Huawei Chairman Willing To Sign A 'No-Spy' Deal With The United States

Jun 4, 2019
Originally published on June 7, 2019 8:57 am

A top Huawei executive said Tuesday that the company is willing to sign a "no-spy agreement" with the United States to reassure U.S. leaders who say the company's technology could be used for surveillance.

The offer is similar to proposals the Chinese tech giant has made to the United Kingdom and Germany, and it comes after weeks of intense pressure from the Trump administration.

"We are willing to sign no-spy agreements with countries," said Huawei Chairman Liang Hua at the company's headquarters in Shenzhen, China, when asked specifically if Huawei would sign a "no-spy" agreement with the U.S. "But since the U.S. has not bought from us, is not buying from us, and might not buy from us in the future, I don't know if there is such an opportunity to sign such an agreement."

Liang made the comments while speaking with a small group of U.S. journalists who were visiting with the China-United States Exchange Foundation.

While it would be the first such public offer of an agreement to the United States, Liang stressed the conditions might not exist for such a deal.

Liang accused the U.S. of inappropriate conduct, while at the same time struck a conciliatory tone — a response reflecting the level of exasperation currently felt by the Chinese tech giant.

"It is inappropriate to use political means to disrupt an industry," he said.

Huawei is one of China's most successful tech companies and has a global footprint. It's one of the world's largest smartphone makers, behind Samsung but ahead Apple for early 2019. It's also one of the leading telecom providers of mobile wireless 5G networks, the infrastructure necessary for a future of driverless cars, smart cities with smart traffic lights, and smart factories.

But the company is facing a growing backlash from Western countries because of concerns over the security of its products. U.S. leaders have said Huawei's networks and phones could be used by the Chinese government and leave users vulnerable to privacy breaches

This culminated last month with the U.S. Commerce Department adding Huawei to its "Entity List," which bars American businesses from selling technology to Huawei without government approval. The Trump administration has delayed the ban from taking full effect until later this summer.

The United States is also pressuring other countries to ban Huawei on security concerns. Secretary of State Mike Pompeo warned Switzerland and the Netherlands on Monday about working with Chinese technology. And President Trump was expected to discuss Huawei during his visit with Prime Minister Theresa May on Tuesday.

In the meantime, Huawei has resorted to a blitz of media interviews to share the company's view that it's being unfairly used as a pawn in the high-stakes U.S.-China trade talks. Huawei is also aggressively fighting the United States. Last week, the company filed a legal motion in a U.S. court to declare the Trump administration's efforts to ban its equipment as unconstitutional.

Huawei has become the most visible target of the U.S. government in the clash over trade with China. Last year, tensions reached a fevered pitch after the U.S issued an arrest warrant for Huawei Chief Financial Officer Meng Wanzhou, on charges related to breaching American sanctions against Iran, among other allegations. Meng, the daughter of Huawei founder and CEO Ren Zhengfei, is under house arrest in Canada and fighting extradition to the United States.

The ban on U.S. tech companies doing business with Huawei is expected to drastically curtail demand for Huawei phones in the future. Most Huawei phones run on Google's Android operating systems.

Huawei has a backup plan to move forward with its own version of computer chips and operating systems to decrease its reliance on on U.S. tech companies, said economics professor David Daokui Li from Tsinghua University.

Huawei's Liang also said that in the long term, the company will develop its own operating system similar to Android. But that will take some time.

While there is no doubt that the U.S. government's ban, if imposed, will hurt Huawei in the short term, some experts in China say it might strengthen the company's hand over the long term.

"What President Trump is doing is waking the sleeping capacity of Huawei," Li said.

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AUDIE CORNISH, HOST:

The Chinese company Huawei sits right in the middle of the escalating trade war between the U.S. and China. Huawei is one of the biggest tech companies in the world, and it's poised to extend its global reach. The U.S. doesn't want to see that happen.

NPR's chief business editor Pallavi Gogoi visited the company's headquarters. She spoke with its chairman, and she joins us now. And Pallavi, what did you hear?

PALLAVI GOGOI, BYLINE: So today, as part of a small group of visiting U.S. journalists, I was at Huawei's beautiful leafy campus. We met with Chairman Liang Hua, who had a surprising message for American leaders who worry that Huawei technology would be used for spying by the Chinese government. In fact, I asked him whether the company would be willing to sign a no-spy agreement, which is basically like a promise that the Huawei technology would not be used for spying. And he said yes. He'd be willing to do that with any country.

(SOUNDBITE OF ARCHIVED RECORDING)

LIANG HUA: (Speaking Chinese).

GOGOI: What he's saying is that he is skeptical that such a deal might not necessarily be possible, specifically with the U.S. And he said the U.S. has not bought anything from Huawei, is not buying anything. And that's the reason why he doesn't see an opportunity to sign such an agreement, specifically with the U.S.

CORNISH: Remind us what this is all in response to.

GOGOI: So a lot of things, right, Audie? In recent weeks, Huawei has come under intense attack from the U.S. government. Just last month, the U.S. added Huawei to its, quote, unquote, "entity list," which bars American businesses from selling technology to Huawei without government approval. That hurts Huawei at its core. For instance, Google won't be able to supply Huawei with its Android operating system, which you use to get, you know, for Google search or to get Gmail. But really, when you think about it, all of this began last year when the U.S. and China were clashing over trade.

In the midst of all that, the U.S. issued an arrest warrant for Huawei chief financial officer Meng Wanzhou on charges that Huawei's breaching American sanctions against Iran, among other allegations. Now, Meng is not just any, you know, CFO. She's also the daughter of Huawei's founder and CEO and is now under house arrest in Canada. Huawei has maintained consistently that the arrest is all about politics and stymieing Huawei's ambitions.

CORNISH: Why is this company at the heart of this trade war?

GOGOI: So Huawei is one of China's most successful tech companies. It is the world's second-largest smartphone maker, behind Samsung, even ahead of Apple. But more significantly, Huawei is expected to be a world leader in 5G. That's a revolutionary technology that will fuel the future of, you know, things like driverless cars, smart cities, smart traffic lights and what have you. The Trump administration believe that trade is about dominance, and China is showing - China and Huawei is showing to be ahead in this key area.

CORNISH: In the meantime, what's next for this company?

GOGOI: There is no doubt that if the U.S. ban is imposed, it will hurt Huawei in the short-term. However, there are some experts who say that it might strengthen Huawei's hand over the long-term. Huawei has a plan B to make its own computer chips and operating system in the coming years.

Now, there was another development today that could signal an easing of tensions between the U.S. government and Huawei. President Trump was in London, and he met with Theresa May earlier today. In that press conference, he was asked specifically about the U.S. warning European countries just this week of dire consequences, you know, when it comes to sharing intelligence if those countries don't ban Huawei from their 5G networks. President Trump sounded conciliatory, actually.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT DONALD TRUMP: No, because we're going to have, absolutely, an agreement on Huawei and everything else. We have an incredible intelligence relationship, and we will be able to work out any differences.

GOGOI: But as we have learned, the devil really is in the details. We'll have to find out, you know, what such an agreement would look like. So stay tuned.

CORNISH: That's NPR's Pallavi Gogoi reporting on Huawei in China. Thank you for speaking with us.

GOGOI: Thank you, Audie. Transcript provided by NPR, Copyright NPR.