A Rare Look Inside Huawei, The Shadowy Chinese Tech Company Accused Of Spying On America

Huawei CEO Ren ZhengfeiHuawei CEO Ren Zhengfei

Photo: YouTube/60Minutes

Huawei Technologies is one of the world’s largest makers of high-speed wireless telecom equipment. The Chinese company is also at the centre of an American political storm.Earlier this month, the House Intelligence Committee issued a report warning U.S. companies to avoid doing business with Huawei and another top Chinese tech firm,  ZTE.

Today a White House report said  that there’s no evidence that Huawei has actually spied on any of its customers, but warned that its gear is vulnerable to hackers.

U.S. officials are concerned that Huawei is a Trojan horse for the Chinese government. They think that the Chinese government can order Huawei to let it spy on its  U.S. customers  or even to shut down the telecom system if it decides to conduct “cyber war.”

Huawei officials claim that its just another international company trying to earn more U.S. business. But the company is secretive, with ties to the Chinese military and a mysterious founder.

Huawei also has a long, nasty history with Cisco, an American competitor. In 2003, the company was found to have copied Cisco’s technology. Motorola also had similar complaints with Huawei. Cisco CEO John Chambers said last April that Huawei is the company he fears most.

“60 Minutes” was given a rare inside peek at Huawei offices in China and the U.S.

Huawei CEO Ren Zhengfei is as elusive as his company

At the centre of the controversy is Huawei CEO Ren Zhengfei. He rarely speaks publicly.

He was a major in the Chinese army specializing in telecom research. When he retired, he founded Huawei with a few thousand dollars savings and no help from Chinese government, the official story goes. But U.S. officials don't believe that. They say Huawei's 25-year rise to the top was heavily funded by the government.

Huawei's headquarters is a beautiful, modern campus in Shenzhen.

Huawei, a private company, says it is 'employee-owned.'

One of the things that has U.S. officials so nervous is how secretive the company is about its management structure. Even when a Huawei executive was questioned by Congress as part of this ongoing probe, he wouldn't reveal much about that.

Look but don't talk

'60 Minutes' was given a tour of the Chinese headquarters but was not allowed to talk to anyone there.

It matters that Huawei's in the telecom business

The U.S. does tons of business with China. But telecom is considered critical infrastructure. There are a lot of telecom providers, but anything that gives bad actors the ability to attack or manipulate communications is a concern.

Huawei makes low-cost gear

Huawei's 4G, or fourth-generation, wireless equipment is known to be good and less expensive than competitors. This is has helped it grow to become the biggest telecom provider in the world, with $32.4 billion in revenue--70% from outside of China, it says.

U.S. companies can't compete

It is one of three companies worldwide to make all the pieces for a full 4G network. None of those are U.S. companies.

In addition to Huawei, 4G gear is made by Ericsson, a European company, and Alcatel-Lucent, a Franco-American company that owns Bell Labs. Cisco also makes some 4G gear, but not the whole product line needed.

Huawei has been accused of stealing its product designs

Chinese employees assemble gear at the facilities, but did they design it?

U.S. companies like Cisco and Motorola have long accused Huawei of illegally copying them. Huawei was found to have copied Cisco gear, practically bolt-for-bolt, back in 2003. It settled a lawsuit and changed its design.

Huawei says its been unfairly vilified

Huawei claims that the fears about it are not only unfounded but bad business. The company claims it buys $6 billion of American-made components every year and is simply another international company trying to do business in the U.S.

U.S. officials say the gear isn't safe for other reasons

Huawei also makes other network equipment that competes head-to-head with Cisco in enterprise data centres. This gear is less expensive, but also less fancy. However, new forms of software-based networking are being developed that could make a lot of U.S. companies prefer low-cost Chinese network switches over Cisco's pricier ones.

Cisco has a lot to gain if U.S. companies are scared off from buying from Huawei.

After an 18-month review on Huawei, a White House report said there was no evidence of spying but it still warned U.S. companies the gear was was risky for other reasons, like security holes that hackers could exploit.

The Chinese Communists have an office at Huawei's headquarters

U.S. officials say that Chinese companies are not the same as other international companies because the Chinese government, particularly the Communist Party, is the ultimate ruler.

The Communist Party even has an office on site at Huawei, '60 Minutes' reported. That's not unusual in China, where the party is interwoven into daily life.

Rep. Mike Rogers strongly believes U.S. companies should not buy from Huawei

Congressman Mike Rogers (Republican), a ranking member of the House Committee on Homeland Security, says U.S. companies should not buy from Huawei.

'If you are looking at Huawei, I would find another vendor--if you care about your intellectual property, if you care about your consumer's privacy and you care about the national security of the United States of America,' he told 60 Minutes.

Rep. Dutch Ruppersberger also says Huawei is a dangerous choice

Congressman Dutch Ruppersberger, a Democrat and the ranking member of the House Intelligence Committee, also thinks Huawei is a threat.

'In the telecommunications world, once you get the camel's nose in the tent, you can go anywhere,' he warned. He's concerned that the Chinese government could use Huawei to intercept messages and conduct cyber war.

Huawei's U.S. campus is in Plano, Texas

Huawei employs several hundred people in the U.S. already, most in its Plano, Texas campus, but also in the Bay Area.

The U.S. face of Huawei, Bill Plummer

Although the CEO remains elusive, Huawei's U.S. face is its vice president of external affairs, Bill Plummer.

He hails from Nokia where he was a top public-relations professional.

It has a few U.S. customers, too

U.S. officials have managed to stop some big telecom deals involving Huawei including a $5 billion deal from Sprint for 4G gear.

But Huawei has still won a few U.S. customers, particularly in rural areas like parts of Kansas.

Executives at the Kansas telecom said that its new Huawei network offers the fastest Internet speeds in the country and they don't buy into the government's fears.

Huawei is also trying to win American hearts through advertising

Huawei is determined to win business in the U.S. and has begun to run its own PR campaign here, including plenty of TV commercials.

Ren Zhengfei isn't beloved by Huawei's U.S. employees

CEO Ren Zhengfei might want to raise his profile in the U.S. for a lot of reasons--including improving his reputation among his U.S. employees. He's only got a 44% approval rating on Glassdoor.

You can protect yourself from telecom spying

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