From Cairo to Johannesburg, the Chinese telecom has offices in 18 countries and has invested billions of dollars in building African communications networks since the late 1990s.
From Cairo to Johannesburg, the Chinese telecom has offices in 18 countries and has invested billions of dollars in building African communications networks since the late 1990s.

Is tech firm a front for China to spy?

By John Reed Time of article published Aug 4, 2013

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Washington - Chinese telecommunications giant Huawei may have been all-but-barred from doing business in the US over allegations that it’s basically an intelligence agency masquerading as a tech business. In Africa, however, Huawei is thriving.

From Cairo to Johannesburg, the Chinese telecom has offices in 18 countries and has invested billions of dollars in building African communications networks since the late 1990s. The company’s cheap cellphones today dominate many of Africa’s most important markets – and that was before Huawei teamed up with Microsoft earlier this year to launch a low-cost smartphone on the continent. In the past few months alone, the firm closed a pair of telecommuni-cations deals in Africa each worth more than $700 million (R6.9 billion), part of an African business that brings in more than $3.5bn annually for the Chinese firm. According to Huawei’s marketing materials, the projects are all part of a mission of “Enriching (African) Lives through Communication”.

But current and former US officials – as well as outside security analysts – worry there could be another agenda behind Huawei’s penetration into Africa. They suspect that the Chinese telecom could be wiring the continent for surveillance.

“There’s a great deal of concern about Huawei acting to advance the interests of the Chinese government in a strategic sense, which includes not only traditional espionage but as a vehicle for economic espionage,” former Homeland Security secretary Michael Chertoff said.

“If you build the network on which all the data flows, you’re in a perfect position to populate it with backdoors or vulnerabilities that only you know about. You’re upgrading it, each time you upgrade the network or service it, that’s an opportunity (to install spyware)”.

“That’s a strategic issue for the countries in Africa and a strategic issue for us,” said Chertoff.

Huawei spokesman William Plummer called such concerns “silliness”, noting that the company “did $35bn in business last year, 70 percent outside of China. We will not compromise our commercial success for any government”.

China has made no secret of its interest in Africa, investing more than $67bn into large-scale projects on the continent between 2006 and last year. Hundreds of Chinese troops are helping keep the peace in Mali, while Beijing’s warships have contributed to the fight against pirates off the coast of Somalia for years. And no wonder: China is becoming increasingly dependent on Africa’s farms to feed its people, on Africa’s minerals to run its industries, and on Africa’s oil to fuel its cars. China needs Africa as a partner – the closer, the better.

Enter Huawei.

“Across Africa – but especially in demographically large or resource-rich nations – Huawei is offering exceptionally competitive prices, generous financing, and fully managed systems to governments that otherwise have grave difficulty expanding into broadband (and the internet in general),” Chris Demchak, co-director of the Center for Cyber Conflict Studies at the US Naval War College, told Foreign Policy in an e-mail.

Huawei isn’t just providing cellphones, towers and fibre-optic cable and then turning them over to local businesses.

The telecom giant – and sometimes its Chinese rival ZTE – is often running these networks for the local communications providers and the government.

“Generally, most of the employees operating these systems are Chinese and the arrangements usually include delegating maintenance and decisions about future updates to Huawei as well, thus ensuring the Chinese firm’s control of the basic technological architecture’s foundation, evolution and operations,” Demchak said.

In June, the firm signed a $700m deal to build cellular networks in Ethiopia.

At the same time, the company inked a deal to run communications networks in Nigeria – networks that it’s also had a role in building – for the next five years.

Huawei also helps run the communications networks in Zambia. In oil-rich Angola, Huawei was awarded a contract to built LTE 4G cell networks for the state run mobile phone firm, Movicel.

Interestingly, in 2008, Huawei’s Chinese rival ZTE was given a contract from the Angolan government to manage the mobile phone business.

“Managing a nation’s backbone telecommunications system, especially if it is seen to be the basis for future economic development, is an exceptionally powerful position economically, politically, and technologically for any firm in a country, let alone a foreign firm,” Demchak said.

“With that kind of monopoly (or near enough), it is much easier to quietly move massive streams of data, malware, and sophisticated penetration campaigns around through complex cyber systems without oversight.”

Several of these African governments – including the Zambian, Ethiopian and Zimbabwean regimes – have all sought Chinese assistance in monitoring their country’s digital communications networks, according to Mai Truong, an Africa analyst at Freedom House.

In February, for example, “Zambian government sought Chinese expertise and assistance in installing internet surveillance and censorship equipment, which occurred after President (Michael) Sata had signed an order earlier in the month authorising the Office of the President to intercept both telephone and internet communications,” Truong told Foreign Policy in an e-mail. “In Ethiopia, Chinese technical assistance to monitor Ethiopian citizens online was confirmed in June last year when the government openly held an ‘Internet Management’ media workshop with support from the Chinese Communist Party.”

While the Zimbabwean government’s ability to monitor citizens’ online behaviours isn’t fully known, “the technology they do have is likely to have been provided by the Chinese, beginning in 2007 after the passage of the Interception of Communications Act,” writes Truong. “The Chinese have also been blamed for hacking attacks against independent Zimbabwean news websites.”

It’s also worth noting that many African nations have publicly stated the internet empowers too much free speech, so it’s no secret many of them want to monitor their citizens’ online activities. Just last fall, the Islamic group Boko Haram attacked cellphone towers across Nigeria, citing concerns that the Nigerian government was tracking the group via its members’ cellphones. Meanwhile, the mysterious Zimbabwean digital whistle-blower Baba Jukwa is being hunted by the government of President Robert Mugabe – even as Jukwa claims Zimbabwean spooks trained in internet surveillance are looking for dissenters.

Still, it’s not really news that local governments work with telecommunications firms to monitor networks. “Lawful intercept” is the intelligence world’s term for this practice.

“With regard to lawful intercept capabilities... everyone does that,” former CIA and National Security Agency director Michael Hayden told Foreign Policy.

But what’s potentially more disturbing about Huawei’s involvement in African telecommunications is that it could provide the Chinese government with direct access to those networks.

“Would Huawei, in constructing a lawful intercept capability for a sub-Saharan nation, build into the system, their own access to the lawful intercept capability, thereby giving them tremendous insight into what that state thinks or does about its security?” asked Hayden rhetorically.

“Those are dangers.

“Even if there aren’t any backdoors, which is a large hypothesis, just the Chinese state having access to the architecture of your system is a tremendous advantage should they (the Chinese) want to engage in any electronic surveillance, any electronic eavesdropping,” he said.

“The Chinese see themselves in a global economic competition with the United States, and they see real advantages of at least having the possibility of exploiting (African) networks in the future.”

Late last year, the US House intelligence committee urged American businesses not to work with Huawei, alleging that communications gear installed by the firm in the US was passing sensitive data about American companies back to China.

But lawmakers didn’t provide concrete examples of US firms losing data because of their use of Huawei products.

The congressmen instead repeatedly noted the strong connections between the Chinese company and the Chinese government, which is believed to be behind a massive global campaign of electronic espionage.

Plummer, the Huawei spokesman, indirectly acknowledged the fears about China’s cyberspying. But he said those worries had only made Huawei’s privacy and security protections stronger.

“In part due to the spotlight we are under based on our country of heritage, we have put in place sophisticated security assurance disciplines – from ideation to after-market service – to ensure the integrity of our gear and code,” Plummer said.

He then suggested that Westerners accusing Huawei of rampant spying “are looking into the ‘mirror’ of the US PRISM and related programs and assuming like activity by other states.

“Whatever, whichever [spying] other states may be engaged in, Huawei is not involved and will not engage in any such activity,” Plummer said.

And if there are concerns in Africa about Huawei as a potential Big Brother, they haven’t hurt the company’s revenues on the continent. Late last year, Huawei predicted revenue from African business would increase 30 percent by 2015. The company’s African revenue in 2011 was listed by Bloomberg as $3.42 billion – a rise of 15 percent from the year before, meaning that African sales now make up 13 percent of the firm’s global revenue.

The company has recently signed a $750m deal to improve networks in Nigeria, built training centres in seven African countries, a research and development centre in South Africa and opened its network operations centre in Cairo where it has monitored its African infrastructure from late last year. It’s sold millions of telephones and hundreds of thousands of smartphones across the continent, including its 4Afrika smartphone that it developed jointly with Microsoft.

Huawei’s IDEOS smartphone reportedly has 45 percent of the market share in Kenya.

While Chinese businesses are “omnipresent” in Africa, this isn’t necessarily a bad thing, a recently retired senior US military official with experience on the continent said. “A lot of that is resource driven, extracting resources to fuel the Chinese economy and they get access to those resources through infrastructure [building projects], low-rate loans, those kind of things. The Chinese are building roads, bridges, government buildings all over Africa. That’s a very good thing, it’s needed.”

Huawei’s deep involvement in African networks could only further China’s economic expansion on the continent. It could give the Chinese an edge in almost any business deal or security matter on the continent. US cybersecurity experts have repeatedly cited cases of Chinese hackers stealing American corporations’ negotiating strategies and business plans in order to give rival Chinese companies a leg up on their American counterparts.

In addition to giving Huawei – and potentially the Chinese government – vital intelligence on African nations, Demchak worries that access to Africa’s telecommunications infrastructure could make it even easier for Chinese hackers to disguise their attacks by rerouting them through the continent.

Basically, the continent could serve as a giant laundromat for Chinese cyber-aggression.

“One could imagine a situation where the Chinese management of Africa’s backbone in effect turns much of the continent into a ‘bullet-proof host’,” said Demchak, describing a term for web hosting services that permit illegal activities.

“In that case, laundering of bad cyber-behaviours through these backbones could easily be largely untouchable and uncontrollable externally by other nations,”said Demchak.

If she’s right, Huawei’s investments in Africa might not just be problematic for the people who live on the continent.

They could become an issue for all of us. – Washington Post-Bloomberg


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