China’s primary 5G carrier, Huawei, is testing its equipment in 66 countries with 154 carriers. If China wins the race for 5G, what could it mean for America?
“ So in areas where the United States enjoys tremendous economic advantages at the moment could be under threat. ”
What implications would it have for national security?
“The first ten minutes of the next great war will be fought in the cyber domain. And that’s where the Pearl Harbors of the future will take place.”
Huawei is the world’s biggest telecommunications company. But is it a normal commercial entity?
Joshua Phillips: “For the Chinese Communist Party, Huawei is a key foundation for its broader objectives in spreading the China model.”
Seventy-seven years ago, America did not foresee Japan’s attack on Pearl Harbor. Could history repeat itself?
America is the single most powerful country on the planet. It has enjoyed extraordinary technological, economic and military advantage over the rest of the world for decades. But today, that foundation might be shaking. China is on the verge of winning the 5th strategic domain, which is the cyber domain. The other four are land, sea, air, and space. China has engaged in this battle against Western powers, primarily the U.S., in a systematic and dedicated way, and most importantly, without the U.S. even noticing it until recently. If China does win, what will the world look like for the rest of this century? Can this trend still be reversed? We will explore these questions in this episode of 《Zooming I》.
Part 1: A Dire Situation
On February 25-28, Barcelona will hold the 2019 Mobile World Congress. Telecommunication gurus around the world will gather to announce their operation plans. Many believe this is one of the main indicators of what is going to happen in that industry. The theme for this year is 5G. Chairman and CEO of Rivada Networks, a U.S.-based communications technology company, told 《Zooming In》this meeting is extremely important.
Declan Ganley（电信公司Rivada Networks 董事长兼总裁）：“5G非常非常重要。这是无线产业的一场巨大革命。据我们所知，这可能是自移动电话问世以来无线领域最大的单一支点。网速将会大大提高，数据的容量、我们将要移动的信息量将会极大增加，成倍的增加。5G的使用量和对经济的影响将是巨大的。例如，我看到有经济学家做出的估计，如果5G被用于他们所说的开放接入无线模型，它至少会使美国的GDP增加0.75%。而且任何采用5G的国家GDP都会增加0.75%。同时，我们通过小型设备在任何地方的信息或者数据的交流，不只是打手机和上网，还包括空调、呼叫系统、交通、安全、医疗、药品递送、娱乐和农业等诸多还未使用5G技术的领域、将会以前所未有的方式应用5G技术。它将触及我们生活的方方面面。”
Declan Ganley:“ 5G is very, very significant. It’s a massive revolution in the wireless industry. It’s perhaps the biggest single pivot point in wireless since the advent of the mobile phone as we know it. The speeds are going to be greatly increased, the capacity for data, the amount of information that we’ll be moving, massively increase, a multifold increase in that. And the uses and the impact on the economy of 5G is going to be massive. I’ve seen economists’ estimates pointing that 5G, if it’s used in what they call an open access wireless model, will add at least 0.75 percent to U.S. GDP, for example, and the GDPs of any country that adopts it. So you’re looking at an industrial shift, a technology shift that has the potential to add in the region of at least between .75 and over 1 percent to GDP of any given country in any given year. That’s a big, big economic shift. And, in fact, I think it’s going to be even more impactful than that, but that’s for another discussion. Also, everything that we do, anywhere where information or data is exchanged from small devices, not just mobile phones and data, but air-conditioning, calling systems, transportation, security, health care, pharmaceutical delivery, entertainment, and agriculture, many, many fields are going to be using 5G technology where we haven’t–in ways and manners that we haven’t seen before. It’s going to touch every aspect of our lives. ”
The 2019 Mobile World Congress is expected to produce the world’s 5G rollout blueprint as telecommunicators announce which company’s 5G equipment they will use.
Declan Ganley（电信公司Rivada Networks 董事长兼总裁）：“至关重要的是，5G的部署需要什么样的架构和技术。坦率地说，考虑到中国的问题，5G的架构是否会在中国开发并由中国公司交付，还是在世界其它地方由非中国公司交付。”
Declan Ganley: “What is pivotally important is what architecture, what technology one deploys for one’s 5G deployments. And very frankly, given that the question here is China, is whether or not that architecture for 5G is going to be architecture developed in China and delivered by Chinese companies or architecture delivered somewhere else in the world and delivered by non-Chinese companies.
Chinese company Huawei is the largest telecoms equipment company in the world and China’s primary 5G equipment provider. They will also attend the congress. At a Hudson Institute event last November, Ganley said Huawei was planning a large wave of announcements. In other words, a victory party declaring its dominance in the cyber domain.
Declan Ganley（电信公司Rivada Networks 董事长兼总裁）：“地图上用红色表示的国家，我想有61个，代表已经签约将使用中国设备，主要是华为设备来建构5G网络的国家。粉色代表的是那些有意使用华为设备，而且已获政府批准正处于测试阶段的国家。这些是公开的信息。”
“ In the UK for example, you have a situation that publicly announced three, which is owned by …HK company has announced it will do its 5G rollout with Huawei. Not publicly announced but our information is that. EE, the other carriers of UK is doing the same thing, is going with Huawei. And that vodafone, is going with Huawei outside of everywhere except for greater London. So the rest of UK will be a Huawei 5G network. And The countries that are filled in red, I think there are 61 of them, that map represents countries that have already signed 5G contracts to deploy that 5G network using Chinese equipment and primarily Huawei equipment. The countries that are pink are countries that are currently testing that equipment in government approved testing operations that are leaning in that direction right now. This is based upon publicly available information. ”
Why have so many telecommunications companies chosen Huawei as their 5G equipment provider? The single most important reason is the Chinese company provides equipment at a much cheaper price thanks to heavy Chinese government subsidies. But that’s not all.
Declan Ganley（电信公司Rivada Networks 董事长兼总裁）：“在英国，在某些欧洲地区，华为不仅在提供设备和融资上给予优惠，而且在基础设施建设上也搞低价倾销。比如在建设信号发射塔等项目上，我们有确凿的证据表明，华为的报价比其它所有厂商都低至少40%。这说明中共政府补贴了其基建成本。因为英国建筑承包商对华为、爱立信、和诺基亚都使用同等价格，所以华为得到了政府补贴。 中共政府这么做的目地是有意要把爱立信，诺基亚，和三星挤出市场。这会迫使厂家为了降价，而降低网络安全标准。它是为了牢牢控制这个基本安全领域、网络领域，并进入那个网络的关键部分。”
“In the UK, in some European markets, not only the likes of Hua Wei funding providing discounted equipment and discounted funding, even the rollout cost. That’s where the concrete are being poured, the towers are being built, we have reliable information they come in 40% cheaper than the next nearest competitor. The only way you could do that is that you even subsidise the rollout cost because a British contractor is not going to charge less to Hua Wei than to Ericsson and Nokia, so that’s being subsidized. I believe a deliberate policy of subsidization is to knock Ericsson, Nokia and Samsung out from the market. It is to make people cut corners on the things of security, and it is to assert the control of this essential security domain, the cyber domain and get into the edge of that network.”
China also pioneers in 5G deployment at home. At the Hudson Institute event, Brian Hendricks, Nokia’s head of policy and government relations, explains what will happen if China deploys 5G first.
Declan Ganley（电信公司Rivada Networks 董事长兼总裁）：“据我所知，美国安全机关最担心中国（共）在5G领域取得领先。我就想了解他们担心的具体是什么。是担心中共抢先建设5G网络？是不是不搞5G网络建设就会大大落后？这只是举几个例子。美国开发商一旦获得频率授权，就可以在国内建构初级5G网络。这将提高网速到2G/秒，并缩短网络延时，但这还不是真正意义上的5GB，对吧？他们眼下还没有频率资源来进行真正的升级，进一步发展到网速10-20 GB/秒，没有延时的5G网络，中国(共)、日本和韩国都有能力建构，一旦他们抢先进入5G时代，而美国还处在5G网络初级阶段的话，那么我刚才讲过的那些5G应用项目，比如互联网规模的IT应用，垂直行业中的医疗和运输业，以及相关的应用开发工作，都将移到建有5G网络的国家。所以一些美国的优势领域会面临威胁。”
“I know one of the things that worries the national security establishment of the United States greatly is what if China wins the race to 5G? And my question to them is always, what does that mean? Does that mean they deploy first? Does that mean there is a huge lag until the fully evolved 5G gets deployed? Just a few examples. US deployers are poised to have spectrum in hand to do early stage 5G deployment in the United States. Those will give you capabilities of 2Gb/per second, lowering of latency. But that’s not fully evolved 5G, right? They don’t have the assets they need right now in the way of spectrum to really upgrade that, to evolve that towards that 10-20GB/per second, no latency model, China does, Japan will, South Korea will. And if they get there first, and there is a preachable gap before the U.S. get there, then most of the use cases I have described, web scale, the vertical connected healthcare and transportation, the development work for that, is gonna go where the network supports those use cases. So in areas where the United States enjoys tremendous economic advantages at the moment could be under threat. ”
The cyber domain is of great importance not only for the economy but also for security. In terms of warfare, there are five strategic domains today: land, sea, air, space and cyber. To gain dominance in the first four domains takes a long time and is extremely expensive. According to Ganley, China found a shortcut and an inexpensive way to achieve dominance in the most important cyber domain by making the world deploy 5G networks with Chinese technology.
Declan Ganley（电信公司Rivada Networks 董事长兼总裁）：“一般来说，你会向中国的5G提供商寻求帮助，因为他们得到了政府的补贴以及资金支持，因此他们的成本比其它任何公司都要低40%。因为他们得到了中国政府的补贴。那么这些补贴的成本是多少呢？可能在全球范围内有1000亿至2000亿美元，或多于此数。但要比制造航母战斗群的成本低。以这样的成本就足以统治整个网络领域。在网络领域，但愿不会发生大战，如果发生战争，其前10分钟将在网络领域打响。网络突袭就是未来的珍珠港事件。谁主导了5G世界，谁就会拥有巨大的战略、安全优势，坦率地说，还有经济优势。在21世纪的大环境中，中国发现了一个机会，北京发现了一个机会，即要在全球范围内统治网络领域，利用移动运营商作为他们的特洛伊木马，为他们游说，将他们的网络架构嵌入市场，并利用补贴的优势在全球部署5G网络，这是一个绝妙的计划，几乎奏效了。”
“ So on average you’re looking at going to a Chinese 5G provider because they’re subsidized and because they have government financing backing them, they’re coming in at least 40 percent less cost than anybody else. Now, it’s subsidized by the Chinese government. Now, what’s the cost of those subsidies? Maybe around the world 100, 200 billion dollars, a little bit more. Less than the cost of an aircraft carrier battle group. And that way you get to dominate a whole domain—cyber. The cyber domain is—God forbid there is another great war—the first ten minutes of the next great war will be fought in the cyber domain. And that’s where the Pearl Harbors of the future will take place. And whoever dominates the architecture of 5G has got an enormous strategic, security, and frankly, economic advantage. And what you’re seeing going on here is the great game in the 21st century environment where China has spotted an opportunity, Beijing has spotted an opportunity, to dominate the cyber domain globally, to use mobile carriers as their Trojan horses who do the lobbying for them to get their architecture in, and to deploy these 5G networks globally basically by subsidizing them. It’s a brilliant plan, and it has almost worked. ”
Coming up, if a country uses Huawei’s technology for 5G deployment, will that pose any risk to its national security? What will happen to ordinary consumers?
Part 2: Huawei Is an Apparatus of the CCP
This is a 172-page Huawei internal document written in 2015. It was leaked in 2018. The document is entitled“VCM (video content management) Operation Guide”. It was used to train the Chinese regime’s internet police on how to monitor, analyze, and process video content in real time. The police were expected to send out alerts if they found anything “suspicious”. It is a standard operation for China’s“Golden Shield Project”，used to block access to sensitive information, and the “Skynet System”， used for surveillance of the whole society.
Huawei has also played an extensive role in building and upgrading China’s Great Firewall, and it continues to function as a core technology and equipment provider for all of China’s surveillance apparatus. According to Huawei’s official website, among more than one hundred clients who are using Huawei’s video cloud service, over half of them are local police departments, prisons, and police schools. Huawei also publicly announced that they will undertake the construction of more than 30 “safe cities” across the country. A “safe city” is the local public security’s urban surveillance system.
Huawei’s founder Ren Zhengfei has a background in the Chinese People’s Liberation Army (PLA). His wife, Meng Jun, is the daughter of a prominent PLA political officer. Huawei Chairwoman, Sun Yafang, according to CIA reports, has a background in the Ministry of State Security (MSS), China’s intelligence agency.
Does Huawei pose a national security threat to countries who use its technology to deploy 5G networks? Ganley likens it to getting someone else to build your ship.
Declan Ganley（电信公司Rivada Networks 董事长兼总裁）：“如果你的船是别人给造的，那人家就知道哪儿有焊接，门的合页在哪里，结构上哪些地方薄弱，哪些地方坚固，哪些地方可以进水，哪些地方不能进水，机舱在哪里，怎么运作的，发动机最高可以达到多少温度，什么时候船体会开裂，哪些部位最容易出事。但如果船是你造的，船，还有船上的网路，甚至连船主都不知道的东西，你都知道。这倒不是因为船上的船员一直都是你的人，你没有这个必要。但是如果你想接管这只船，你想用它达到你自己的什么目的，如果你想毁掉它，你知道应该从哪里下狠手。你也知道走哪条航路，等等。针对你刚才提的问题，我这么解释是有点简单化了，但是，是有道理的。设备也好，软体也罢，所有这些资讯运行的技术也罢，谁控制了供应、建造、维修，谁提供了设备，谁就知道它们的软肋在哪里，强在哪里。无论何时何地，只要他们想破坏那些网路，就知道怎么下手。”
Declan Ganley:“ If somebody builds your ships and they know where the welds are, where the hinges of the doors are, what the weak structural points are, what the strong points are, where you can flood, where you can’t, where the engine room is, how it operates, what temperature the engines can max out at, when do things start breaking, what are the vulnerabilities. If you’re the ship builder and you know those things, you know things about that ship, that network, that even the ship owner doesn’t know. And it’s not that you may have your crew onboard the ship all of the time, you don’t need to. But if you want to take over the ship, and you want to use it for your own purposes, you know where to cut the hulls. You know the routes to take, et cetera. It’s a simplistic way of explaining it, but it’s just, as you asked the question. And the equipment, the software, the technology over which all of this information runs, whoever controls the supply, the architecture, the maintenance, who’s providing the equipment, they know where the weaknesses are, they know where the strengths are, they know how to compromise those networks when and where they want to.”
萧茗（Host/Simone Gao）:除了政府层面的安全问题外，对于华为5G网路的普通消费者来说，他们的隐私也会受到影响吗？就这一问题，我采访了《大纪元时报》资深调查记者Joshua Phillips先生。
Besides government-level security, could the privacy of ordinary consumers also be compromised on a Huawei 5G network? I had this discussion with senior investigative reporter Joshua Phillips from 《The Epoch Times》.
“ If a country uses Huawei technology and equipment for their 5G deployment, besides national security implications, what impact will it have on ordinary consumers?”
Joshua Phillips（《大纪元时报》资深调查记者）：“基本上来说，5G技术会让中共或者说华为，通过华为获得一个电磁频谱，这个频谱可以访问或损害该领域内覆盖的任何设备。我的意思是说，就像你家的Wi-Fi一样。这个范围内的任何设备都可以访问Wi-Fi网路。我们关心的是，如果附近正好有政府机关或军事单位，假设普通消费者家中使用的是5 G技术，或者说一个非常大的公司有一个很大的5 G网路使用同样的技术，如果有人能访问或破坏属于另一个单位的网络设备，这意味着什么呢？这些都是下一代网路安全的问题，但是，却是5G正在带来的非常现实的问题。当然，这也是美国要禁止华为5G技术的原因。”
“ Basically, 5G technology would give the Chinese Communist Party—or, say, Huawei, them through Huawei, access to an electromagnetic spectrum that is able to, say, access or compromise any device within that field. I mean, similar to Wi-Fi in your home, right. Any device within that field is able to, say, access that Wi-Fi network. The concern is that if, say, government offices or military offices were nearby, let’s say a consumer home that is using 5G technology, or say a big business that has a very large, say, 5G field around it from these technologies, what does that mean in terms of how they can access the devices or compromise the devices in that other facility. These are kind of next-gen cyber security concerns, but very real concerns that 5G is bringing about. And it’s why the United States, of course, has banned Huawei 5G technology.”
“ Tell us what Huawei really is. We know it has connections to the Chinese military. It also provides surveillance equipment to the Chinese police force. Does that make it abnormal and not trustworthy?”
“I’d say the bigger picture, aside from, say, the backgrounds of the individuals who run the company, are what Huawei is being used for by the Chinese Communist Party. If you look at, say, the Chinese Communist Party’s “One Belt One Road” initiative, this isn’t just China, China going in and building infrastructure projects. This is the Chinese Communist Party implementing its new GPS system, it’s implementing its new, say, internet infrastructure, which is separate from the normal internet infrastructure. And Huawei plays a role in that. And it’s also implementing social control systems. Things like, similar, I’d say, to the social credit system. Things similar to the Great Firewall and the Golden Shield. And keep in mind Huawei is involved in both the Great Firewall and the Golden Shield. Huawei plays a key role in these totalitarian technologies that these countries where China’s doing these infrastructure projects can turn on if they wish. So China is not using Huawei as just a normal company. For the Chinese Communist Party, Huawei is a key foundation for its broader objectives in spreading the China model. And this is a totalitarian communist system that looks to use high technology to—I mean, if you look at the social credit system, monitor your every online purchase, monitor every friend you make, look at what your social connections are, what your beliefs are, what are your political views. And it will judge you and rate you and give you a citizen score based on these things. And your freedom in that society or your oppression in that society are going to be determined by your rating. China is exporting this technology, and Huawei plays a role in it.”
Coming up, is it too late to stop China’s 5G dominance?
Part 3: Is it Too Late? What Can Be Done?
On December 1, 2018, Meng Wanzhou, CFO of Huawei and daughter of Huawei’s founder, was arrested at a Vancouver airport after an extradition request by the U.S. over alleged Iran sanctions violations.
Meng’s arrest shocked Huawei. Will the arrest impact its 5G efforts?
Declan Ganley（电信公司Rivada Networks 董事长兼总裁）：“当然有影响。这迫使用户们去审视华为的经营手法和策略，以及评估使用其产品可能带来的风险。任何用户都会去思考，能不能把国家基础信息设施的建设，交给一个由集权的共产党控制的，按共产党组织的模式来运营的公司。其结论是显而易见的。”
Declan Ganley: “It certainly is—focuses people’s minds on tactics and methods and risks that are associated with using certain providers. My understanding, which is limited, of what that was about, is it’s with regards to some sanctions-related issues. In terms of Huawei’s ability to—or the bigger challenge for Huawei is can Huawei be trusted to deliver vital national infrastructure in any given country around the world given the top-down nature of the Chinese Communist Party and the way that it operates. And I think that questions answers itself.”
Meanwhile, according to BBC news, in early December last year, British Telecom said it will not use Huawei equipment in the heart of its 5G mobile network when it is rolled out in the UK. BT started removing Huawei equipment from its 3G and 4G networks in 2016. The company spokesperson said they are applying these same principles to their current Request for Proposal for 5G core infrastructure.
While Huawei will not be selected as a vendor for the core 5G network, the company spokesman said it “remains an important equipment provider outside the core network, and a valued innovation partner."
However, another UK mobile carrier, Three, announced last month that it is working with Huawei on a 5G home broadband demo in London.
America, Australia, and New Zealand have banned Huawei from their 5G rollout. South Korea’s largest carrier also left Huawei off its list of 5G vendors. Germany’s Deutsche Telekom (DTEGn.DE) announced it would review its vendor strategy. France’s Orange (ORAN.PA) said it would not hire the Chinese firm to build its next-generation network in the country.
萧茗（Host/Simone Gao）:改变现状不是一朝一夕的事。Ganley先生认为中国（共）公司的产品之所以能在海外有市场，是因为美国和其它西方国家的主要网络公司，必须花大钱向其政府单独购买运营频率。然后向消费者按流量收费。与此同时，他们为了收回购买频率的成本，到处寻找低价设备和低价承建商。中共正好钻了这个空子。这些大的网络公司于是成了中共政府的说客，帮助中国公司取得政策优惠。要改变这个局面，应该允许各网络公司用统一价格向政府购买运营频率。政府就可以得到稳定的收入。更重要的是，市场将决定数据流量的价格。这是一个长远计划。眼下的任务是如何阻止中共技术和设备，进入各国的5G网络。这场战斗早就开始了，只是美国一直都没有意识到。我是主持人萧茗。请点赞我们的脸书网页，并订阅我们的YouTube频道。《Zooming In with Simone Gao》。 感谢收看本期节目。我们下次再会。
There is still a long way to go. Ganley believes the real reason China has won a large chunk of the market is because the major commercial networks in America and other Western countries run on a retail model where they pay lots of money upfront to purchase spectrum from the government. Then they charge consumers as much as they possibly can for data. Meanwhile, they look for the cheapest equipment and rollout costs to further offset the cost for spectrum. This equipment comes from China. And these big commercial carriers end up serving as lobbyists for Chinese companies to gain regulatory favors from their government. So in order to change this, the retail model needs to be flipped to a wholesale model where everyone is able to buy spectrum at a reasonable price. The government would get a constant income stream from leasing the spectrum. Most importantly, the market would decide how much data is really worth. This seems like a long-term strategy. For now, the battle is whether or not the world will build its 5G networks with Chinese technology and equipment. And for that, America has been in a fight for a long time without realizing it. I am your host Simone Gao. Please like our Facebook page and subscribe to our YouTube channel at《Zooming In with Simone
Gao》.Thanks for watching and see you next time.
Editors：Julian Kuo, Bonnie Yu, Frank Lin, Bin Tang, Melodie Von, York Du
Narrator: Rich Crankshaw
Transcription: Jess Beatty
Translation：Greg Yang, Frank Yue, Juan Li
Special Effects：Harrison Sun
Assistant producer： Bin Tang, Merry Jiang
Host accessories are sponsored by Yun Boutique
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