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（電信公司Rivada Networks 董事長兼總裁）：「5G非常非常重要。這是無線產業的一場巨大革命。據我們所知，這可能是自移動電話問世以來無線領域最大的單一支點。網速將會大大提高，數據的容量、我們將要移動的信息量將會極大增加，成倍的增加。5G的使用量和對經濟的影響將是巨大的。例如，我看到有經濟學家做出的估計，如果5G被用於他們所說的開放接入無線模型，它至少會使美國的GDP增加0.75%。而且任何採用5G的國家GDP都會增加0.75%。同時，我們通過小型設備在任何地方的信息或者數據的交流，不只是打手機和上網，還包括空調、呼叫系統、交通、安全、醫療、藥品遞送、娛樂和農業等諸多還未使用5G技術的領域、將會以前所未有的方式應用5G技術。它將觸及我們生活的方方面面。」
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（電信公司Rivada Networks 董事長兼總裁）：「至關重要的是，5G的部署需要什麼樣的架構和技術。坦率地說，考慮到中國的問題，5G的架構是否會在中國開發並由中國公司交付，還是在世界其它地方由非中國公司交付。」
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（電信公司Rivada Networks 董事長兼總裁）：「地圖上用紅色表示的國家，我想有61個，代表已經簽約將使用中國設備，主要是華為設備來建構5G網絡的國家。粉色代表的是那些有意使用華為設備，而且已獲政府批準正處於測試階段的國家。這些是公開的信息。」
“ 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（電信公司Rivada Networks 董事長兼總裁）：「在英國，在某些歐洲地區，華為不僅在提供設備和融資上給予優惠，而且在基礎設施建設上也搞低價傾銷。比如在建設信號發射塔等項目上，我們有確鑿的證據表明，華為的報價比其它所有廠商都低至少40%。這說明中共政府補貼了其基建成本。因為英國建築承包商對華為、愛立信、和諾基亞都使用同等價格，所以華為得到了政府補貼。 中共政府這麼做的目地是有意要把愛立信，諾基亞，和三星擠出市場。這會迫使廠家為了降價，而降低網絡安全標準。它是為了牢牢控制這個基本安全領域、網絡領域，並進入那個網絡的關鍵部分。」
“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（電信公司Rivada Networks 董事長兼總裁）：「據我所知，美國安全機關最擔心中國（共）在5G領域取得領先。我就想了解他們擔心的具體是什麼。是擔心中共搶先建設5G網絡？是不是不搞5G網絡建設就會大大落後？這只是舉幾個例子。美國開發商一旦獲得頻率授權，就可以在國內建構初級5G網絡。這將提高網速到2G/秒，並縮短網絡延時，但這還不是真正意義上的5GB，對吧？他們眼下還沒有頻率資源來進行真正的升級，進一步發展到網速10-20 GB/秒，沒有延時的5G網絡，中國(共)、日本和韓國都有能力建構，一旦他們搶先進入5G時代，而美國還處在5G網絡初級階段的話，那麼我剛才講過的那些5G應用項目，比如互聯網規模的IT應用，垂直行業中的醫療和運輸業，以及相關的應用開發工作，都將移到建有5G網絡的國家。所以一些美國的優勢領域會面臨威脅。」
“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（電信公司Rivada Networks 董事長兼總裁）：「一般來說，你會向中國的5G提供商尋求幫助，因為他們得到了政府的補貼以及資金支持，因此他們的成本比其它任何公司都要低40%。因為他們得到了中國政府的補貼。那麼這些補貼的成本是多少呢？可能在全球範圍內有1000億至2000億美元，或多於此數。但要比製造航母戰鬥群的成本低。以這樣的成本就足以統治整個網絡領域。在網絡領域，但願不會發生大戰，如果發生戰爭，其前10分鐘將在網絡領域打響。網絡突襲就是未來的珍珠港事件。誰主導了5G世界，誰就會擁有巨大的戰略、安全優勢，坦率地說，還有經濟優勢。在21世紀的大環境中，中國發現了一個機會，北京發現了一個機會，即要在全球範圍內統治網絡領域，利用移動運營商作為他們的特洛伊木馬，為他們遊說，將他們的網絡架構嵌入市場，並利用補貼的優勢在全球部署5G網絡，這是一個絕妙的計劃，幾乎奏效了。」
“ 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（電信公司Rivada Networks 董事長兼總裁）：「如果你的船是別人給造的，那人家就知道哪兒有焊接，門的合頁在哪裏，結構上哪些地方薄弱，哪些地方堅固，哪些地方可以進水，哪些地方不能進水，機艙在哪裏，怎麼運作的，發動機最高可以達到多少溫度，什麼時候船體會開裂，哪些部位最容易出事。但如果船是你造的，船，還有船上的網路，甚至連船主都不知道的東西，你都知道。這倒不是因為船上的船員一直都是你的人，你沒有這個必要。但是如果你想接管這只船，你想用它達到你自己的什麼目的，如果你想毀掉它，你知道應該從哪裏下狠手。你也知道走哪條航路，等等。針對你剛才提的問題，我這麼解釋是有點簡單化了，但是，是有道理的。設備也好，軟體也罷，所有這些資訊運行的技術也罷，誰控制了供應、建造、維修，誰提供了設備，誰就知道它們的軟肋在哪裏，強在哪裏。無論何時何地，只要他們想破壞那些網路，就知道怎麼下手。」
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.”
蕭茗（Host/Simone Gao）:除了政府層面的安全問題外，對於華為5G網路的普通消費者來說，他們的隱私也會受到影響嗎？就這一問題，我採訪了《大紀元時報》資深調查記者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（《大紀元時報》資深調查記者）：「基本上來說，5G技術會讓中共或者說華為，通過華為獲得一個電磁頻譜，這個頻譜可以訪問或損害該領域內覆蓋的任何設備。我的意思是說，就像你家的Wi-Fi一樣。這個範圍內的任何設備都可以訪問Wi-Fi網路。我們關心的是，如果附近正好有政府機關或軍事單位，假設普通消費者家中使用的是5 G技術，或者說一個非常大的公司有一個很大的5 G網路使用同樣的技術，如果有人能訪問或破壞屬於另一個單位的網絡設備，這意味著什麼呢？這些都是下一代網路安全的問題，但是，卻是5G正在帶來的非常現實的問題。當然，這也是美國要禁止華為5G技術的原因。」
“ 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（電信公司Rivada Networks 董事長兼總裁）：「當然有影響。這迫使用戶們去審視華為的經營手法和策略，以及評估使用其產品可能帶來的風險。任何用戶都會去思考，能不能把國家基礎信息設施的建設，交給一個由集權的共產黨控制的，按共產黨組織的模式來運營的公司。其結論是顯而易見的。」
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.
蕭茗（Host/Simone Gao）:改變現狀不是一朝一夕的事。Ganley先生認為中國（共）公司的產品之所以能在海外有市場，是因為美國和其它西方國家的主要網絡公司，必須花大錢向其政府單獨購買運營頻率。然後向消費者按流量收費。與此同時，他們為了收回購買頻率的成本，到處尋找低價設備和低價承建商。中共正好鑽了這個空子。這些大的網絡公司於是成了中共政府的說客，幫助中國公司取得政策優惠。要改變這個局面，應該允許各網絡公司用統一價格向政府購買運營頻率。政府就可以得到穩定的收入。更重要的是，市場將決定數據流量的價格。這是一個長遠計劃。眼下的任務是如何阻止中共技術和設備，進入各國的5G網絡。這場戰鬥早就開始了，只是美國一直都沒有意識到。我是主持人蕭茗。請點贊我們的臉書網頁，並訂閱我們的YouTube頻道。《Zooming In with Simone Gao》。 感謝收看本期節目。我們下次再會。
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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