany through Ukraine. The brutal fact is that 65% of German gas and 40% of the Europe’s import comes from Russia equal to 155 billion cubic meters of natural gas.

Today, Russia, with Putin at the helm, sees the gas as a weapon to limit Western aid to Ukraine. On the one hand, you demand payment for gas in Rubles to keep the Russian economy alive and on the other hand, you have chosen to shut off the gas to five countries (Poland, Netherland, Bulgaria, Finland and Denmark), all of which have shown a behavior the Russians do not like. The signal that Putin has sent to governments all over the world is that they have a very powerful weapon that has not only resulted in rising energy prices, it has also meant that a number of countries have lost access to Russian gas.

The US and many European countries opposed Nord Stream 2 because of concern that it would increase Russian influence in Europe and because of its effect for use of existing pipelines in Central and Eastern European countries, including Ukraine.

Flip the switch

The dangerous geopolitics with Russian gas demonstrates a similar pattern with Chinese ICT, the set of hardware, software, services, and practices which are increasingly integrated as the infrastructure of the digital society. Huawei is just one of many national Chinese ICT champions (think Lenovo for PCs, TikTok for video entertainment, and now the Chinese military linked YMTC for chips for the iPhone and other Apple devices) with embedded backdoors and backchannels for illicit data access. Companies and countries can purchase parts or the whole of China’s end-to-end solutions for surveillance. In addition to a daily barrage of hacking, China’s military maneuvers have increased significantly over Taiwan. “The PLA (People’s Liberation Army) would have no choice but to fight at any cost and crush any attempt of Taiwan independence, safeguarding national sovereignty and territorial integrity,” noted a Chinese spokesperson following a recent meeting of U.S. Defense Secretary Lloyd Austin and Chinese Defence Minister General Wei Fenghe.

In December 2018 Strand Consult published the research note “The story behind the Huawei story – it’s not a politically-orchestrated car accident in slow motion”, critiquing the media narrative that restrictions on Huawei were just trade war tactics and documenting  that the security concerns about Huawei going back to at least 2005. Strand Consult subsequently published the report “Understanding the Market for 4G RAN in Europe: Share of Chinese and Non-Chinese Vendors in 102 Mobile Networks” which maps the use of Chinese equipment across 102 mobile networks in 31 European countries, demonstrating the extent of the security risk: 58% of Germany’s 4G infrastructure in 2020 came from Huawei and ZTE.

Many German policymakers display a similar naiveté toward China and its state-owned enterprises and prioritize trade over security. As countries around the world concluded that Huawei and ZTE posed too great a security risk and moved to restrict its equipment from 5G networks, German operators doubled down and stockpiled Huawei equipment, as noted by Handelsblatt. Even with the revelation of the facts, German policymakers have been weak and slow to address dependency on Chinese equipment.

Just as Russia believes that Crimea, Luhansk, Donetsk, and probably the rest of Ukraine are natural parts of Russia, China believes that Hong Kong, Taiwan, are natural parts of China. In practical terms, in 2014 China ran away from the agreement they made with Britain in 1984 with effect from 1997 on a country two systems. Since 2020 Hong Kong is ruled by a puppet government from China while democratic rights have been restricted.

Interestingly many US and European firms have suspended business relations with Russia following the invasion of Ukraine, yet continue to do business with China. It is foolhardy to think that business will temper the long-term geopolitical play of Russia or China.

What if Huawei was Russian, not Chinese

Imagine that Huawei was a Russian company and imagine how Russia could exploit Europe’s dependence on Huawei in the same way that they exploit the fact that Europe is dependent on Russian gas. Imagine Russia shutting down big parts of the mobile infrastructure Germany, Netherland, Czech Republic, Austria, and Poland, in the same way as they have done with gas in some countries. European policymakers don’t want to imagine it, but it is technically feasible.

Strand Consult’s report 2020 report “Understanding the Market for 4G RAN in Europe: Share of Chinese and Non-Chinese Vendors in 102 Mobile Networks“shows that the risk is serious not just Germany but across 102 mobile networks in 31 countries which have entrusted big parts of their networks to Huawei and ZTE. Even if Huawei opposed such a shut down, the Chinese government is set up to force companies to fulfill its wishes.

If Huawei were Russian, Europe would have a double problem. Putin could shut down the gas and mobile networks of many European countries and bring the economy to a halt. Germany and a number of other countries is as dependent on Chinese Huawei and ZTE as it is dependent Russian gas. This is not good for the national security, or Europe for that matter.

Russia and China have a lot in common

Russia and China are both authoritarian, totalitarian countries which downgrade human rights. They take same view of countries and regions such as Hong Kong, Taiwan, Crimea, and Ukraine. They do not care about the desire of the people of these places for self-determination. They will use various tactics to deter and ultimately crush opposition. Russia and China will employ hackers to attack free nations and others. Strand Consult has described

This threat is not theoretical. Millions of Europeans now experience invasion and its consequences.

Conclusion

Policymakers and mobile operators should ask themselves what will happen if China invades Taiwan like they said they consider, just as Russia invaded Ukraine. One of China’s strongest weapons and leverage against Western sanctions will be to shut down the telecommunications infrastructure of the countries that sanction China. Germany and other countries will doubled-bound as they are deeply dependent on Russian gas and Chinese ICT. Read Strand Consult’s October 2021 research note “Is your telecom infrastructure ready for General Secretary Xi to deliver on his Taiwan promise?”

Few if any nations or mobile operators had a plan to prepare for and respond to Russia’s invasion of Ukraine; they are similarly unprepared for a Chinese invasion of Taiwan. China can weaponize ICT just like Russia weaponizes gas. The consequences will likely be worse if China shut down Huawei’s network.

Moreover companies have not and will not respond uniformly as Strand Consult described in its April note, “Are your suppliers still doing business in Russia? – Huawei and Lenovo remain but their US and EU competitors have pulled out.” Consider France. Many French firms have withdrawn from Russia, but French Eutelsat still helps Putin distribute propaganda to millions of Russian households. French President Emmanuel Macron’s desire not to step on Putin’s toes is likely the reason they don’t want to stop Eutelsat’s massive aid to Putin. In France, it is more important to stop Russians’ access to French luxury goods such as Louis Vuitton, Chanell, Dior, and Yves Saint Laurent than Russians’ access to Putin’s propaganda.

As for China, it’s not too late to rip and replace Chinese telecom equipment and other Chinese ICT, but time is running out.

Learn more about Strand Consult’s expertise on China and security.

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