Tuesday, August 20, 2013

Too Big to Trust or Fictionalized International Corporate Espionage?

Is the telecom giant, Huawei, an agent of the Chinese government?

Huawei network equipment is used by one-third of the world's population and it's sales in 2012 were in excess of $35.4 billion.

The formation of the company, it's quick growth, it's financials, customer contracts, it's global reach, its core business - telecom, network and network security products, its founder, the founder's life philosophy, his life style are open now for deeper scrutiny.

Does Huawei's networking gear have the ability to cause security breaches on the world's networks? Can it glean a nation's most precious and therefore its most deadly secrets? I imagine the answer to that being a yes, at least technically.

While the details of this case and the company would be interesting, I think what would be more constructive is assessing this via a framework of international and economic affairs.

  • China has been financing US debt for a while. 
  • Our economies are interlinked.
  • Both sides have been accused of cyber spying.
  • Both sides have companies, which can wreak havoc in terms of network disruption, security breaches to gain strategic information.

Then how would we classify this particular instance and this particular company, as being a one off case, which requires that much more investigation and scrutiny and the possible refusal to a key market?
  • An all pervasive product that has the potential to destroy an important ecosystem? An analogy that comes to mind is of the neonicotinoid pesticide that is suspected to destroy the bees and hence put the agricultural ecosystem at risk. 
  • Suspected or proven nefarious intent on the part of the country originating the product or service.
  • The product or service emanating from a country or region traditionally known to be hostile or at odds with the trading country.
  • A direct competitor to a incumbent industry player with economic and political consequences, such as loss of jobs, lobbying pressures, etc. as in the case of solar panels and the dumping allegations and the anti-dumping duty . 
However, while we are talking about security, Our water treatment and distribution systems are just as vulnerable Our transportation systems up until recently have proved to be vulnerable Our state secrets might not be as safe as previously thought.

We have to be careful about invoking trade protectionism in the name of national security and economic security, especially, when the same can be done to our products and technologies.