Huawei probe underlines United States fears of China's strategic threat

Kelley Robertson
January 18, 2019

The Wall Street Journal reports USA prosecutors are investigating whether Chinese tech giant Huawei stole trade secrets from US companies.

Now, the Department of Justice is pursuing the case further and, according to the Wall Street Journal, the case has advanced to the point where a criminal indictment is very likely.

A Seattle jury in 2017 agreed that Huawei had misappropriated trade secrets, but determined that the actions were not "willful and malicious". This definitely puts even more pressure on the company whose high-ranking executives and employees are being arrested for one reason or another, some of them on behalf of the USA government.

In addition to allegations of sanctions breaches and intellectual property theft, Washington has been pressing allies to refrain from buying Huawei's switches and other gear because of fears that they would be used by Beijing for espionage.

"Chinese telecommunications firms like Huawei represent a growing threat to American national security", said Rep. Mike Gallagher (R-Wis.) in a statement announcing the new legislation.

Huawei products have already been labeled national-security threats in the U.S. AT&T and Verizon a year ago reportedly canceled plans to offer the Huawei Mate 10 just before that device was set to hit the U.S. market; the Mate 10 still was unavailable unlocked, but the majority of U.S. smartphone buyers get their devices through carriers, so that was a big blow to Huawei.

The shift by the national market leaders, both partly state owned, followed Huawei's exclusion on national security grounds by some USA allies, led by Australia, from building their fifth-generation (5G) mobile networks.

A civil lawsuit filed against Huawei by T-Mobile was one of the primary catalysts for the investigation. Set a simple standard: "If a Chinese telecommunications company is found to have violated United States sanctions, it will be punished more severely than ZTE".

The company is also mired in a USA case alleging violations of trade sanctions.

Tensions have been heightened by the arrest of Huawei's chief financial officer in Canada for possible extradition to the United States.

"This is Congress asserting, as we did back in July 2018, that we need to put these Chinese telecoms companies that are acting effectively as arms of the Chinese Communist Party, out of business", said one senior congressional official. Meng was arrested in Canada on December 1 and released on bail four weeks ago awaiting extradition hearings to the U.S. She is living under restrictions in her million-dollar Vancouver home.

In August, Donald Trump signed legislation banning government agencies from using services from Huawei and ZTE, among other Chinese entities.

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