Is Huawei backed by the Chinese military?

Is Huawei backed by the Chinese military?

Huawei founder Ren Zhengfei started his career as a military technologist at the People’s Liberation Army (PLA) research institute.

US intelligence indicates that Huawei is de facto controlled by PLA, and has engineered trapdoors and other devices in Huawei equipment that allow Huawei to spy on customer message traffic and to capture private data.

Huawei is alleged to have deep ties to the communist Chinese government and the PLA.

Huawei is not only China’s largest telecommunications firm; it is a leader in the rollout of 5G technology for mobile phones.

The US has already refused to allow Huawei to make acquisitions of US companies and has banned Huawei from sales of equipment to the US government.

The US has also urged its ‘Five Eyes’ intelligence partners (the UK, Canada, Australia and New Zealand) to do likewise. Huawei’s business is suffering worldwide just as the 5G tech implementation begins.

The race is on — but China has been kicked out

The race is on for dominance in the coming world of 5G smartphones and telecommunications.

5G is an abbreviation of ‘fifth generation’ in upload/download speeds and is the successor to the well-established 4G standard we use today.

These much-higher speeds will allow more video and music streaming and downloads, and enable more multitasking.

The profits from 5G will be enormous because every smartphone user in the world will have to buy a new phone to take advantage of the new technology.

It’s a windfall for manufacturers of handsets, screens, chips and other components, and a gold mine for content providers.

The winners will include a handful of companies such as Huawei and ZTE of China, Samsung in South Korea, Apple in the US and Nokia from Europe.

But don’t expect a level playing field in the competition.

Already the world is dividing into a ‘China camp’, consisting of Huawei and ZTE, and a ‘Western camp’ led by US champions.

The competition between the two has gone far beyond quality and price.

The CIA has developed evidence that Huawei is funded by China’s intelligence community and the People’s Liberation Army.

It is suspected that users of Huawei 5G equipment will be targeted with ‘back doors’ that relay sensitive information straight to Beijing and allow for other dysfunctions in the event of an all-out cyberwar.

The US is trying to rally European and other users to ban Huawei.

Europe and Japan are caught in the middle between a suspicious US, and the jobs and generous terms offered by Huawei.

A likely outcome will be a world divided into two mutually hostile technology platforms.

For those too young to remember the Cold War (1947-1991), you may get a chance to re-live it.

All the best,

Jim Rickards Signature

Jim Rickards,
Strategist, The Daily Reckoning Australia