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Chinese Networking Vendor Huawei's Murky Ownership
A month ago we mentioned India's suspicions that telecomm equipment from China might contain backdoors. There hasn't been any smoking gun on such speculation. Now reader littlekorea sends in some background on the ties one important Chinese telecomm vender might or might not have to the government there. "Conspiracy theories abound as to whether networking kit vendor Huawei is owned or controlled by the Chinese government and/or the military-industrial complex. But who really owns Huawei? Kiwi journalist Juha Saarinen headed to Shanghai to find out."
Just compare the code byte for byte with Cisco's. Any differences are the Chinese backdoor.
I'm not buying any more Chinese equipment. From now on I'm only buying from reputable American companies.
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So, after reading the fine article, it seems to me that the company is, officially at least, a coop. Only employees are allowed to own shares, which are primarily used as a method of profit sharing and performance rewards. It's actually not a bad model if you don't need the capital you can get by selling stock. There's a handful of companies in the US that do things much the same one, Ocean-spray being the first example that comes to mind.
I don't see anything in the article about if/when/how the Chinese government influences the company beyond an offhand remark about the CEO's past work at the beginning and an otherwise unsupported statement at the end. How exactly would the company being publicly traded ally fears that the Chinese government is exerting control? It isn't as if the stockholders would have to know about the situation, nor would the fallout be any more severe if they were found out (either way the company would be going bankrupt very rapidly).
There is a structure that makes it appear that the workers own the company. Having worked for a US company controlled by Asian interests, I found the structure rather familiar. It is done to reward workers based on results, and retain good employees.
Other than that, there is no overwhelming evidence of government ties. Just a company with a management structure meant to maximize the appearance of employee control. The fact that the façade may not match reality does not mean the reality is a conspiracy.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
All companies have some murky shares.
The largest prime factor of my UID is 263267.
What is the difference between a back door, and a section of code which is deliberately a little bit sloppy to allow for a vulnerability that would just be very difficult for someone to discover? You are assuming that any back-door which does exist would be well labeled as such and therefore serve the function of a smoking gun if discovered. In reality it would probably be far easier to just not fix certain bugs deliberately and provide detailed documentation of them to the right people.
When Americans have backdoors, it's to protect American interests and therefore "good". When the Chinese have backdoors, it's to protect Chinese interests and therefore "bad".
You can apply this same logic to foreign policy. Both value systems are based on power instead of principle.
You are supporting communism! Thats right, the CEO of Huawei is a fully paid up member of the Chinese Communist Party.
I'm pretty sure every rich and powerful person in China is a paid up member of the Communist Party. I doubt they'd be rich and powerful otherwise.
When T-Mobile released the "T-Mobile Tap" -- manufactured by Huawei -- I bought it the first week. It was cheap, had a huge screen, and counted as a "dumbphone" so it wasn't subject to the smartphone data plan upcharge.
I've regretted that purchase every single day since.
I posted a litany of woes over on the HoFo forum. I have never had a phone that provided me with such daily reminders of why I don't buy new products.
The interface is clunky and inconsistent -- it's clear that one dev team built the dialer, another dev team built the text message system, and another one built the contacts. All of those reference things like typing and phone number entry, but they all do it in different ways! And, they all suck. In fact, none of the functions play well together. All of the built-in apps can be dragged onto the "desktop", but most of them go away every time you power-cycle.
And the hardware is cheap. Every time a sound plays (like a ringtone) on the external speaker, there's an audible "pop" as the speaker gets power and another "pop" when the sound completes and the speaker powers down. And the processor often bogs down during complex tasks, such as entering a phone number. :P Of course, it's a sub-$200 touchscreen, so I didn't expect top-notch hardware -- if that's all that sucked, I'd be happy.
The worst part is just cropping up now, though. Random software issues are killing the digitizer. I'm quite certain it's not hardware, because it typically happens after running a Java app (such as the built-in Google Maps, or the Opera Mini I downloaded but can barely use because the phone only gives it a data connection half the time). Also, strange behavior occurs when the digitizer is wonky, like when the text message notification bar goes away or the options at the bottom of the screen disappear and leave the background visible.
Maybe it's not just bad software... maybe these are indications that the Chinese government is monitoring my calls and text messages. Maybe I got on their bad side by using Google Voice? If that's the case, they're getting a whole lot of messages like "I'll have to call you back, my phone is crapping out again".
I learned one lesson, at least. If the manufacturer isn't willing to put their name on it, don't buy it! T-Mobile should follow that advice, instead of tarnishing their name by associating it with this piece of crap Tap.
Stressed? Me? Of course not. Stress is what a rubber band feels before it breaks, silly.
"We can make the enemy's command centers not work by changing their data system. We can cause the enemy's headquarters to make incorrect judgments by sending disinformation. We can dominate the enemy's banking system and even its entire social order." General Pan, Chinese PLA
Now, that was in 1996. I think he read the tea leaves correctly even back then, and the world has become a lot more interconnected in the last 14 years. Read More
owned or controlled by the Chinese government
Isn't everything in China owned or controlled by the government?
Murky ownership? What did you expect from a company called 'who-are-we?' :P
A cynic would suggest that what our "analyst" friends are actually so butthurt about is the fact that all those sweet, sweet shares are locked up in some oddball quasi-coop/quasi-privately-held arrangement, rather than floating around on stock exchanges, where they can be traded and hedged and sliced and diced (for a variety of nice commissions) by the more and less blatantly parasitic middlemen who live there.
Rather analogous to the swarms of "social security reformers" who talk a lot about cash-flow and solvency; but are basically pissed off that all those billions aren't being overseen by Wall Street, for an appropriate fee...
Now, as a separate issue, it seems quite plausible that Huawei's stuff is bugged. A certain "coziness" seems to be virtually inevitable between strategic corporations and the state's military and intelligence arms. That was certainly the case in the (formally) much less government dominated economy of the US during the cold war, I have no reason to suspect that it isn't the case in china now. However, stuff doesn't get bugged because sinister agents of the state buy 51% of the shares, and then introduce a "motion to bug hardware shipped to capitalist running dogs" at the next shareholder meeting. There are much subtler and more tactful ways of getting that done.
Consider, for instance, the tracking codes produced by numerous models of color laser printer, built around print engines produced by a number of different companies, ostensibly as an "anti-counterfeiting measure". This occurred despite the fact that the US Secret Service has no ownership stake in any of the companies involved. Exactly what inducements where used is unknown; but anybody who thinks that stock ownership is particularly relevant is a moron.
I have been using Huawei's sonet gear for the last 5 years. I work for a CLEC. I have about 50 nodes in the field.
They are a mix of M800s, M1600s, and M3600s that are spread out over multiple states. They are a real pleasure
to use and have been rock solid. Their price point compared to other vendors was a no brainer and have allowed
us to improve our network.
Take the M1600 which is a 3-4U box. It has 8 slots that can take a wide array of cards from OC48, 12 DS3s, 28 T1s,
ethernet GigE ports, ethernet 10/100 ports, multi port OC12/3, and even up to OC192 which I have not used yet. When
I did have a card laser failure they RMA'd it and gave me a new card even though it was no longer under warranty. Their
support is quite good and I speak with Americans who are located in Texas.
All the gear is on a private network so I am not quite sure how a backdoor would ever allow them access or the ability
to enter my gear if they so desired.
So with that said, if Huawei combined with the Chinese govt can deliver such an enjoyable experience for my company
and I when it comes to using their sonet gear, I am all for it.
That isn't strictly true. Sure, if you draw an org chart, and everyone falls under "the state", then it looks like you couldn't possibly have a "complex" with only a single actor.
However, "The state" is never a monolithic actor. Indeed, more totalitarian states can have incredibly colorful internal power struggles, with individuals competing for influence over various state organs, with new organs being created as more loyal replacements for older, ideologically challenged ones, sometimes even direct conflict between different state entities.
If, in practice, you have a situation where factional leaders in whatever military organ is dominant are strongly aligned, strategically, financially, culturally, with the factional leaders in the dominant industrial entities, the fact that the theoretical org chart says that they are all under one state doesn't really interefere with this being a situation usefully describable as a "military industrial complex", any more than the fact that, in the US case, the public sector military and the private sector industry are supposedly separate.
Last I knew they produced Dell's networking gear, not sure if that is still the case.
A fun read to go through: http://en.wikipedia.org/wiki/List_of_Chinese_inventions
Yes, they were a bit sidelined for few last centuries; considering the above list it's not totally unreasonable to look at any possible present "tech stealing" as collecting debt, in the process of revving up again.
One that hath name thou can not otter
Judging from the article author's name, he's obviously of Finnish origin. Now, Linux was created in Finland. Therefore, the Finnish government is the real controller behind Linux and this article is an attempt by the government of Finland to discredit a competitor in the world market for information technology.
See, pulling out conspiracy theories from one's ass is not so difficult...
If your company spokesman first tells you this:
The shares themselves are known by the Huawei internal term "Virtual Restricted Shares", but according the company spokesman, this is "just a technical name" for otherwise "normal" shares.
Then says this:
Employees allocated shares have to return these when they leave Huawei's employ, according to the spokesman.
Then no those are not shares, everything the spokeman says at this point is likely a lie. Mr. Webb sums it up well:
"Unless and until Huawei becomes a stand-alone widely held listed company with employees free to trade their shares and without a controlling shareholder, these suspicions and allegations will likely continue."