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Time for Huawei to emigrate?

9 April 2019

Huawei has become one of the largest and most powerful manufacturers of communications technology in the 21st century.

However, that dominance is starting to fall apart... not because of competitors rolling out better, faster, cheaper products... but because Huawei is Chinese.

With communications technology now forming a part of every nation's "critical infrastructure", the choice of which manufacturer to run with involves a lot more than just price, performance, support and availability. In this era of state-sponsored cyber-attacks and the growing unspoken cold-war between East and West, it's not so much who the manufacturer is but where they're based that matters.

From that perspective, Huawei is at a huge disadvantage when compared to most of its primary competitors and that disadvantage is really starting to hurt.

It seems that Pakistan is the latest country to say no to Huawei equipment, this time as the supplier of wi-fi modules for a public CCTV system.

Of course we already know that the NZ Government has been told (by Five Eyes) to tell Spark that they won't be able to use Huawei gear to build their new 5G network and in the UK, the company has effectively been crossed off the options list as well.

For its part, Huawei claims that allegations it is in league with the Chinese government and therefore its equipment is untrustworthy are baseless. Those pleas are obviously falling on deaf ears however.

This whole situation has become so political and nasty that the company's CFO was arrested earlier this year in Canada and is currently being extradited to the USA.

So where to from here for Huawei?

Well it strikes me that the logical best step is for the company to vacate from China.

Perhaps they could come to New Zealand and set up shop, moving its administration and production facilities to good old GodZone.

Imagine that... a huge boost to our economy, the opportunity to sever links with the Chinese communist government and what amounts to an open door to the massively valuable Western markets.

Will that happen?

Of course not -- but it's nice to dream.

The reality is that this is as much an economic war as it is a political one.

Whilst there can be little doubt that the Chinese government is involved in state-sponsored cyber-warfare and has direct access to Huawei's technology (sufficient to include back-doors or the ability to disable installed systems with the ping of a packet), perhaps one of the most active factors in this whole issue is USA's protectionist attitude to trade.

There are plenty of US companies that would love to sell their communications products to the Western world but find themselves out-gunned by Huawei both on price and performance. What better way to give these US-based manufacturers an edge than to vilify your competition and effectively disqualify them on the basis of security?

Let me put my opinion quite bluntly -- I do not trust the Chinese government's involvement in Huawei but I trust the US government even less. The term "honest politician" is perhaps the best example of an oxymoron ever seen.

So it looks Huawei's strength is also its downfall. The environment for tech companies in China is awesome. Plenty of well qualified engineers, readily available capital (both private and government), cheap labour and access to a mass of top-end subcontractors.

However, so long as they're rolling out products that will be integrated into "critical infrastructure" and so long as the Chinese government retains totalitarian control then those products will never be trusted.

Hell, it's not like they're a reputable, uber-secure company like CISCO is it? (note for the humour-impaired: that was sarcasm!)

Should Huawei give up on developing and manufacturing "critical infrastructure" products? Is it time for them to cut their losses and focus on products that won't be ankle-tapped by Western paranoia or the agenda of equally dubious governments such as those of the USA, Britain, Australia, Canada and NZ?

You tell me!

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