An explosive report published early last month detailing how Chinese intelligence managed to infiltrate hardware used by dozens of US companies and government agencies, from Apple to the Department of Defense, made clear one simple, if disturbing, fact: The US is losing the race to contain China’s sprawling intelligence apparatus as it becomes increasingly embedded in the global tech and telecommunications infrastructure.
But the Trump Administration is doing everything in its power to change that. And after threatening the future of one Chinese telecoms supplier (ZTE), the US has been pushing its allies around the world to stop using equipment from another mainland firm with an even larger global reach: Chinese consumer tech and telecoms giant Huawei.
The news sent Asian markets reeling on what was expected to be a quiet day, given the US Thanksgiving holiday: Chinese stocks fell, with the Shanghai Composite tumbling 2.7%, sending it to the lowest level since the end of October, while the ChiNext index plunged over 3.3%.
According to the Wall Street Journal, the US government has launched an “extraordinary outreach campaign” aimed at international telecom companies and friendly foreign governments to try and convince them to drop Huawei as a supplier over concerns that equipment produced by the company could be vulnerable to Chinese spies. But beyond the warnings, the US is even said to be considering financial incentives for telecoms firms that abandon Huawei and switch to a US-based or Western-based supplier. The purpose of the push is to stop Huawei components from being used in commercial and government networks over fears that the Chinese government would easily be able to tap into communications flowing through those channels.
American officials have briefed their government counterparts and telecom executives in friendly countries where Huawei equipment is already in wide use, including Germany, Italy and Japan, about what they see as cybersecurity risks, these people said. The U.S. is also considering increasing financial aid for telecommunications development in countries that shun Chinese-made equipment, some of these people say.
One U.S. concern centers on the use of Chinese telecom equipment in countries that host American military bases, according to people familiar with the matter. The Defense Department has its own satellites and telecom network for sensitive communications, but most traffic at many military installations travels through commercial networks.
