Analysis: Intelligence, the new front in the US-China struggle

Nihat Ali Özcan

Tensions between the U.S. and China shifted to another course from tariffs. Last week, the Canadian police arrested Meng Wanzhou, Huawei’s chief financial officer and daughter of the firm’s founder, upon the demand of the U.S. The Chinese government’s announcement showed strong reactions to Canadian and American authorities and said that if Meng does not get released immediately, it will have serious consequences. 

With its controversial legal dimension, the arrest was based on the grounds that Huawei’s subsidiary called Skycom evaded sanctions on Iran. U.S. authorities claim that Skycom exported forbidden technology and equipment to Iran. As a matter of fact, open sources noted that between 2009 and 2013, China and Iran deciphered the identities of many local spies, using very similar technologies and working for the U.S. This situation was not bearable for the U.S.

Although the only problem seems to be the evaded sanctions on Iran, the real issue is the increasing competition between the U.S. and China. The trade war is only the tip of the iceberg. The unseen part is the progressively hardening and widening military subjects, including intelligence and counter intelligence. The cyber area, consisting of signal and surveillance technologies, forms the most significant part of this struggle.

Huawei is in the leading position regarding cyber technologies, smart phones and construction of telecommunication’s infrastructure. It is active in 170 countries. Last year, its turnover exceeded $100 billion. For the first time, Huawei got ahead of Apple in smartphone sales. It seems like it will surpass U.S. companies especially with its technological breakthrough in the 5G field where internet speed will be centuplicated than the 4G and also areas such as artificial intelligence and smart cities.

Technological capacity does not only offer economic gain. It is also increasing China’s intelligence capacity. This situation is on the agendas of the U.S., the U.K., New Zealand and Australia, known as the “five eyes”. However, Canada, within the five eyes, was more tolerant up until yesterday, because Huawei invested significantly in Canadian universities and telecommunication industry and saw the country as a diving board for the U.S. Nevertheless, the latest developments show that Canada’s approach will change as well.

The “five eyes” countries see Huawei, founded by several military officers in 1987, as the greatest extension of China’s intelligence. Even though Huawei introduces itself as a private sector company, for China the situation is quite different. Taking into consideration the suspicious growth trend of the country, the volunteer and mandatory cooperation of all Chinese people as required by law and the company’s field of activity, Huawei’s function in intelligence cannot be overlooked. Thus, the U.S., U.K. and Australia prohibited the use of Chinese-produced smartphones, power plants and computers within public institutions, especially military and intelligence institutions. Such that, the Australian government objected to the submarine connection of Papua New Guinea’s internet infrastructure, built by the Chinese government, to its own system due to doubts in cyber-attack and espionage.

China’s rise in every field and its silence worries the U.S. and its partners. In other respects, the security leg of the “Belt and Road” initiative of China means to carry into effect more security, information and intelligence activity. In a world where signal is the most important source for data collection, it is not a surprise that we will listen to more Huawei stories.