US Boots China out of Tech Infrastructure

US Boots China out of Tech Infrastructure

Have you heard of the Five Eyes?

It’s not something we hear much about in Australia.

In fact, the first time I heard about the Five Eyes, was in an interview with Jim Rickards a few years ago, on a ranch in Nicaragua.

Shortly after, I was able to share this information with Strategic Intelligence Australia subscribers.

Jim’s knowledge gave Aussie investors an edge.

Simply because so few Australians are aware that we are a key member of the ‘Five Eyes’.

And together the Five Eyes are working to prevent Chinese-owned telecommunications company Huawei from gaining any significant government contracts…

You can’t do business here…or here…or here

Australia was one of the first countries to ban Huawei’s involvement in the NBN back in 2012. Japan and New Zealand quickly followed our lead.

Subsequent Australian governments have put a full ban in place when it comes to now building the 5G network.

In 2016, Huawei was courting the Solomon Island government, trying to convince them to allow the Chinese telco to lay an undersea cable between the Solomon Islands and Sydney.

Chinese presence in the Pacific is an issue for Australian security.

To avoid China’s influence over in the Pacific, Australia signed a $137 million agreement with the Solomon Islands to lay 4,000 kilometres of cable in 2018.

This won’t be the last time Huawei misses out on a Western government gig either.

The Chinese telco is actively being pushed out of government business.

And that push is coming from the US.

The battle to remove China from critical tech infrastructure is building.

Australia has made it clear we won’t use Huawei’s 5G technology.

Same with the US.

But it’s a different story for those in Europe.

The UK have been using Huawei’s technology for the past 15 years…and is only just now increasing the pressure on the tech giant.

And until recently, this wasn’t a problem. Governments were allowed to decide what international companies they worked with.

That may be all about to change.

The US is making it clear the Huawei’s technology has no place in the West.

According to The Australian, a US ambassador wrote to Germany’s economic minister, saying if they ‘allowed Huawei or any other Chinese vendors to participate in 5G projects’, Germany would lose ‘cooperation’ privileges when it comes to intelligence amongst their allies.

Some of the intelligence provided by the NSA and CIA has been crucial to preventing terror plots in Germany says The Australian.

The threat of being shut out of the US intelligence networks may be too great for Germany to risk.

As Jim points out today, the US is rapidly working towards pushing Huawei out of the West completely. In spite of Huawei having market leading 5G technology.

Aussies are witnessing the battle for technology infrastructure.

Huawei are leaders in this this field. But the relationship between both the US and China has soured.

Given the Australian reluctance to allow China’s 5G tech into our projects, it won’t be long ‘til we feel the wrath of Chinese retaliation. 

Exactly how will that happen?

It begins when China stops importing our coal…and could potentially end with a complete ban on Australian exports to the country.

Can you imagine the consequences that would have on the Aussie economy?

Well, you don’t need to imagine.

I’m currently putting together a report that shows you the tenterhooks our relationship with the Middle Kingdom hinges on. Losing our best customer is just one part of the problem.

In fact, if my research is correct, I have mapped out a terrifying blueprint of devastating upheaval to Aussies.

I’ll reveal all next week.

For now, it’s over to Jim.

Until then,

Shae Russell Signature

Shae Russell,
Editor, The Daily Reckoning Australia

US Boots China out of Tech Infrastructure

Jim Rickards, Strategist

Jim Rickards

Intelligence agencies from the CIA to MI6 are practiced in the arts of deception and denial. No one trusts anyone.

That tradecraft is useful when you’re outwitting the enemy. But how do you engage in honest exchanges of information with friends?

A solution to this conundrum is called the ‘Five Eyes’.

This term refers to the intelligence agencies of five close allies who share a language and cultural history and have long cooperated in intelligence sharing. The Five Eyes are the US, UK, Australia, Canada and New Zealand.

Spying on the neighbours

While each of the Five Eyes has their own history and unique tools, they all evolved along the lines created by the UK’s MI6 international intelligence service.

This shared tradecraft includes officers who recruit and handle spies (called ‘secret agents’ or ‘case officers’), the use of front organisations (called ‘cutouts’), the use of disguises, and a network of safe houses.

The 21st Century version includes spy satellites, listening devices and message traffic intercepts. Intelligence agencies worry about sharing information because it can reveal sources and methods, or it could fall into the hands of moles in the agencies with whom it is shared.

The Five Eyes have the highest level of trust and therefore share information and plans more freely.

The latest operation of the Five Eyes involves the destruction of Huawei, which is the world’s largest smartphone manufacturer and one of the largest companies in China.

Huawei has implanted bugs and backdoors in its smartphones to capture message traffic and relay it to Chinese intelligence.

Huawei is now making a play as a supplier to the most important 5G networks in the world.

The Five Eyes and their host governments are determined to stop Huawei in its tracks…

No one trusts them…

Huawei has been barred from making acquisitions of tech companies in the US, UK, Australia, Canada and New Zealand and is being banned from contracting on government telecoms systems.

Other allies including Japan are joining the effort to bar Huawei from all 5G networks. Canada recently arrested the CFO of Huawei pursuant to a US arrest warrant, a good example of Five Eyes cooperation.

This attack on Huawei is just getting started.

Why is Huawei is beginning to feel the scrutiny of the Five Eyes? No one trusts them…

Huawei is China’s ‘national champion’ in the field of digital technology and telecommunications.

It is the largest cell phone maker in China and a leader in the next-generation 5G technology that will revolutionise mobile devices with much faster speeds for streaming and apps.

A global struggle for dominance in 5G is underway between Huawei and various US companies including Apple, AT&T and Verizon, as well as European competitors such as T-Mobile (Deutsche Telekom) and Vodafone.

What sets Huawei apart is that much of its technology was stolen from Western firms, and its equipment comes with hidden back doors and trapdoors designed to steal your personal information, and relay it to the Communist Party of China for purposes of surveillance, blackmail and theft.

The CFO of Huawei is currently under arrest in Canada awaiting extradition to the US to stand trial on charges of sanctions violations.

Huawei denies these allegations and claims that it would not hand over customer data to the Chinese government.

But experts point out that Huawei really has no choice and that if the Chinese government wants the data (they will), then Huawei will have no choice except to turn them over.

One network for the East, and one for the West

Western companies and governments are banding together to deny Huawei access to or participation in their new 5G systems for reasons of national security.

China is retaliating by denying Western companies’ opportunities in the Chinese mobile phone market.

In the end, the world is likely to have two 5G systems, one in the West that excludes Huawei and one in China than bans Western firms.

This may be suboptimal from the perspective of uniform standards and interoperability, but it is the price everyone must pay to preserve national security against Chinese attacks.

All the best,

Jim Rickards Signature

Jim Rickards,
Strategist, The Daily Reckoning Australia