back to article How the US attacked Huawei: Former CEO of DocuSign and Ariba turned diplomat Keith Krach tells his tale

The United States' Clean Network plan has won support from 53 nations and 180 telcos, and Huawei has unwittingly legitimised it. So says Keith Krach, the US Under Secretary of State for Economic Growth, Energy, and the Environment, who late last week spoke on a webinar hosted by the American Chamber of Commerce in Australia. …

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    1. You aint sin me, roit Silver badge
      Devil

      It's not about clean or secure...

      And it never has been.

      It's all about US envy of a Chinese success story.

      Huawei pumps billions into R&D. Western companies have been driven by bean counters obsessed with the bottom line. And now they find that they are lagging behind in a fast moving technology.

      So what do you do? Invest the billions required to catch up? Or play on "red under the bed" fears to undermine trust in the competition.

      So now we have a clean network... pretty soon they'll start playing up the "terrorists and paedo" fears to outlaw strong crypto. Which ironically would protect my data from Chinese snooping (alleged).

      1. Anonymous Coward
        Anonymous Coward

        Re: It's not about clean or secure...

        >> Huawei pumps billions into R&D

        Well, where is it coming from? Their management are also millionaires and billionaires like western companies, chinese tech labour is cheaper but not cheap as say India, yet their products are substantially cheaper.

        I'll agree when Huawei's accounts are an open book and Chinese banking and reporting standards meet those elsewhere..

        If labour laws in the west matched those in China, there would be more bang for the R&D buck that Huawei enjoys. So, this isn't just about beancounters, even if they matched Huawei spend.

        I'm not saying the US is innocent, but that is not a license to whitewash Huawei and the CCP's very aggressionist foreign policy, and firewalled information flow.

        For the sake of argument, for a moment, let's suppose that Huawei is indeed an apparatus of the CCP. What evidence would you accept?

        1. You aint sin me, roit Silver badge

          Re: It's not about clean or secure...

          Cheap Chinese labour... is that why Apple build phones over there? Of course. So you can imagine Huawei gain the same cost benefits.

          Is Huawei bankrolled by the CCP? I don't know, but I suspect only in the way that NASA bankrolls Boeing. One man's unfair state subsidies is another man's government contract. China has such a massive market and invested so heavily in trying to claw its way into the 21st century it's easy to see how Huawei could grow so big. And they appear to have decided that the only way to compete is to invest.

          What evidence would I want?

          I dunno, how about the government making Huawei pay for a complete security audit overseen by GCHQ. A level of scrutiny we don't apply to other manufacturers.

          But of course that didn't find any backdoors...

          Whereas we know the NSA backdoored Cisco products.

          1. Anonymous Coward
            Anonymous Coward

            Re: It's not about clean or secure...

            >> is that why Apple build phones over there?

            I don't get it. You said beancounters are holding back R&D.

            I said matching R&D spend is not enough.

            You point to ill treated manufacturing labour.

            You're still support my point that spending 1 bn in salaries in the west does not get you the same as spending 1bn on salaries in China. This is not about beancounters as you posit.

            So you want the west to ill treat? Or because it is accepting in manufacturing it should be for R&D too? You want r&d in the west to be treated like those Chinese labour to be competitive with Huawei?

            The real answer is to withdraw support for ill treated chinese manufacturing labour. Not go a support more of it.

            Everyone does manufacturing in China - that advantage is an even one.

            The labour that makes apple phones does not design 5G radio equipment and software FFS.

            You need seriously experienced engineers and it is really expensive r&d.

            These people are not as cheap in China, they are entirely in urban centres like Shanghai and don't go live in hostels and labour camps that makes the phones cheap.

            You are blinded by anti-US sentiment, which is making you think a pro-China one is an even counter balance. It isn't.

            You seem to think being successful is the same as being trust worthy. China has a bad reputation and clashing values - Uighurs, Taiwan, Hong Kong. Boorder disputes with all their neighbours. They also believe they are right, at least the US does bad things but keeps quiet. Or there is some quid pro quo like intelligence sharing.

            China is a rogue international actor. No country disputes this, not even China.

            What on earth benefit is there to save some money and create USSR 2.0 on something like infrastructure. Support savings on bad value like labour mistreatment.

            I go on to ask what evidence would be there if Huawei was an arm of the CCP.

            You gave an answer that proves, at the very best, that the CCP has not asked anything of their Huawei arm. Assuming GCHQ is as good as the Chinese equivalent.

            You don't see the difference in the evidence I bet. What a moronic answer.

            "Let support cheaper mistreated labour, even though the product has long term implications to our nation if there is the slightest mistake. Let's treat infrastructure the same as my tv remote, and make them as cheap as possible.

            Because the US started it, there is no merit in it whatsoever. The merit must, therefore, be in the opposing position."

            1. Roland6 Silver badge

              Re: It's not about clean or secure...

              >I don't get it.

              That is probably because you've fallen for the Trump manufactured news that this story reveals the US anti-Huawei hysteria to be.

              Interestingly, the Conservatives obsession with keeping in with Trump, has effectively killed off Huawei opening a meaningful R&D facility in the UK...

              Fundamentally, the current "China" mess is down to western beancounters, aided-and-abetted by big-name management guru's and consultants, who since the 1980s extolled the virtues of outsourcing low-value stuff such as manufacturing and offshoring it to emerging markets; specifically Asia-pacific - of which China was a major component with many investments being channeled through Hong Kong to China. Hence why so much stuff we purchase now is "made in china" even if it gets relabelled "made in USA/UK/EU" after "assembly".

              It was obvious 10~15 years back that the US ego & psyche was going to receive a knocking when the US woke up to the fact that it was no longer the world's largest economy and thus no longer did the rest of the world revolve around the US and simply accept US imperialism.

              I don't dispute that China is also acting like an imperial power in its international dealings, but in part that is because the US (and the European nations) has for several decades failed to play their part and help shape the emerging new world order.

              Being outside the US, it doesn't really matter if Huawei are or are not an arm of the CCP, given we know that Cisco et al are arm's of the US government and there is a documented history of the US government passing on intelligence to the benefit of US businesses over its allies (including the UK). So from a Brexit-UK perspective, we will just have to find ways of living in a world where we are a small fish with reduced influence over the large fish.

        2. teknopaul Silver badge

          Re: It's not about clean or secure...

          Fact is Huawei made a lot of money and the US now sees breaking thing as a success story. The article is depressing, the guy has a smug attitude to doing massive amounts of damage and replacing it with something more expensive.

          That is the current US economic policy.

        3. Alan Brown Silver badge

          Re: It's not about clean or secure...

          1: Chinese labour isnt cheap

          2: Huawei's staff are shareholders

          3: This has nothing to do with labour laws. "American" equipment is built in China too

          4: Huawei have been going hell-for-leather in 5G for a long time and hold a huge patent portfolio worldwide. Even if you don't buy Huawei kit they're still getting significant royalties (which leads into the point that they're cheaper because they don't pay royalties to themselves)

          This is mostly about payback to Cisco et al for the back doors we've seen inserted in much of their kit for decades and the USA's fear that it can no longer infiltrate/spy on 3rd country networks using bsckdoors they mandated be installed

          "After all" they reason "if we've been doing it, surely China will be doing the same thing too?"

          1. Anonymous Coward
            Anonymous Coward

            Re: It's not about clean or secure...

            Huawei ONLY competes on cost.

            If costs are the same, why is Huawei cheaper? Who is subsidising this?

            I don't get your logic - US is bad, China is bad, so let them all in.

            They are different kinds of bad. Politics and policy do matter.

            The fact that China is bad on the other side of western values is being ignored by you. UK has intelligence and security relationships with the US, not with China. China is an political antagonist of the UK, it is not an ally. The US does not interfere with democracy and misinformation with the UK, China actively does. The US are not innocent, but for the UK, the US policy is congenial, not China's.

            But no, let China in, deep into the key infrastructure build for the next decade.

            You are also rather misinformed:

            >>Huawei have been going hell-for-leather in 5G for a long time and hold a huge patent portfolio worldwide.

            So have qualcomm and ericsson. Qualcomm's cross licensing with Huawei still requires Huawei to pay Qualcomm.

            >>still getting significant royalties

            Not for infrastructure - deployments do not match the device count of phones/terminals for revenues. Huawei pays Qualcomm. The patent license for the standard is common ((there isn't a different pool to license for 5g infra vs 5g mobile).

            >>This has nothing to do with labour laws.

            How is Huawei cheaper? I am talking R&D, we agree manufacturing costs are the same for all vendors. Either Huawei pay their r&D less (as labour laws as weaker - no pension ,holidays, excess working hrs etc) or something else allows them to be cheaper. If the former we should not support, if the latter, where is the money coming from?

            >> This is mostly about payback to Cisco

            You are badly misinformed. The equipment in question is not made by Cisco, Huawei was already excluded from that for quite a while now. The alternate vendors for the equipment are Ericsson and Nokia-Seimens NSN. Both european. Monetarily no US company benefits, as none manufacture the equipment in question (Nortel, Canadian, did, the reason all the other vendors died is due to severe price undercutting by Huawei for decades, many times well below cost.)

            Given the misinformation, I assume you are responding emotionally. US cronyism emotions.

            China needs to align their foreign policy with their economic ambitions as a world player. They could change the laws to allow true independence of companies. They can take a far less aggressionist foreign policy and they would still be successful.

            But their ideology wont permit that. That's fine, but there are then consequences on the global field with other ideologies. And there should be.

            Huawei battles are a failure of Chinese foreign policy. When 53 nations are convinced, somethings up. Even if the other bad boy started it.

        4. John Brown (no body) Silver badge
          Facepalm

          Re: It's not about clean or secure...

          "I'll agree when Huawei's accounts are an open book"

          Some people are saying that Huawei are waiting for Trump to go first. I heard this from some good people, very good people, the best people.

      2. Yes Me Silver badge

        Re: It's not about clean or secure...

        "US envy". Exactly. They made up the necessary lies (e.g. that Huawei has military ties and is controlled by the CCP) that Cisco etc. suggested to them. I hope the Biden administration will back off on the dirty war side of things, even if they still consider China as a dangerous trade rival.

    2. nijam

      Re: Clean Networks?

      > "law enforcement will want the ability to 'tap' communications (with a valid warrant, naturally)"

      They want to tap communications and *say* they want to do it with valid warrants. Subtle - but clear- distinction.

  1. Mike Richards Silver badge

    Boy is he in for a shock

    ‘ Krach’s evidence for that is Chinese laws that require all companies and individuals to provide authorities with intelligence or data on request as a reason Huawei cannot be trusted.’

    Wait until Krach learns about RIPA 2000 and IPA 2016 in the UK.

    1. Jimmy2Cows Silver badge

      Re: Boy is he in for a shock

      Krach surely knows and doesn't care about those, because we're part of the 5 eyes "good guys" (insert preferred measure of "good"), and we're toeing the line on Clean Networks.

      Likely every country has similar laws for intelligence service access. Just that for some countries the vast majority of their citizens are unaware of them, or too stupid to even consider it a possiblity. Krach played on that and, for the moment, it's working.

    2. Pascal Monett Silver badge

      Re: Boy is he in for a shock

      And National Security Letters in the USA.

      It frankly strikes me as bollocks when someone can go and accuse another country of doing exactly what his country does and nobody smacks him in the face with it.

      And let's face it : is there any country in the world where a CEO is not going to comply with the local government ?

      When you find armed men in official uniforms at your door, you comply. You don't have to be in a banana republic, it works everywhere.

  2. oiseau Silver badge
    Facepalm

    Pot and Kettle

    ... USA believes Huawei is an arm of China’s government, enables its pervasive surveillance regime and is also a critical part of its intelligence apparatus.

    Hmm ...

    Is the kettle calling the pot black?

    O.

  3. frankvw

    Meanwhile, in the rest of the world...

    While Huawei may or may not be Pure Evil and bound on world domination by using all our precious private data, let's not forget the other baddies out there. The Mossad, for example, has fingers in many pies and backdoors in many data centres through "confidential" agreements with various governments who should know better. While Israel is the only one I have first hand information about, I'm sure there are more.

    The reality of the situation is that the West seems to need an enemy. It used to be the Russians, but now the cold was is essentially over and they have ceased to be our favourite threat, China has been promote to fill that role. Once they turn out not to live up to our expectations of being horrible, something else will be chosen to fill the niche. A conglomerate of all Islamic countries, perhaps, or maybe the French, who knows...

  4. nijam

    > "because the US is trusted and Huawei is not"

    Errr... well, 50% right, I suppose.

  5. fajensen Silver badge

    American Chamber of Commerce in Australia

    Too much gloating and smugness on display in front of people! It's just Too Bad that Australian exports to China are suddenly experiencing customs clearing problems and Scotty from Marketing has absolutley no idea what is wrong, so he obviously can't solve it. - https://www.scmp.com/economy/china-economy/article/3111162/china-australia-relations-termination-free-trade-deal-ahead

    1. julian.smith
      Facepalm

      What could possibly go wrong?

      Who knew that deliberately pissing off your biggest customer (30% of Australia's exports used to go to China) would have consequences?

      Scotty from Hillsong didn't think it through ... and now he's knee deep in shit and the tide is rising

      Would you be wanting some:

      - barley

      - beef

      - timber

      - lobster

      - wine

      - coal

      - education services

      - residential property

      suddenly there seems to be a problem with the Big Buyer of all of these easily substitutable products.

      You don't get rewarded for being stupid

  6. Anonymous Coward
    Anonymous Coward

    He's simply a Krach head working to assist the US government. What would you expect him to say?

  7. Anonymous Coward
    Anonymous Coward

    "economic aggression"?

    Is that what we call capitalism when they practise it?

    1. Allonymous Coward

      Re: "economic aggression"?

      Yes.

  8. JetSetJim Silver badge

    > He also found Huawei's very keen 5G pricing suspicious. "Why do they give it to you or charge not much?" he asked. "So they can get your data."

    They don't charge much so that they can get their feet through the door, and kit on the ground. Ripping a network isn't cheap, so they achieve an amount of lock-in once they're in. They charge for s/w upgrades. At least that is what they were doing in the 3&4G days.

    I have my doubts about it's "so they can get your data". Most NOCs I've touched were significantly hardened against outside access. When a port was opened, it was to a specific IP only and didn't stay open if it wasn't used.

    Sure, lots of Huawei engineers were rather naughty in their brazen approach to evaluating competitor kit when they did site visits, but I wonder how much can be said for engineers in other companies (anecdotally, it was rather rife in Huawei at times, though!). But now they're ahead of hte pack, and have an awful lot of talented engineers in their dev-labs. Methinks this Krach fella comes more from the viewpoint of having been out-competed (however fairly/legally or not).

    1. Missing Semicolon Silver badge

      where does the finance come from?

      This is the issue. Huawei can afford to invest huge amounts in R&D, and offer sweetheart deals to struggling operators to sell their kit. And supply infinite numbers of on-site engineers to make it go.

      All of this requires financial muscle, and the suspicion is that Huawei has essentially an infinite credit line to the Chinese State to achieve this. Even Boeing isn't that well supported.

      It's not about being out-competed, but out-subidised.

  9. HildyJ Silver badge
    Facepalm

    Trust has nothing to do with it

    It's not about trust, it's about fear. More nations fear what America might do versus what China might do.

    Even if a new administration is less random in its international actions, its big stick will influence nations more than China's.

  10. mevets Bronze badge

    The invisible finger.

    I wonder if Adam Smith, when conjuring the metaphor of the invisible hand, quite saw the opportunity for such a cartel-based approach to give the finger to all competition. A great day for laisse faire...

    1. Alan Brown Silver badge

      Re: The invisible finger.

      Adam Smith knew about cartels and mercantilism

      He quite rightly regarded them as anti-capitalist.

      In his view capitalism done right benefits all parties involved (including the workers) and he went as far as to say that business had a moral obligation to support its employees

      The world moved away from mercantilism at the end of the 19th century precisely _because_ of all the economic damage it causes. The UK reverted to it post WW2 and the USA followed suit in the 1960s. The resulting mess was more or less inevitable..mercantilism _is_ economic warfare which treats business as a zero-sum game with winners and losers. That's not capitalism

  11. PhilipN Silver badge

    Learning from the best?

    Creaking memory cells suggest Microsoft would approach another software company all friendly like sign confidentiality agreements get their hands on the code then wave bye-bye.

    Stacker anyone?

  12. six_tymes

    I know spreading such hatred towards the US is popular, but its also idiotic. "attacked" Hardly... more like protecting its own interests, by preventing back doors is fact. are people clueless what Huawei did just 4 years ago? are people that dumb?

    1. Anonymous Coward
      Anonymous Coward

      Nice try at misdirection but it's not about preventing back doors, it's about Huawei not allowing US backdoors.

  13. Anonymous Coward
    Anonymous Coward

    After at least 2 decades, the world has concluded

    That the US is an unreliable ally.

  14. AVR

    It's not that the US is seen as good, it's that they successfully painted Huawei as worse. There's a parallel to a certain American politician in 2016 managing to damn his opponent and thereby win.

  15. Anonymous Coward
    Anonymous Coward

    NATO

    This is why countries don’t feel like they need to contribute to NATO – they are paying the US industry tax by being required to buy more expensive not as capable technology.

    Now admitting it is a bit of an own goal.

  16. Ubermik

    Yeah the absolute LAST thing the US wants is someone spying on their citizens that isnt them or israel lol

    Anyone still think the intel "vulnerabilities" are anything but a deliberate back door to spy on governments and individuals that ordinary people stumbled across?

    I wouldnt be surprised if Huaweis REAL crime was actually making networking equipment that DIDNT have a back door built in, or that it was merely that they had the "audacity" to outsell Apple phones and were set to outsell US companies in the 5g arena, but most probably a bit from A and a bit from B

  17. amanfromMars 1 Silver badge

    Just curious ... so as to better know what best to <s>target</s>engage in deologue

    But the US believes Huawei is an arm of China's government, enables its pervasive surveillance regime and human rights abuses, and is also a critical part of its intelligence apparatus

    And the equivalents toiling and trailblazing in the West, and a critical part of its intelligence apparatus? Who/What/Where be they, residing and presiding and leading with a brand new vital and virile global technology sector ....... or even just exercising effective influence able to steer the future direction of critical parts of intelligence apparatus ..... should that be all that is really required in such endeavours?

    Do they exist to be contacted about flaws detected which are exploitable and exportable, and are being exploited and exported? Do they have real personal points of contact or are they defaulted to think humans will accept talking to machines which may or may not have one jumping through hoops and browsing through menus to end up nowhere near anywhere near where they need you to be ..... and thus one concludes there be a definite lack of human interest at those particular and peculiar locations so one naturally ventures elsewhere, and somewhere foreign and exotic and erotic is always invariably nice and probably quite terrifyingly alien territory too to many, given the stern tests one would surely be subjected to if a stellar object of mutually beneficial, positively reinforcing desire. :-) Some though, who may or may not be just a few, would simply just love it and excel to excess with successful engagements there.

  18. Anonymous Coward
    Anonymous Coward

    Funny thing is

    Funny thing is why didn't China turn it around and point out that the U.S. has similar legislation that forces network equipment vendors and telecoms to aid in spying and are even have secret security letters that prevent them from discussing or publishing about it.

    1. amanfromMars 1 Silver badge

      Silver tongued devils are no funny daemons and can be priceless/invaluable ....

      ....... and highly prized and much appreciated in all the best of influential circles

      Funny thing is why didn't China turn it around and point out that the U.S. has similar legislation that forces network equipment vendors and telecoms to aid in spying and are even have secret security letters that prevent them from discussing or publishing about it. .... Anonymous Coward

      Probably concluded that it wasn't necessary, AC, as Uncle Sam has manufactured more than enough rope and is never content unless or until it has hanged itself, but that is only a guess/crazy opinion/likely valid reason offered with no clearly apparent evidence, however, whenever has that ever before stopped a crooked operation from operation, for as we know, having been told before and not so long ago too, in this three carriage train of sentences from one of Uncle Sam's finest .......

      "There's another way to phrase that and that is that the absence of evidence is not the evidence of absence. It is basically saying the same thing in a different way. Simply because you do not have evidence that something does exist does not mean that you have evidence that it doesn't exist." ..... Donald Rumsfeld

      Indeed, in deed, it's a funny old world .... :-) RIP Margaret Thatcher :-)

  19. PanchoVilla

    Lets see now, Google spies on you,facebook spies on you,whatsup spies on you, Microsoft spies on you,.....Apple, Verizon,ATT,the NSA, they ALL spy on you, Cisco router are all compromised, ever heard of "PRISM", Edward Snowden told us that all "Five Eyes countries spy on us".

    Yet we blindly believe anything that comes from the USA.

  20. Anonymous Coward
    Anonymous Coward

    Re-write needed.......

    Quote: "But the US believes Huawei is an arm of China's government, enables its pervasive surveillance regime and human rights abuses, and is also a critical part of its intelligence apparatus."

    *

    Needs a re-write:

    "But everyone believes the RSA, Cisco and Jupiter are arms of The USA's government, enabling its pervasive surveillance regime and human rights abuses, and is also a critical part of its intelligence apparatus."

    *

    Pot and kettle (again)......but fixed.

  21. sitta_europea Silver badge

    I have personally seen state-sponsored Chinese attackers siphoning live data from clients.

    In my experience, no American attacker has ever done anything like that.

    That's just my experience of course, but it does cover nearly three decades of Internet vigilance.

    I qualified as a Chartered Electrical Engineer in 1980. In the following four decades I have personally seen (and even unwittingly purchased) many illegally produced, unsafely made and fraudulently sold products -- many of which have carried forged BSI, CE, TUV and numerous other certification marks. There are several examples on my desk as I write this. They were [B]all[/B] made in China.

    I have [B]never[/B] seen anything like that made in the USA, nor for that matter made in Europe.

    The Chinese manufacturers with whom I have come into contact seem to me in general to be dangerous thieves, bare-faced liars and incorrigible criminals, and if I never see another Chinese-made product in my entire life it will be too soon.

    If that seems racist then I apologize, because I have nothing against anyone purely because of their race.

    It's because of how they behave.

  22. CJ Hinke

    BRICS, and backed by gold

    Honestly, the words “trust” and “business” are incompatible. Who, exactly, doesn’t trust China? Not consumers, they love cheap kit. Manufacters love China; without China’s tech & labour, they’d have to at least double the prices.

    Governments? Ah, here we’re geting somewhere. China is not part of Western designs on empire, particularly, ahem, America. China doesn't even partner with the World Bank. It founded the BRICS (Brazil, Russia, India, China, and South Africa) financial structure precisely for non-aligned emerging nations.

    BRICS member states have 42% of the world’s population, 23% of GDP & 18% of global trade. Scary, huh, neocons? (Pretty damn tired of that old, tired con, too.)

    Among them, China is the only country on the planet which backs its currency with physical gold. I'm no kind of right-wing libertarian, just stating a fact. From BRICS mission statement: “to promote peace, security, development and cooperation”. (Listen, we’re not having any of this airy-fairy nonsense!)

    China doesn’t play by America’s rules so Western nations profit less handsomely by them. Belt-and-Road takes care of international distribution even if the West pulls the plug.Huawei is a great, well-managed company producing quality kit for half-price—doesn’t that sound downright DANGEROUS!?!

    Okay, 5G, from Huawei or anybody else is complete nonsense but still; it would be a better solution to cancel 5G's adoption entirely & stick with 4G

    Would it ever upset the applecart if investors decided RMB based on gold was a safer bet than US green toilet paper, backed by promises.

    Lest you think this has some high-minded human rights & democracy implications, well, would you like fries with that? Privacy, hah: the USA already pwns YOU!

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