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Chinese Networking Vendor Huawei's Murky Ownership

Posted by kdawson on from the worthy-of-neal-stephenson dept.

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."

11 of 170 comments (clear)

  1. This is easy by lalena · · Score: 5, Insightful

    Just compare the code byte for byte with Cisco's. Any differences are the Chinese backdoor.

    1. Re:This is easy by Anonymous Coward · · Score: 5, Interesting

      Just compare the code byte for byte with Cisco's. Any differences are the Chinese backdoor

      I used to work in office where the upper floor was rented by Huawei: At first there would be 2-3 people, but they exponentially grew up to a small (and short) 100 I estimate.

      Our cars on the driveway got hit more as there were more chinese and their "parking skills" were so telling, people started parking their cars close to those employers so they could get it through insurance to replace parts of their cars.

      During lunch, it was pretty the hallucinant experience as well..

      They never talked about their work or interacted with us, but when I inquired with my colleagues, it was the consensus: "They just relabel Cisco hardware and software."

    2. Re:This is easy by lalena · · Score: 5, Informative

      I had assumed that everyone was aware that Hauwei started out by copying Cisco's code and manuals - byte for byte - word for word. Programming errors and typos in the manuals were all fully duplicated in Hauwei's product. Based on some of the replies to my first post, I guess everyone was not aware of this.
      Cisco sued Hauwei and settled out of court. Here is Cisco legal filing (details on pg 3 & 4): http://newsroom.cisco.com/dlls/Cisco_Mot_for_PI.pdf
      TFA asked who owns & controls Hauwei. We don't know what the terms of the legal settlement were. Maybe Cisco owns a large stake.

  2. Pot kettle pot kettle pot kettle by wombatmobile · · Score: 5, Funny

    I'm not buying any more Chinese equipment. From now on I'm only buying from reputable American companies.

  3. Comment removed by account_deleted · · Score: 5, Insightful

    Comment removed based on user account deletion

  4. Coop? by MozeeToby · · Score: 5, Insightful

    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).

  5. It's easy logic by copponex · · Score: 5, Insightful

    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.

  6. are you surprised? by oddTodd123 · · Score: 5, Insightful

    owned or controlled by the Chinese government

    Isn't everything in China owned or controlled by the government?

  7. It's in the name! by Anonymous Coward · · Score: 5, Funny

    Murky ownership? What did you expect from a company called 'who-are-we?' :P

  8. Re:Why does this matter? by fuzzyfuzzyfungus · · Score: 5, Interesting

    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.

  9. Juha Saarinen is a Finn by mangu · · Score: 5, Funny

    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...