Bryan Roh Cyber Security and Emerging Threats

The Asia-Pacific Mulls Over 5G National Security Concerns

The Asia-Pacific Mulls Over 5G National Security Concerns

As 5G begins to steadily rollout in cities across the globe, governments have been wrestling with how to deal with one of the world’s leading 5G equipment suppliers. In 2019, Huawei, a Chinese multinational tech company, was declared to be the world’s top vendor of 5G-enabled smartphones. Huawei’s global market share in the telecommunications equipment sector was estimated to be 30% by September 2020; when that percentage was combined with ZTE, another multinational Chinese supplier of 5G equipment, their global market share rose to 41%. Needless to say, Huawei’s increasing prominence in the global 5G market has not gone unnoticed.

Governments concerned about the prospect of Chinese vendors like Huawei supplying 5G equipment to their telecommunications providers explain their apprehension on primarily two fronts. First, the findings from reports published by governments and the private sector suggest that Huawei has not demonstrated an acceptable level of commitment towards prioritizing the cybersecurity of its telecommunications equipment. Second, experts have noted that the country’s 2017 National Intelligence Law requires all Chinese organizations to comply with any data requests made by Chinese authorities. Countries like the United States therefore maintain the stance that Huawei and other Chinese 5G vendors are legally required to share confidential data from the 5G networks it helps build and maintain abroad when China’s state intelligence authorities demand it.

While western European countries have generally been sympathetic towards the national security concerns the U.S. has against Huawei, for countries in the Asia-Pacific region, the reception has been mixed.

The Republic of Korea (ROK), better known as South Korea, was the first country to launch the world’s first nationwide 5G network and is now considered the world’s leading country in 5G deployment. At the time of this writing, the South Korean government has not passed any specific rules governing 5G usage in the country and decided against interfering with domestic companies that choose to utilize Huawei’s 5G products. The ROK for instance allowed one of its domestic mobile carriers, LG Uplus Co., to launch a 5G network utilizing Huawei technology in 2020. Indeed, despite having historically close ties with the United States in both economic and military domains, South Korea has chosen to remain quiet about the Huawei controversy and has adopted a middle-ground approach to the issue.

This was showcased back in 2018 when the country’s former Minister of Science and ICT Yu Yung-min stated that the South Korean government could not force private companies to stop using specific brands of foreign equipment. ROK officials reemphasized Yu’s point during senior economic talks with U.S. officials in October 2020 when the American side pushed to get LG Uplus Co. to stop using Huawei equipment. The South Korean government did, however, acknowledge the importance of America’s Clean Network program, which is an international initiative that was launched by the former Trump administration to roll back the influence of Chinese suppliers of 5G infrastructure in the international sphere. ROK officials ended the talk by agreeing to “work closely with the US side and cooperate in terms of technological issues”.  

 South Korea’s reluctance to fully align their 5G stance with the interests of Washington is not particularly surprising. China has and continues to be its number one trading partner: In 2018 South Korea’s export sales to China reached 25.9% ($160 billion) of its total export sales, while China accounted for 21.1% ($107 billion) of its total import sales that year. Beijing has also proven in the past that it will take economic retaliatory measures when the ROK sides with the U.S. on issues it deems significant, such as the deployment of the Terminal High Altitude Area Defense (THAAD) anti-missile system in 2017 at Washington’s request. The economic fallout from the THAAD incident reportedly cost South Korea $5.1 billion in lost revenue that year. And it is important to not forget that China holds a great deal of power over the historically belligerent North Korea, which South Korea relies on to keep its northern neighbour in check.

Japan has shown a greater willingness to consider the U.S. position on Huawei. In December 2018, the Japanese government put forth a policy to block all telecommunications equipment that could pose a national security risk from public procurement. “The purpose [of the policy]”, stated former Japanese Prime Minister Shinzo Abe, “is to stipulate at each ministry and agency what system and procurement procedures should be protected”. While the policy did not bar any specific vendor or company from participating in Japan’s 5G marketplace, government sources indicated at the time that Huawei and ZTE had “effectively” been excluded from public procurement. However, the Japanese government continues to refrain from joining initiatives, such as the Clean Network program, that explicitly calls for excluding vendors from specific countries like China from its telecommunications networks.

Japan is also taking advantage of the opportunity presented by Washington’s ban on Huawei to offer their own 5G solutions to the world as a promising alternative option. In July 2020, for example, the United Kingdom requested that Japan assist in developing its 5G infrastructure, informing the Japanese government that it may consider replacing Huawei with NEC and Fujitsu, which are two Japanese tech companies that provide both 4G and 5G network equipment. This request was made shortly after the UK government’s decision to ban the purchasing of new Huawei 5G products and phase out all Huawei devices in the country’s 5G networks by 2027.

The UK’s invitation to Japan comes at an expedient time. Both the Japanese government and the Japanese tech industry have made efforts in 2020 to advance the development of 5G in the country. The Japanese government, for instance, started offering tax incentives to encourage domestic network service providers to seriously consider the cybersecurity of their 5G infrastructure. Three of Japan’s largest telecommunications providers, NTT DOCOMO, KDDI, and SoftBank, have also launched 5G services for the Japanese public in March 2020.  

A member of the Five-Eyes intelligence circle, Australia was one of the first countries to ban Huawei from providing Australian telecom operators any 5G equipment. In August 2018, the Australian government decided to ban Chinese vendors of 5G products like Huawei and ZTE, citing that their supplying of 5G technologies posed a risk to Australia’s national security interests. As former Australian Prime Minister Malcolm Turnbull stated, the decision to keep Huawei and ZTE out of Australia’s 5G networks was influenced by the fact that Chinese companies like Huawei and ZTE are legally required to cooperate with China’s intelligence agencies. The Australian government has also stated that by allowing high-risk vendors like Huawei to participate in building Australia’s 5G networks, the government risked losing control of critical infrastructure that could be dependent on Huawei and ZTE technology.  

China would respond to the ban by lodging a complaint to the World Trade Organization (WTO) in 2019, claiming that it was “obviously discriminative” and broke global trade rules set by the WTO. The Australian government however has remained steadfast in its decision, with Australian Home Affairs Minister Peter Dutton stating that the government has no plans to revisit its ban on Huawei anytime soon.

The global dispute over Huawei is ultimately tied to geopolitical differences regarding the People’s Republic of China. In the Asia-Pacific, a rift is already developing, dividing countries on the basis of their government’s policy towards Chinese vendors of 5G products and the Chinese Communist Party. Those that share the same national security concerns as the U.S. will undoubtedly seek alternative 5G suppliers, but it would be a mistake to assume that America’s allies – even those in Europe – will eagerly fall in-line at Washington’s behest. Terms like technological autonomy and digital sovereignty are already being brought up in the Huawei dispute to emphasize the importance in states making critical cybersecurity decisions for themselves.

In the end, it may come down to governments performing their own risk analysis to assess what level of influence Huawei should have in developing their country’s next generation mobile networks.

 Featured Image: 5G Security (2021), by Bryan Roh. Used with permission.

Disclaimer: Any views or opinions expressed in articles are solely those of the authors and do not necessarily represent the views of the NATO Association of Canada or any organization.

Bryan Roh
Bryan Roh is a research analyst for the Cybersecurity and Information Warfare program at the NATO Association of Canada. He is a graduate of the Cybersecurity Analyst Diploma Program at Willis College and also a graduate of the University of Toronto where he specialized in security issues related to the Asia-Pacific region. He is a former Compliance Director for the G7 Research Group at the Munk School of Global Affairs & Public Policy and has published his work in numerous online platforms. Bryan is also a former member of the Canadian Armed Forces where he initially developed an interest in information security and national security issues.