Intelligence: China Dodges Accusations

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August 10, 2013: Chinese telecommunications equipment manufacturer Huawei continues to be dogged by accusations that it is acting as an economic and military espionage agent for the Chinese military. When pressed about this, U.S. intelligence agencies are reluctant to give any details outside of classified hearings. But it is pointed out that Huawei would be a big help to Chinese military planners and commanders by simply sharing details of foreign Internet and phone systems it had installed or helped to build.

Huawei was founded 25 years ago, by a former Chinese army officer (Zhengfei Ren) who was forced out of the military during a shrinking (by half a million troops) of the armed forces in the early 1980s. Ren joined the Communist Party in 1978, after years of trying (his father had worked for the nationalists) and has always maintained close relationships with senior government officials. That is mandatory if you are going to build a company as large as Huawei.

Ren built Huawei into a $29 billion (annual sales) company. Along the way Huawei has also been frequently accused of stealing technology, in addition to carrying out espionage for the Chinese military. Some Huawei employees have made accusations but no one has yet provided hard evidence.

Huawei spends a lot of money on research and is one of the largest producers of patentable technology on the planet. With that, there are bound to be some lawsuits. But for a company its size, Huawei has had relatively little trouble. So either Huawei is a master at corporate and military espionage (they have a reputation for strict internal controls and aggressive competitive intelligence work) or most of the accusations are more paranoia than plausible.

However, it's a fact that all Chinese companies, especially the large tech outfits, are expected to cooperate with Chinese intelligence agencies. That's not paranoia. And as a result of that, Huawei has been blocked from bidding on major jobs in Australia and the United States.

 


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