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Despite Trump deal, China’s ZTE, Huawei to face closed doors in US market
WASHINGTON, June 10, 2018 (BSS/AFP) – Chinese telecoms companies like ZTE
and Huawei face severely tightened access to the US market despite the Trump
administration’s deal this week to give ZTE a lifeline after it agreed to a
steep fine.
Amid persistent worries that their phones, routers and other products will
open a path for Beijing’s spying on the United States, analysts say the US
government will remain broadly closed to products of the two companies and
that the US telecoms industry will remain under pressure to avoid their
equipment.
Indeed, four Democratic and Republican senators, criticizing the deal that
will permit ZTE to resume purchasing US electronics components, proposed
legislation Thursday for an outright ban on the government buying products
and services from both ZTE and Huawei.
“Huawei and ZTE pose a serious threat to America’s national security.
These companies have direct links to the Chinese government and Communist
Party,” said Republican senator Marco Rubio.
“Their products and services are used for espionage and intellectual
property theft, and they have been putting the American people and economy at
risk without consequence for far too long.”
But experts say the move could hinder the growth of next-generation 5G
wireless networks in the United States. The two Chinese companies are poised
to become global leaders in the 5G rollout, just beginning this year in
several countries.
“The overall concern is that these companies are close to the Chinese
government,” said Paul Triolo, a China security specialist at the Eurasia
Group.
With fifth-generation mobile technology, he said, “the concern becomes
magnified” because the technology is heavily cloud-based, potentially leaving
sensitive data accessible by the service provider.
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– No proof of security threat –
Indeed, US officials have repeatedly suggested that the two companies
could design their equipment to allow Chinese intelligence to hack into
American networks and siphon off personal data and communications from
cellphones.
A 2012 congressional report said the use of Huawei and ZTE equipment in US
critical infrastructure “could undermine core US national-security
interests.”
In February, six top intelligence and security chiefs told a Senate panel
they would not use equipment from either company.
“We are deeply 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,” said FBI Director
Christopher Wray.
And in May the country’s top counterintelligence official, William
Evanina, likewise confirmed that ZTE phones are too risky.
The warnings come at a time of growing concerns over Chinese technology
and spying.
Facebook was excoriated this week for having allowed Chinese smartphone
makers, including Huawei, to access a broad range of Facebook users’ personal
data.
The threat is plausible. Many intelligence experts believe that the US
government has asked American technology vendors for backdoor access to
technology. And US intelligence is constantly pressuring Silicon Valley to
create ways they can get around encryption apps.
Still, no one has publicly detailed any concrete examples of such attempts
by Huawei or ZTE.
“So far there is no smoking gun on these companies,” said Triolo.
But one recent example shows the risks.
In 2016, US security consultant Kryptowire discovered that millions of
Android smartphones made in China contained firmware that relayed their data,
contacts and texts back to a Shanghai marketing company every 72 hours,
unknown to users.
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The Shanghai company, which counts Huawei and ZTE as its customers, said
the function was intended to monitor how the phones were used, and was not
supposed to be installed on units sold in the United States.
But it was, and no one could be certain how the data would be employed.
“We can’t know the intention of the persons who actually created the
vulnerability,” said Tom Karygiannis, vice president of Kryptowire.
“Is it an accident or is it there intentionally?”
– Proving a negative –
But Karygiannis said the danger is near-impossible to avoid in consumer
electronics, since all devices have risks, and an overwhelming number of them
are manufactured in China.
It’s impossible for a consumer to test the firmware on a phone, which is
often updated automatically. Only large enterprises can really vet the
technology they are getting, he said.
Triolo said network operators can control what’s on their equipment.
The problem is proving it’s clean.
“It’s really hard for the companies to prove the negative of this,” he
said.
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