Ren Zhengfei grew up in poverty in China during the famine triggered by chairman Mao Zedong’s Great Leap Forward economic campaign in the late 1950s. The son of a college master, he and his family had to forage for wild roots and castor beans to survive.
From such lowly beginnings, he went on to set up an electronics company that was to become Huawei — translation: “China is Great” — and develop it into the world’s biggest, most controversial, telecoms equipment manufacturer and the No 3 maker of smartphones behind Apple and Samsung.
Huawei and GCHQ
In 2010 British government officials were grappling with some questions. Was having Huawei’s gear in the telecommunications network a security risk? If so, could the risk be mitigated? Huawei had already been in major UK networks for years, having won a spot in BT’s nationwide broadband upgrade in 2005, but London had been reconsidering its stance.
“The British government said, ‘Look, we don’t want you to put any more Huawei equipment into UK networks’, ” a Huawei executive recalled. “They said, ‘It’s not possible. It’s a security risk for the UK.’ ”
After intensive efforts by Huawei to find a solution, British officials were convinced that the risk could be mitigated. Huawei’s solution was something called “the Cell”. The Cell was located in a nondescript office complex on the outskirts of Banbury, a quiet English town known for its spiced currant cakes.
Advertisement
The Huawei facility featured all manner of security precautions. “It had a door that was bombproof,” recalled one person who worked there and spoke on condition of anonymity. “There were no phones inside the secure area … All the servers that contained the source code were in locked cages, and only one person had the key to the cages.”
The official name, the Huawei Cyber Security Evaluation Centre, was a mouthful, as was the acronym, HCSEC, so people had taken to calling it “the Cell”. It was a centre where UK officials could look under the hood of Huawei’s gear to see for themselves if it was safe, the first such centre that Huawei had opened in the world. In November 2010 the company’s senior vice-president flew over for the launch.
• Huawei deal would let fox loose in chicken coop, says GCHQ
The Cell wasn’t too far from Cheltenham, where Britain’s signals intelligence agency, GCHQ, the British equivalent to the NSA, was based. This was convenient. What Huawei’s press release about the Cell didn’t mention, however, was just how deeply involved GCHQ was in the operation. “It was more like an arm of the British intelligence agencies, as opposed to being Huawei itself,” said Chris Powell, a former UK government cybersecurity researcher who began working at the Cell in 2016. “People would say, ‘Oh, you’re trusting Huawei to check its own code’. And I just thought to myself, If only you knew.”
Huawei technically owned the Cell and supplied the funding, but GCHQ ran the show. Without clearance, Huawei executives couldn’t even access the centre. The intelligence agency vetted prospective employees, requiring all staffers to have “Developed Vetting” security clearance, the level required for members of the British intelligence services.
Advertisement
It meant that they were cleared for frequent, uncontrolled access to classified information. GCHQ gave new staffers a security briefing and ensured that they signed the Official Secrets Act. The first managing director of the Cell was Andrew Hopkins, a former deputy director for GCHQ and a 40-year veteran of British intelligence.
Other former GCHQ agents were the Cell’s researchers. Some in London argued that the Cell’s staff should be employed directly by GCHQ, not put on Huawei’s payroll. At any rate, according to Powell, there was no contest when it came to loyalties: “People were, like, infinitely more loyal to the British government than they were to Huawei.”
The Cell was soon finding vulnerabilities and pushing Huawei to fix them. One team looked at each product, one by one, while another looked for weaknesses in the broader systems. The Cell’s researchers could find problems in the code, but they had little visibility into why these aberrations were there. “It’s very difficult to tell the difference between a back door and a mistake,” Powell said. “Every organisation has bugs. And Huawei, at least at the beginning, had a significant amount of bugs— beyond anyone else.”
One such issue, according to someone who spoke on condition of anonymity, was devices all being set to the same default password. This person said that UK authorities received the Cell’s reports before Huawei did. There was more than a little dispute among UK officials about just how effective the Cell was at guaranteeing cybersecurity. But the existence of the centre did a lot to reassure customers anyhow, and not only in the UK.
“Since we set up this security centre, I think it’s a great help for our business growing not only in the UK but also the European market and other countries,” Huawei’s chairwoman, Sun Yafang, said in a speech during a visit to Britain.
Advertisement
Vince Cable, UK secretary of state for business, innovation, and skills during this time, later recalled that the government largely felt that any risks from Huawei’s gear were containable. “There was some discussion, mainly from one or two conservative backbenchers who said that we were taking too many risks. But it wasn’t very loud,” he said.
Huawei would continue to make extra efforts to win over the UK, seeing the market as its key foothold in the West. It would pour funds into hosting British politicians, seeking their favour. In late 2012, Channel 4’s Dispatches would report that Huawei had spent more than £90,000 ($144,000) over nearly two years on trips for British members of parliament, according to the politicians’ public filings of financial interests.
The internal Chinese Communist party
As Huawei grappled with how to build a modern Chinese company, one of the biggest things that made it different from a western company was the role of the party. In the Mao era, the Chinese Communist Party had governed all areas of life and work in the nation. The party was now ceding many decisions to private businesses, but it still expected to have a role.
The head of a company’s party apparatus was called the party secretary, and this official was expected to keep the company in step with national priorities, as well as to provide ethical oversight of the staff. Huawei set up its internal party branch in May 1996, demarcating a formal role for the party within the company.
Ren himself was party secretary at first. Not long after, Huawei upgraded its party branch to a party committee, and Madam Chen Zhufang, who Ren knew from when he was a manager at South Sea Oil, was appointed party secretary. It was still unclear how big of a role a party committee was supposed to be playing inside a private enterprise. Chen told the scholar Tian Tao that she asked around at other companies for advice, including at the American company Motorola, which had set up a party committee in its China outpost. “I thought a long time about how a party committee should work in a private company,” she said.
Advertisement
With her halo of snowy hair, Chen served as something like a stern grandmother at Huawei. In a nation that was officially atheistic, the party took on the church’s role of ethical guidance. Chen often lectured the young engineers on morality. She told them that they would suffer from karma if they stole intellectual property from the company or otherwise abused their positions. She reminded them of their broader patriotic mission and played an important role in molding Huawei’s company culture and infusing it with the Chinese Communist Party’s themes of patriotism, struggle for the greater cause, and self-sacrifice.
In 2007, Huawei’s management told staff of a change: the company’s Communist Party committee now had veto power over executive appointments. The move was controversial. Foreign governments were wary of the party’s role in Chinese companies: by having a say in promotion decisions, a party committee could theoretically assist in embedding intelligence agents across a company’s operations.
Huawei’s leadership said that this new “separation of powers” was meant to stem nepotism and corruption. Executives could no longer unilaterally make the decision to promote a subordinate. They had to seek a green light from the human-resources department and party committee. The party committee could veto planned promotions or even “impeach” unfit executives after the fact.
It was unclear who had suggested this idea of giving the party committee a say in Huawei’s executive appointments — whether it had originated from Ren Zhengfei’s team or been imposed upon Huawei by external party authorities. In any event, the move aligned with a push from Beijing in the mid-2000s to give the party a larger role in private enterprise.
Uighur-spotting AI
By late 2017, there were growing signs that something was very wrong in China’s far-west Xinjiang region. Guards with machine guns manned checkpoints in and out of cities, and travellers had to have their faces scanned and walk through full-body scanners. On the streets, pedestrians were stopped by police at random to have their phones checked for illegal political or religious content.
Advertisement
Officials warned that even modest expressions of Islamic faith, such as growing a beard or wearing a headscarf, would be scrutinised as potential signs of extremism.
And a growing number of people — specially members of the Uighur ethnic minority — were being hauled off without trial to prison-like sites called “re-education centres”.
Estimates of how many people were detained ranged from the hundreds of thousands to more than a million. Reports of torture, abuse and deaths trickled out.
• Tech giant Huawei ‘helps to persecute Uighurs’
Under the banner of counterterrorism, Xinjiang had become the world’s most repressive high-tech surveillance state.
And Huawei had helped build it.
In Xinjiang, and across the nation, Huawei was hawking a fulsome portfolio of advanced surveillance technologies, built in co-operation with hundreds of start-ups and other partner companies.
There were smart glasses that police could wear on patrol to scan crowds for faces on a watch list. There were high-definition police body cams that streamed live to a big screen back at the command centre. There was a listening device that could monitor and analyse conversations within a ten-metre radius outdoors, day and night. There were biometric scanners that picked up iris patterns in the eyes, which could be used to identify a person, similar to fingerprints. There was a voiceprint database to match voices on audio recordings against known individuals.
In the latter part of 2020, a small, Pennsylvania-based research outlet called IPVM published an internal report from Huawei outlining the company’s tests of a facial-recognition system.
“Huawei Confidential, No Circulation Without Permission,” it said across each page. Dated January 8, 2018, the seven-page PDF was an “inter-operability” report outlining the test performance of a facial-recognition tracking system built jointly by Huawei and a partner company, Megvii, one of China’s largest facial-recognition providers. There were two lines that jumped out:
Supports Offline File Uyghur Alarm: Passed
Supports Recognition Based on Age, Sex, Ethnicity and Angle of Facial Images: Passed
The report showed that Huawei’s technology wasn’t being used to track Uighurs by accident; it was by design. Huawei and Megvii engineers had put an “Uyghur alarm” feature into their facial-recognition system to automatically flag faces that appeared to belong to members of the ethnic minority. And they had tested it to make sure it worked.
The Xinjiang crackdown — coupled with harsh restrictions on pro-democracy protesters in Hong Kong — would have a significant effect on how the international community viewed China. Since the early 2000s, when the country was in the process of joining the World Trade Organisation, there had been a widespread belief both within and outside China that its growing economic openness would bring a freer flow of information and a gradual shift towards more democratic governance. Now people had to wonder if they had been wrong.
If Ren had any opinions out of step with the official line on the Xinjiang crackdown, he would have known to keep them to himself. Beijing was warning Chinese nationals of consequences if they were caught “spreading rumours” about the situation in Xinjiang.
Years later, pushed by foreign reporters to give his opinion on the Xinjiang repression, Ren largely echoed Beijing’s talking points. “Which do you think is better for people — the approach the US has taken towards problems in the Middle East, or the approach the Chinese government has taken on the Xinjiang issue?” Ren said to Canada’s The Globe and Mail. “In the past few years, Xinjiang hasn’t seen major social incidents or unrest. Xinjiang is becoming stable.”
Surveillance tech
Overseas, Huawei’s Safe City surveillance solutions [which allow authorities to view footage from individual surveillance cameras, as well as traffic information and other analytics, on a big screen] were now in use in more than eighty countries, covering some 800 million people. As it sought further growth in 2018, the company announced $1.5 billion in financing for African nations to purchase its Safe City solutions.
Huawei’s technologies were being met with open arms in some countries. But its growing surveillance footprint was raising alarm in Washington. “This coupling of innovation and authoritarianism is deeply troubling and has spread beyond China itself,” Representative Adam Schiff, chairman of the House permanent select committee on intelligence, said at a hearing. “The export of this technology gives countries the technological tools they need to emulate Beijing’s model of social and political control.”
Even within China, the growing ubiquity of video surveillance was eliciting some concern. Authorities had discovered with alarm that a number of surveillance cameras in Jiangsu province had been hacked and were being controlled remotely from overseas.
By the start of 2018, US mobile operators were beginning to distance themselves from Huawei’s smartphones under pressure from Washington. Some stopped carrying Huawei’s handsets — first AT&T, then Verizon. Then came an explosive report from the French newspaper Le Monde. The paper published an exposé revealing that officials at the African Union’s headquarters had discovered its servers were mysteriously sending data to China each night between midnight and 2.00am.
The futuristic compound, a gift from Beijing, had been constructed by China in Ethiopia’s capital, Addis Ababa. “According to several sources within the institution, all sensitive content could have been spied on by China,” Le Monde Afrique reported.
The Australian Strategic Policy Institute, a think tank funded by Australia’s Department of Defence and the US State Department, published a follow-up piece that expanded on the story: the equipment in question had been supplied by Huawei. In the media frenzy that followed, Huawei called the allegations of impropriety “completely unsubstantiated” and declared that it had “never” installed a back door in its 30-year history. “The solutions provided to the AU was controlled, managed, and operated by the organisation’s IT staff, and Huawei had no access to AU data,” Huawei said.
The reports of Huawei servers pinging data back to China fell short of a smoking gun, as there was no indication that Huawei was aware of the espionage or participated in it. But to Huawei’s critics, the scandal was proof that Huawei gear could contain security risks, whether Huawei’s top brass was aware of them or not.
Trump sanctions
Under Donald Trump, Washington DC took increasingly aggressive moves to pressure its allies to rip its kit out, citing security concerns.
In May 2020, the administration tightened the sanctions, preventing not only the direct sale of US technology to the company, but also the sale of any chips made using US technology without a special licence.
The implications for Huawei were massive. While it had been designing some of its chips in-house through its HiSilicon division, it relied on the Taiwan Semiconductor Manufacturing Company (TSMC) to produce them. When it came to manufacturing advanced chips, TSMC was the very best — but it relied on US technology to run its operations. Under the new sanctions, it had no choice but to shut its doors to Huawei.
In July 2020, citing the new US sanctions, the UK announced it was reversing its position on Huawei and would remove all its equipment from the nation’s 5G networks by the end of 2027. British officials said that due to the new curbs, Huawei could no longer use trusted international suppliers, increasing the level of its risk.
Huawei’s only hope now was for China’s domestic chip foundry, the Semiconductor Manufacturing International Corporation (SMIC), to learn how to produce advanced chips at lightning speed. This was a “Hail Mary”; the SMIC had been endeavouring for two decades to advance its technologies, but still lagged several generations behind global leaders in advanced chipmaking.
Huawei quietly launched a race with the help of the SMIC and others to figure out how to make the chips it needed. This was a sensitive project, with national significance, and the company kept a wall of silence around the endeavour in public. Rumours circulated of secret microchip factories. Ren appealed for help from the country’s top scientific minds.
In August 2023, Huawei quietly launched a new smartphone, the Mate 60 Pro. It skipped the usual fanfare, but people were whispering that the company had found a way around the US sanctions.
Rarely had so many people bought a brand new phone just to crack it open and tear it to pieces. Analysts soon confirmed the rumours were right: Huawei had managed to produce a 5G processor through the SMIC, despite both companies being under US sanctions meant to stop them manufacturing such an advanced chip.
No one could say for sure how it had happened. Huawei and the SMIC might have achieved the feat by violating sanctions, or they might have managed it by pushing less advanced tools to the limit.
Huawei has survived Washington’s offensives, perhaps better than anyone could have expected. It has emerged stronger in some ways, developing its own alternatives to US technologies that it had long relied on. The crisis has revealed Huawei as the apple of Beijing’s eye, with officials willing to move mountains to ensure the company escapes death. It looks poised to remain an important actor in world affairs for some time.
House of Huawei: Inside the Secret World of China’s Most Powerful Company, by Eva Dou, is published by Abacus on January 14 (RRP £25)
