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Comment by augstein | Hacker News Reader

So can we all finally agree, that Huawei stating it has no ties to the Chinese government, was a lie after all?

This false claim by Huawei, is one of the most important reasons why Huawei isn‘t already banned here in Germany.[1]

And while we are at it, we should also ban US companies from providing critical infrastructure like this in Germany (and Europe). After Snowden, its clear that hardware from US vendors like Cisco should be seen as potentially compromised.[2]

1) https://www.businessinsider.de/trumps-huawei-verbot-ist-rein... 2) https://www.infoworld.com/article/2608141/snowden--the-nsa-p...

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I attended a talk by a successful Chinese entrepreneur who sold his company after only three years. We asked him why he sold it so early. He said there is no pure businesses (especially when you become big) in China . There are only “political businesses”. Everyone has to work with the government and plays dirty in order to survive. So he wanted out.

To be honest, as a Chinese, I don’t believe the claim that Huawei has no government ties. But I don’t think it’s what Huawei wants.

It depends how you define government tie. If it is about corruption, yes and maybe. Government are the biggest buyer in many cases, they have development funds to sponsor companies. Sometimes, having a good relationship with some officials may give you business or whatever. Companies in China won't be independent. They will be asked to help local economy. The government needs them to help reducing poverty for example, even big companies like Huawei they will need to send people to rural areas to help poor area to develop. They cannot just give money, they actually have to find solution for a village to develop. Having a good relationship with the government is essential for all big businesses around the world. Government is the biggest customer for Huawei after all.

China’s ability to fire the CEO of Cathay Pacific shows how irrelevant it is to ask who technically owns Huawei. What matters is whether the state has effective control, not legal control, and we know the answer to that for any company in or even near China.

- By Someone

Based on news reports in other countries it's a pretty consistent stance for Chinese diplomats to make the claim that if Huawei is allowed to compete in a free market manner it will be beneficial to trade relationship or if Huawei is banned for security reason it will damage trade relationship with China. The article did provide a background for such security concern from Danish defense ministry.

It's still entirely in the realm of possibility that the Chinese diplomat in question asked for unfair non-market advantage, but I find it quite unnecessary because Huawei's technology is already competitive on its own, why spend political capital for such minute economic gains? A more probable story, as has already happened in many other countries, is that local ISP chooses Huawei based on price and competitiveness and is blocked by government on security grounds, then Chinese diplomats step in to remove that block based on other stick and carrots.

For China Huawei’s trade with any country is meaningless from an economic standpoint. It’s in no way worth the kind of political capital their spending on it’s defense.

They either care for intelligence gathering or political reasons. Politically it could be anything from ideology to corruption and backroom politics. But, again the economic angle is hardly worth the effort when their risking a major backlash.

Meaning while Trump is trying to make other country buy more Boeing planes?

It sends a signal that the Chinese government will defend businesses based on China, which is valuable in itself. It could inspire more Chinese people to setup businesses in China and not migrate to the west, it could encourage businesses in other countries to compete with Chinese businesses on merit and not with threats by their governments etc.

If I recall, this is similar to how the US agreed to let China into the WTO back in ‘99.

Basically, China agreed to license CDMA from Qualcomm, despite already deploying GSM. Once China started paying, the US dropped its objections.

So I think it’s quite normal for politicians to advocate for their nation’s companies.

That's an interesting claim. Do you have any sources to back that up?

That was for CDMA2000, and to avoid paying more for 3G ( as well as 4G ), they developed TDS-CDMA and TDD-LTE.

Nothing in China is unrelated to the governement.

The social credit system for businesses is there just for this.

Just observe how Apple has changed since that launched.

> And while we are at it, we should also ban US companies from providing critical infrastructure like this in Germany (and Europe). After Snowden, its clear that hardware from US vendors like Cisco should be seen as potentially compromised.[2]

Genuine question - What are the big European network infra equipment makers? You only ever hear of US and Chinese companies like Cisco and Huawei operating in this space.

Ericsson, Nokia

Ericsson and Nokia Networks, especially in the mobile/5g space.

Alcatel is a competitor to Cisco. Most of the Cal State University system runs on Alcatel after some Cisco shenanigans.

Others mention Alcatel, Ericsson, Nokia. How much of their equipment is made in China? How hard would it be to compromise the manufacturing process or loading of firmware to include backdoors?

Much (all?) of former Alcatel/Nokia gear is not made in China. A backdoor is highly unlikely.

I don’t know of any US company making LTE or 5g hardware. I think it is mostly European. Much of the the networking hardware is US but much of all networking is Broadcom based now.

Ericsson, they had or still has the best stuff. But just like any big companies, management likes to kill the company for their own good. Early 2010s when Huawei becomes a threat to their business ( that was before Huawei was even known by general public ), stocks and earning were down, they finally woke up.

But today they are still much more expensive than Huawei, AND their bet on Intel 10nm Custom Foundry didn't help.

Again, blame Intel.

I don't agree with you that US vendors should be seen as potentially compromised. But I strongly support that European vendors should be used in Europe. It would be a disaster if Cisco is the only choice. We need at least a healthy rival.

Ha. Prism anyone? C’mon. Have you ever wondered why the only Chinese smartphone vendors who are allowed to sell phones in the US are the ones who agree to implement Qualcomm chipsets?

Sure but the comment looks like it was more about enterprise networking. Both Europe and the US have good companies to choose from and we’ll be worse off if they mutually block each other out. We’re better off if European and US companies request the option to audit the code.

I agree Cisco specifically is suspect but surely there are better solutions than blackballing all American companies. I say this because Europe can force US companies to release their code to them as Microsoft does and we’d all be better for it.

"And while we are at it, we should also ban US companies from providing critical infrastructure like this in Germany (and Europe). After Snowden, its clear that hardware from US vendors like Cisco should be seen as potentially compromised"

The relationship between the US and Europe for many reasons is different, most specifically, the US will not use 'Cisco spying' to steal German companies IP, or to otherwise screw up Germany.'

In the bigger picture, the US provides the first and last line of defence to Europe. Putin is actively trying to 'pull a Crimea' in the Baltic states and only US led activities are keeping them out. That's the top of the iceberg.

Also the 'Cisco spying' that is done by the US, mostly in the Middle East etc. actually has a lot of security value for Europe.

Of course, Europe is way behind on many tech fronts and would be hurt badly by being cut off by America (you don't think there will be repercussions?) though Europe doesn't need anything made in China ... they need China as a customer for stuff.

There are 100 consumer related issues to be addressed between US/EU before the possibility of Cisco spying comes into question.

> So can we all finally agree, that Huawei stating it has no ties to the Chinese government, was a lie after all?

Even if it was it's like saying Boeing has no ties to the US government. Yeah right.

Yes because China and US have the same value system. Both countries are interchangeable even though one has extensive history of practicing free speech while the other locks their citizens up for speaking up.

I think his point is that there's no point in discussing whether or not there are ties, but rather the degree of ties.

Just like there is a degree of difference between China and the US, and it's not as different as you may have been taught to believe.

Just as a point of logic: even if we are 100% sure that there is no funny business going on with ownership of Huawei (which we don't know), we should just assume the govt interferes because the incentives to do so are strong and the mechanisms do so already exist (presumably, Huawei has a "red machine").

Believing the Chinese govt don't interfere is attributing some fairly superhuman levels of self-control to the govt...even in a system with controls over govt, that would be unlikely...in a system with no controls, it is a little ludicrous.

How these phone systems work is that Huawei has access to them to send updates and can remote in. Same with American or European telecom manufactures. In case of a war or conflict the Chinese government can order Huawei to shut down systems they have installed in foreign countries anytime. So while it might be an economic objective to sell more Huawei systems there is a security angle to that for every Huawei phone system running that it can be shut down remotely or sent a bad update that shuts it down. Which would be magic if a country aligns with the United States against China in some sort of conflict even if that country never goes into battle it will still be punished by China in a way that will take millions of dollars and probably months to recover from.

So what you are saying is that components of the 5G network have their management interfaces connected to the internet and some kind of auto-update on that downloads updates from Chinese servers?

I’m not entirely convinced of your expertise.

Pretty much, I can't find the reference article now but this article below is good for just about anything that is going to be remotely managed by China:

https://www.scmp.com/week-asia/politics/article/3038655/chin...

There would be a management network to vpn into and a server for storing images on. It would require planning but he’s right.

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