Inside the Feds’ Battle Against Huawei

On the morning of December 1, 2018, the vast central plaza in Mexico City was thronged by tens of thousands of people. Andrés Manuel López Obrador, a left-wing populist, had just been sworn in as Mexico’s 58th president. In his inaugural address, he thumbed his nose at decades of neoliberal rule and promised a sweeping political and economic transformation of Mexico.

The people converging on the Plaza del Zócalo from all over the country weren’t the only ones who sensed opportunity in the new administration. At that very moment, high over the Pacific Ocean, a Chinese executive named Meng Wanzhou was winging her way from Shenzhen to Mexico.

Meng is chief financial officer of Huawei, the world’s largest manufacturer of telecommunications equipment and second-­largest maker of smartphones. Though Huawei’s Android handsets are all but unknown in the United States, they are everywhere in Mexico, as they are in China, South Asia, and the Middle East. Even more ubiquitous in some 170 countries around the world are pieces of Huawei equipment that ordinary consumers rarely touch: arrays of radio antennas perched atop cell towers and electronic base stations that sit beneath them on the ground, converting between digital and radio signals. By some accounts, about 40 percent of the world’s population relies on Huawei equipment. But even with 191,000 employees and $108 billion in annual revenue, Huawei remained hungry for growth.

That desire, however, faced a formidable obstacle: the US government. For years, the US had pressured Mexico to block Huawei’s expansion within its borders. Washington argued that Huawei’s technology was an elaborate Trojan horse for Chinese government surveillance—that installing its networking equipment was akin to giving Beijing’s Ministry of State Security the ability to spy on Western computer and wireless networks.

López Obrador’s victory, however, suggested a new political moment and an opening for Huawei to strike. Meng was on her way to Mexico to secure a new beachhead for the next generation of wireless infrastructure, known as 5G. The transformation to a 5G network promised inconceivably fast wireless speeds but required a new and denser network of cellular base stations. And Huawei was the world leader in supplying precisely that equipment.

But before Meng could lay the groundwork in Mexico, she made a stop in Vancouver, Canada.

The 47-year-old executive—who also goes by the names Sabrina Meng or Kathy Meng—made her way through customs and immigration wearing a dark tracksuit. At some point, she must have realized that something was amiss. Perhaps it was when one of the two Canadian Border Services officers who questioned her stepped away to speak on his cell phone. Maybe it was when the officers began searching the two carts of luggage she’d brought along, or when two female officers came to escort her into a secure portion of the airport’s border facility.

The Royal Canadian Mounted Police finally told her she was under arrest. “Me?” she responded. “Why would I have an arrest warrant?” The officers said they were acting on US charges that she and her company had allegedly violated sanctions against Iran. “You’re saying because of my company, you’re arresting me?” she responded. Could she at least call her family?

The answer was firm: “You cannot.”

The officers placed each of her four devices—a Huawei phone, an iPhone, a rose gold iPad, and a pink MacBook—in a secure bag that would block any attempts to wipe them remotely.

Back in Shenzhen, the home of Huawei’s global headquarters, Joe Kelly was awakened by a phone call. A veteran of British telecommunications, Kelly heads the company’s international media affairs. On the other end of the line was a reporter: Sabrina has been arrested in Canada at the request of the US government. Do you have any response? Kelly sighed and offered the only comment he could muster: “I haven’t had my coffee yet.”

Kelly grasped immediately the enormity of what was happening. Meng isn’t just the CFO of Huawei; she is also the daughter of the company’s founder, 75-year-old billionaire Ren Zhengfei. The US had jabbed sharp elbows at Huawei before. But this was a dramatic escalation of hostilities.

Over the next several months, that escalation would continue. Huawei would find itself caught in a geopolitical vise as the United States seemed to project all of its technological anxiety about China and globalization onto a single company.

For the US, China represents both a critical trading partner and a leading foreign adversary. US companies see China as a market with a billion consumers and as home to the factories that make everything from Apple iPhones to children’s books. It’s also an authoritarian superpower that exerts an ambiguous level of control over its private sector. As tech firms like Huawei become ever more indispensable across the globe, American leaders have, not unreasonably, become possessed by the fear that Chinese technology will offer a ruthless Beijing many “backdoors” into Western affairs of state, security, and commerce. And in the past two years, the US has, at least in the case of Huawei, begun to toy with a policy of complete technological quarantine.

The stakes are enormous. Huawei itself is a huge player in the global telecommunications industry—so large that as Huawei goes, so goes the interconnected world. A full US ban on Huawei products could mark the beginning of the end of a one-world internet. It could calve the world into two separate tech ecosystems, one in North America and parts of Europe and the other across Asia and the Southern Hemisphere. The former would be dominated by Nokia, Amazon, Google, Facebook, Microsoft, and Apple, and the latter by Huawei, Alibaba, Tencent, and Baidu.

The Trump administration’s escalating fight has left US companies that supply Huawei reeling and left Huawei wondering if it can ever count on access to US supply chains again. About the only thing that is clear is that the Trump administration’s fight isn’t really about Huawei at all.

“There’s a big geopolitical battle going on,” one Huawei executive told me, “one that’s far above Huawei’s pay grade.”

II.

Ren Zhengfei grew up in Guizhou Province, one of China’s poorest regions, where his parents were middle school teachers. He was studying civil engineering in college when Mao Zedong’s Cultural Revolution came into force. Ren joined the People’s Liberation Army and became a member of the Chinese Communist Party in 1978. As he told reporters in 2013, it was a period when all “exceptional ­people” were expected to sign up with the party. “At that time my personal belief was to work hard, dedicate myself—or even sacrifice myself—for the benefit of ‘the people,’ ” he said. “Joining the Communist Party was in line with that aspiration.”

Ren left the military in the early 1980s. After a lackluster start in business, he founded Huawei with $5,600 in capital. He based the company in the southern city of Shenzhen, which at the time was a small coastal town that had just been designated a Special Economic Zone.

Ren hit on his first commercial success with small telephone exchange switches that connected calls inside hotels. From there, Huawei expanded into selling and manufacturing the guts of telephony. Most of its early customers were in rural China, in areas that were ill served by the giant European telecom companies just beginning to expand into the country.

In 1992, Ren led a delegation of company executives to the United States, where they visited Texas Instruments, IBM, and firms in Silicon Valley. “We recognized that our own methods of R&D are extremely backward,” Ren later wrote. “We simply have a long way to go to catch up.” Back home, he pushed his engineers to create the next generation of telephone switches. Telephones were then still a luxury in China, but as China’s middle class began to prosper, Huawei was well positioned to grow.

Eager to become a global player, Ren hired IBM to tutor the company on management and operations. Beginning in 1998, Huawei started pitching its switching technology overseas. Just as it had first cracked rural markets in China, it initially looked to underserved countries in Southeast Asia, Africa, and Latin America. “We had to spend a lot of time covering how to pronounce our name,” recalls David Wang, a longtime employee who now serves as the executive director of Huawei’s board. We’re not Hawaii, the telecom emissaries would explain. We’re Huawei. Like “how are we?” said fast.

Ren fostered a corporate culture of militaristic zeal. “The market has no time for tears,” he once told employees. “It respects only the brave. If Huawei intends to survive, it has to carve out a bloody path for itself.” Today, walls throughout Huawei’s buildings—and the cardboard sleeves on the campus’s Illy coffee cups—show a battered World War II fighter, its wings and fuselage shot to pieces, still flying triumphantly. As the poster says, “Heroes are forged, not born.”

Gradually, Huawei’s success in the developing world opened up doors in more advanced economies. Edward Zhou, who started as an engineer in 1996 and is now vice president of global public affairs, remembers sleeping in customers’ machine rooms to debug systems on the fly during the early days when Huawei still had a lot to prove. Back then, Huawei’s telephone technology was not equal to that of its Western peers, but it was much cheaper to operate. “Our customers didn’t trust the technology, but they trusted the people, because we worked very hard,” Zhou says. He later went to posts in Spain, Germany, and Japan.

In 2003, Huawei won a contract in Russia to build an optical-cable transmission project stretching across 1,800 kilometers in Siberia. The same year, it landed a contract to build a backbone transmission network for France. By 2005 more than half of the company’s revenue was coming from outside of China. Time named Ren to its 100 Most Influential People list. As the smartphone age arrived, Huawei began making not only hulking transmission equipment but also its own branded phones, some 600 million of which are now in circulation. Today, Huawei’s red logo and retail stores full of sleek furniture, pale wood, tablets, laptops, and smartphones seem to be as common on Chinese streets as Starbucks mermaids.

Even as Huawei has grown into a global player, its structure remained unusual among major Chinese companies. It is not publicly traded like Alibaba, Tencent, and Baidu. Unlike ZTE, the other major Chinese telecom manufacturer, it does not have the state as its biggest shareholder. Instead, the company is employee-owned, with Ren holding just over 1 percent of its ownership shares. Some 96,000 employees and retirees own the remainder of the company. To make matters more complicated, legally the employees’ shares are owned by a Chinese worker trade union, which is registered with the Shenzhen city government’s union.

Huawei’s financials are released every year and audited by the global accounting firm KPMG. This offers some insight into the company. But Huawei’s decisionmaking structure is shrouded in mystery. Huawei only began publicly naming its executives in 2011, and the company is run by a rotating set of chairs with Ren named founder, director, and CEO. This structural opacity has long concerned US officials; as one senior law enforcement official said to me, “It’s turtles all the way down.”

Ren’s relationship to China’s ruling Communist Party is similarly ambiguous. In 2018, China named Ren one of the country’s 100 “outstanding private entrepreneurs” who “firmly support the leadership of the Communist Party of China,” an honor bestowed as the country celebrated its 40th anniversary of economic reforms. (Huawei executives might also point out that many US executives have military ties—and that their service is heralded.)

In 2007 the US confronted Huawei directly about its loyalties. That year, during a trip through New York, Ren met with FBI agents who were concerned about the company’s business dealings in Iran. At the time, Ren maintained that Huawei abided by the international sanctions the US had levied against the Islamic Republic.

In the years that followed, the US government began to more publicly question Huawei’s role in the evolving tech landscape and moved to prevent it from becoming an integral part of the internet’s plumbing. In 2008 the US government blocked Huawei’s planned $2.2 billion deal with Bain Capital to buy the networking manufacturer 3Com, which made antihacking software for the US military. US officials feared that Huawei could subtly tweak the software to allow the Chinese military access to US computers. As one official told The New York Times at the time, a backdoor “is easier to hide than it is to find.” Then, in 2010, the US blocked the company’s efforts to acquire 3Leaf Systems, a server technology firm.

In 2012 the US House Intelligence Committee warned of Huawei’s growing ubiquity in telecom networks: “The investigation concludes that the risks associated with Huawei’s and ZTE’s provision of equipment to US critical infrastructure could undermine core US national-security interests.”

Just a few months later, Reuters published a story that heightened US suspicions of Huawei even further: Documents acquired by the news service appeared to show that a company called Skycom, which had supplied equipment to Iran’s main mobile phone operator, was actually a shadow operation run by Huawei—in apparent violation of US trade sanctions. As Reuters discovered, Skycom had a familiar name on its board: Meng Wanzhou, aka Sabrina Meng, Huawei’s CFO. At the time, the report seemed to come and go. But the Justice Department evidently took note. It started digging for a case against Huawei.

III.

No matter who won the 2016 presidential election, the US relationship with China was bound to be overhauled. For years, a bipartisan consensus had held that as China’s economy matured and became more integrated into the global system, the government would change its behavior. A stronger China, the theory went, would be a nicer China—one that acted more like a traditional Western democracy. But by the end of the Obama administration, that theory had been laid to waste. President Xi Jinping had consolidated power and become more baldly authoritarian at home. On the global stage, China had grown more assertive, not less. It had expanded its Belt and Road Initiative, intended to build big infrastructure projects around the world, and was projecting its military might in the South China Sea and parts of Africa.

In his final years in power, President Barack Obama had tried to rebalance the relationship between China and the US through the Trans-­Pacific Partnership trade agreement. The 12-country pact was meant to act as a counterweight to China’s rising economic and military power. At the same time, the US government began to loudly confront the rampant intellectual property theft that had accelerated China’s growth.

As Donald Trump arrived in the White House, the country’s national security agencies were already pivoting away from the global war on terror and toward a new era in which geopolitics was increasingly a contest between the US and two other superpowers, one fading and one rising. Russia, with its attack on the 2016 presidential election and its ongoing aggression in Ukraine, was certainly a handful, but it paled in comparison to the long-term threat posed by the rise of China, top officials believed. “Russia is a hurricane,” as Rob Joyce, the White House cybersecurity coordinator at the time, is fond of saying. “China is climate change.”

Trump inherited a foreign policy that was already mid-shift. But he quickly added to the air of indeterminacy with his signature mix of bluster, contradiction, and shoot-from-the-hip pronouncements—beginning with his immediate decision to back out of the TPP and its attempt to use a multi­lateral agreement to box in Chinese ambitions.

In early 2017, as the administration fumbled its way toward a China strategy, Brigadier General Rob Spalding joined the National Security Council as its senior director of strategic planning. A former B-2 stealth bomber pilot, Spalding’s whole career had been shaped by the study of China. As a junior officer on a prestigious Olmsted Fellowship, he had learned Chinese and attended Tongji University in Shanghai. Later, at the Pentagon, he had worked with the Chinese government to search for missing Korean War POWs. From 2014 to 2016, he headed the China division at the Joint Chiefs of Staff. When Trump was elected, Spalding had recently been named as the defense attaché at the US Embassy in Beijing. The National Security Council spot, though, was the job of a lifetime—the chance to help play a role in the advanced political art of grand strategy.

As with other China experts, Spalding’s wariness of Beijing had grown over time. He’d spent a year on a fellowship with the Council on Foreign Relations in New York, where he met with countless business leaders concerned about China’s intellectual property theft and economic espionage. He was also troubled by how entangled US military supply chains were with China. As retired Army brigadier general John Adams wrote in 2015, “Our almost complete dependence on China and other countries for telecommunications equipment presents potentially catastrophic battlefield vulnerabilities.”

Trump’s foreign policy ranks were in turmoil from the get-go—the first national security adviser, Michael Flynn, lasted barely three weeks. Spalding seemed a steadying presence. Before Spalding left his post in Beijing, he had outlined a seven-­page draft strategy to counter China’s rise. In Washington he hosted regular forums for White House staff, inviting outside speakers to discuss China’s approach to nontraditional warfare. “The Chinese Communist Party is not this benign organization,” Spalding told me. “It’s much more insidious.”

Spalding was particularly worried about 5G, the backbone upon which the next generation of the digital economy will be built. Each advance in cell phone technology has brought a change in user habits. The second generation of cellular networks delivered texting; the third generation boosted speeds to a few megabits per second, allowing for the first smartphones. More recently, 4G networks have delivered streaming video to people waiting in line at the DMV. The promise of a 5G network seems almost mythic in comparison—a leap of perhaps a hundredfold over 4G speeds, with virtually no latency and the ability to connect an astonishing number of devices and sensors to the network. Evangelists today proclaim that 5G will usher in the true internet of things.

But the 5G network can’t piggyback on the existing 4G infrastructure. The technology operates on millimeter-wave frequencies that drop off quickly with distance, thus requiring oodles of small, low-power wireless base stations that connect to the internet. At Huawei, Ren had possessed the foresight to start developing the fundamental technology early, and by 2017 it appeared his bet was paying off. As countries began making long-term decisions about which manufacturers would build and install thousands of base stations, Huawei was at the top of the heap. The US, with no companies able to manufacture base stations, wasn’t in the heap at all. Moreover, analysts estimated that Huawei was 18 months ahead of Western competitors like Ericsson and Nokia.

Huawei’s lead in 5G infrastructure was especially vexing because China had recently enacted something called the National Intelligence Law. “All organizations and citizens,” the law states, “shall support, cooperate with, and collaborate in national intelligence work.” It seemed to require that companies like Huawei open their networks to Chinese intelligence.

Spalding began convening meetings at the National Security Council with engineers from manufacturers like Samsung, Nokia, and Ericsson to talk about what the US should do to counter Huawei. “It wasn’t about 5G per se,” Spalding says. “It was about data. It’s about how we create the most secure internet for the American people.”

Spalding came to the conclusion that the only way to ensure an uncompromised 5G system would be for the US to have a single, large network. He cooked up a PowerPoint presentation that called for an “Eisenhower National Highway System for the Information Age.” The goal: to establish a “network that reflects our principles,” from the rule of law to freedom of speech and religion, and to build it fast. “China has achieved a dominant position in the manufacture and operation of network infrastructure,” the presentation read. “We are losing.”

Spalding didn’t get far. When word of his idea leaked to the news website Axios, US telecom carriers complained vociferously. While they didn’t have the ability to build base stations themselves, they were building networks on top of those made by Nokia and other providers, and they didn’t want a “nationalized” entity competing in their industry. The Trump administration promptly distanced itself from the idea. Spalding’s time at the NSC was over.

Huawei executives had heard Donald Trump’s anti-China rhetoric on the campaign trail. And, as at many companies, they contemplated what would happen if President Trump were to lash out at them in a tweet. “I think it’d be great,” one executive said at a meeting in 2017. “No one knows our name right now.”

The levity didn’t last long. As it turned out, Spalding was hardly the only one inside the US government concerned about Huawei and Chinese telecom companies. The Justice Department and intelligence agencies were also homing in on the Chinese giant.

IV.

Huawei’s anni horribiles began in early January of 2018. Word leaked that AT&T was going to announce at that year’s Consumer Electronics Show that it would start selling Huawei phones in the United States. US officials argued that AT&T shouldn’t field the phones in the US; the deal was quashed.

That same month, President Trump, who had been steadily ratcheting up pressure on China to make a new trade deal with the US, announced tariffs against Chinese solar cells and washing machines. These were the first in a series of escalating tariffs that kept stock markets off kilter for months. “Trade wars are good, and easy to win,” Trump tweeted.

A series of crackdowns on Huawei followed. In February top US intelligence officials testified in the Senate that Huawei’s phones posed a security threat. In May the Pentagon banned the sale of Huawei and ZTE smartphones on US military bases. In July the intelligence chiefs of the “Five Eyes”—the Western intelligence alliance of the US, UK, Canada, Australia, and New Zealand—gathered in Nova Scotia for a semiregular private confab. Over a lobster dinner, the heads of agencies like MI6 and the CIA discussed how to box in China’s telecom ambitions.

Just weeks after that dinner, President Trump signed the annual National Defense Authorization Act, which included a provision barring the US government from using certain products from Huawei, ZTE, and a handful of smaller Chinese firms as a “substantial or essential component of any system.”

Australia followed shortly thereafter with a similar prohibition. Then New Zealand intervened to prevent a domestic company from using Huawei’s equipment to build a 5G network. Most significantly for Huawei, one of its most prestigious customers, the British telecom BT, said that it would decommission part of the Huawei 4G network and that Huawei’s equipment would not be part of its 5G rollout.

Days after the New Zealand announcement, Ren’s daughter boarded the plane for Canada.

Meng Wanzhou is one of two children from Ren’s first marriage. She attended college in China and joined her father’s startup in the mid 1990s, after a year working for the China Construction Bank. She’d risen through the finance side of Huawei to become its CFO and one of four deputy chairs. By the age of 46, she had assumed the role of Huawei’s public ambassador. A tutor helped perfect her English grammar and pronunciation, and she traveled the world wooing banks and clients. The trip to Mexico was to be a routine journey for a polished global executive.

Meng may have suspected that she’d become the target of US prosecutors. In April 2017 the US Attorney’s office made public that it was investigating Huawei’s involvement with SkyCom and Iran and served Huawei with a grand jury subpoena. Meng, who had visited the US in 2014, 2015, and 2016, made no more trips to the country after that subpoena, according to the Justice Department.

Following her arrest in Vancouver, the US alleged in 2019 that Meng and Huawei had tried to circumvent sanctions against Iran. Huawei has long maintained that SkyCom was a completely independent company and, according to the indictment, Meng, a SkyCom director, had personally assured US banks that it complied with US sanctions. But the US said otherwise. The documents obtained by Reuters suggested that SkyCom’s leadership was made up of Huawei executives, its shares were controlled by Huawei’s own holding company, and the signatories on its bank accounts were Huawei employees. Reuters also reported that SkyCom employees seemed even to have Huawei email addresses and badges. According to US prosecutors, Huawei had used SkyCom for business that would otherwise have been prohibited under the US sanctions, citing more than $100 million in SkyCom transactions that flowed through US banks.

The Justice Department wasn’t done. It also brought criminal charges against Huawei related to a civil case in which T-Mobile claimed that Huawei had stolen technology for “Tappy,” its phone testing robot. Though T-Mobile won $4.8 million in damages in the civil case, Huawei pleaded not guilty to the criminal charges.

V.

Meng’s arrest struck like a thunderclap. But at least at first, it seemed as if it might fit into a context of relatively cool-headed, established US strategy. Since the later years of the Obama administration, the Justice Department had been prosecuting alleged Chinese lawbreaking aggressively while the rest of the US government carried on with cordial diplomatic and trade relations with Beijing.

In 2014, in a first-of-its-kind case, the Justice Department indicted five Chinese hackers on charges of stealing intellectual property from US companies. The hackers were also members of the People’s Liberation Army, but their employer was immaterial; theft was theft. The rule of law, the Obama administration argued at the time, was nonnegotiable. In the years since, economic espionage charges against Chinese companies and hackers became all but routine.

President Trump, however, almost immediately appeared to indicate that Meng’s case might be handled differently, and that the independence of the judicial process was up for negotiation. Just days after her arrest, Trump suggested to Reuters in an Oval Office interview that he might be willing to intercede on Meng’s behalf in exchange for better trade terms. “Whatever is good for this country, I will do—if I think it’s good for what will be certainly the largest trade deal ever made,” he said, “I  would certainly intervene.”

Trump’s comments left both Justice officials and Huawei executives fuming. Huawei leaders, who told me that they’d long respected the sacred place of the rule of law in the US system and wanted China to model it, now wondered how sacred it really was.

China’s retaliation for Meng’s arrest, meanwhile, was swift and pointed: Two Canadians in China were taken into custody, and one, already in custody, was given a one-day retrial at which his previous prison sentence was hardened to the death penalty. (The Chinese government denies that these events were related to Meng’s arrest.) US companies reconsidered sending their employees on trips to China. One executive from Koch Industries faced multiple days of interrogation, until the US State Department secured his departure.

The Trump administration pressed a broader case against Huawei outside the courtroom. From corporate boardrooms to foreign capitals, it argued that 5G was too important to cede to a foreign adversary, and despite its protestations of respectability, Huawei had a troubled history of skirting US law and helping some of the world’s worst regimes.

These attacks left Huawei scrambling. It rushed to hire public relations talent—reporters approached by the company to join its PR shop said the company dangled salaries upward of $200,000—and it retained the law firms Jones Day and Squire Patton Boggs. The company took out paid advertorials in The New York Times and other publications.

Privately and publicly, its executives complained that they were being held to a double standard. They pointed out that US telecom companies had cooperated with US intelligence agencies. US agencies had even pressured tech companies to weaken key technological standards, like encryption, for their own espionage purposes. “PRISM, PRISM, on the wall, who is the most trustworthy of them all?” Huawei’s rotating chair, Guo Ping, asked the Mobile World Congress in February, referring to the codename of one of the National Security Agency’s large-scale surveillance programs. “If you don’t understand that question, you can go ask Edward Snowden.”

Secretary of State Mike Pompeo spent much of the winter and spring warning Western allies to avoid Huawei’s products. He told Germany that if it allowed Huawei to supply its 5G network, the US would consider curtailing its long-standing intelligence-­sharing agreement with the key European ally. Similar warnings went out to Poland.

Then, in May, the US dropped an anvil on Huawei. US firms would be barred from doing business with the Chinese telecom altogether; its name had been added to what’s known as the “entity list,” a roster of international personae non gratae compiled by the Commerce Department. Usually the list is reserved for criminals, shady holding companies, and suspicious banks that fund things like terrorism or drug trafficking. No company as prominent as Huawei had ever landed there.

In a matter of hours, Huawei’s very existence seemed uncertain. The company had stockpiled key components, some lasting three months, others maybe 12. But then what?

The ban, if implemented, would have crippling effects beyond Huawei. Of the Chinese company’s $70 billion procurement budget, $11 billion is spent on parts made by some three dozen US companies, from cables and connectors purchased from Connecticut’s Amphenol to memory chips from Idaho’s Micron Technology. Huawei’s smartphones and telecom equipment run on parts and chips made by Qualcomm, Intel, and Broadcom. Industry analysts projected the Huawei ban could cost NeoPhotonics, a California manufacturer of optical devices, nearly half its business.

US companies rushed to implement worst-case scenarios: Google and ARM, a primary chip manufacturer, both announced they’d halt contracts with Huawei. Crisis meetings were convened both inside the suppliers and at trade groups like the Semiconductor Industry Association.

One executive for a US supplier said how surprised he and colleagues had been by the administration’s seemingly ill-­considered attack on Huawei and the shock waves it created. “If you’re trying to wipe out China’s leadership by using a bomb,” the executive cautioned, “you’re not looking at the collateral damage.” (No US supplier contacted by wired would speak for the record, at “the risk of pissing off one side or the other,” as one told me.)

Understanding now the gravity of the fight it faced, Huawei enlisted Michael Esposito, a Trump fundraiser and lobbyist, and paid him more than $500,000 a month to lobby the White House and the Commerce Department.

In the following weeks, as suppliers raised their voices behind the scenes, the Commerce Department eased up. Huawei would remain on the entity list, but US companies could seek exemptions. Many have been able to keep selling parts to Huawei, but they’re proceeding cautiously, unsure if those exceptions might be yanked in the future.

China, meanwhile, announced plans for its own “unreliable entities list.” As the supplier executive told me, “We’re stuck between two governments.”

VI.

Last spring, as Meng settled into the 8,170-square-foot Vancouver mansion where she would serve house arrest during the long US extradition process, Huawei took out pleading full-page ads in American papers. One, which ran in The Wall Street Journal, invited the US media to visit the company. “Don’t believe everything you hear,” the ad’s headline explained. “Come and see us.”

I emailed the address included in the ad, which was how in June—just days after Huawei was hit with the entity list sanction—I found myself in Dongguan, an hour outside Shenzhen, with three other US journalists, in what is surely one of the most surreal landscapes globalization has produced. (Although Huawei had offered to pay the way for journalists, wired paid for my trip.) We were traveling aboard an imported Swiss train through a 3.5-square-mile, $1.5 billion R&D campus. Opened last year, the campus was conceived by a Japanese architecture firm that re-created 12 European cities, each with distinctive and unmistakable architecture. We went from Paris to Heidelberg to Bologna in a matter of minutes. (“I’ve been to that church in Germany before,” I said to Huawei’s US spokes­person at one point, pointing to one of the buildings that looked identical to one in Bavaria.)

A model of Hungary’s Liberty Bridge rose in the background, and beyond it, high-rise towers that will one day house some of Huawei’s 25,000 workers. As lunch approached, the company’s largely young workforce flooded the streets, alleys, and paths as they headed to dining options that included Chinese food cafeterias, French cafés, and a KFC. The Dongguan campus is meant to inspire its workers to think creatively, but it’s also sending another message: Huawei is a global company.

The day after exploring the surreal European mashup village, we visited the company’s main headquarters in Shenzhen. At the gates to the Shenzhen campus, guards in Huawei uniforms with blue berets and white gloves snapped sharp salutes as vehicles entered. Inside, attendants in burnt umber flight-attendant-style uniforms escorted visitors through low-slung modern buildings.

Mr. Ren, as he is called, passed us in the lobby, his presence with a single aide causing barely a ripple among the employees. But our itinerary did not include a meeting with the founder. Instead, in an ornate meeting room, we sat with David Wang, the executive director of the board. Over two hours and three cups of coffee delivered discreetly by a steward, Wang spoke passionately about Huawei’s troubles with the US government. “We’ve seen a lot of inconsistency in the US position,” Wang said, through an interpreter. “We’ve seen allegations not based on logic or facts—or based in the rule of law.”

Wang has worked at Huawei for 22 years. He said he had read hundreds of books on US history, business leadership, and politics, and he was clearly disillusioned by the new combative stance of the US government and the whiplash induced by Trump’s various edicts. He argued that if the US had legitimate security concerns, it should name them. The health and security of the internet should be important to everyone and ought to be discussed apart from the superpower machinations of the US and China. If there were ways for Huawei to make the internet safer, it would do so. “Politics should be separated from cybersecurity,” Wang said. “Let cybersecurity be cybersecurity and politics be politics.”

I asked Huawei employees about the national security criticism—posed by Pompeo and others—that its 5G systems might be used to siphon off data and share it with the Chinese government. They said they didn’t know what he was talking about. “The US hasn’t shown any vulnerability to us about Huawei products,” said Jeff Nan, a lead engineer in Huawei’s cybersecurity lab. “They haven’t given any evidence on our products. The US hasn’t given us a chance.”

In protesting the allegations against his company, Ren himself said in January 2019 that he would close the company rather than comply with an order from the Chinese government to compromise customer data or privacy. Privately, US officials concede there’s no evidence Huawei’s products have ever been compromised by Chinese intelligence; there’s no smoking gun that they will even wink or nod at.

In one way, at least, Huawei’s technology is among the most scrutinized in the world. In 2010, in partnership with UK intelligence, the company established the Huawei Cyber Security Evaluation Centre, where its software and hardware are continuously evaluated by engineers from British intelligence. A 2019 report from that organization argued that Huawei did continue to pose a “serious” security risk—not because it was sharing data but because its code is so buggy. “We know we’ve found issues. That’s the point of testing,” Joe Kelly, the Huawei spokesperson, says, adding that it’s not clear any other telecommunications company would fare better. “Who knows? We’re the only vendor that’s given over our source code.”

Buggy software certainly leaves critical systems vulnerable to exploitation. The concern voiced by US officials in private conversation is, as they put it, “not backdoors but bug doors.” China would never be dumb enough to force Huawei or other tech companies to insert something that was as easily identifiable as a backdoor. Instead, buggy software offers a low-profile, more pernicious opportunity for spying. The UK intelligence community also has raised repeated concerns about the fact that the Huawei code it tests in the cybersecurity lab is often later modified, tweaked, or customized for use by specific customers out in the field well after the gauntlet of intelligence analysts and engineers in the lab.

Nor does the fact that Huawei hasn’t been compromised to date mean it couldn’t be compromised in the future, US officials say. Spalding’s concern stands: 5G is a foundational technology, and the temptation to use it for nefarious purposes is simply too high. Some officials, in an almost Kafka­esque twist of logic, point to the fact that Huawei hasn’t been compromised as evidence of China’s ulterior motives: You wouldn’t expect China to lean on Huawei until Huawei is positioned inside 5G networks in the US. After all, the Greeks didn’t leap out of the horse in Troy until it was inside the city gates. As one US official told me, “This is how China dominates. You move silently and quietly until you dominate—then you can launch an attack.”

Christopher Krebs, the Trump administration’s top cyber official at the Department of Homeland Security, says the US government is particularly concerned about not just the operations of the technology but who ultimately can exert control over a network. In the US government’s view, Huawei and the Chinese government are inseparable because of China’s 2017 national security law.

During my visit to Shenzhen, I asked Wang about the company’s relationship to the Communist Party. “I think this is an interesting topic, because Huawei has always been a wholly employee-­owned, private company,” he said. “Throughout most of our history, there have been suspicions about our identity.” He continued: “Due to the US campaign against Huawei, we have finally figured out our identity: We are a global company based in China.” Is he a member of the Communist Party, I asked? No, he replied, but his wife is.

Communist Party connected or not, Huawei seems to have skirted US laws to do business with Western adversaries. Besides the allegations about evading Iran sanctions, Huawei has also been reported to have helped North Korea build out its cellular network and has been warmly embraced in places like Russia and Venezuela. Documents obtained by The Wall Street Journal appear to show that Huawei employees helped governments in Uganda and Zambia spy on political dissidents. Similar allegations have arisen that Huawei employees helped the Algerian government eavesdrop on its political opponents. (Huawei denies the African allegations and says that it does not do business in North Korea.)

Impossible to dodge, though, have been the allegations that, in its home country, Huawei is helping the Chinese government suppress its Uighur population. The Muslim minority are being surveilled, and many are held in concentration camps. John Suffolk, who is Huawei’s top security official and a former chief information officer for the UK government, was chastised at a British parliamentary hearing last year for selling equipment to monitor Uighurs in China’s northwest region. “It’s the government’s job to set the law, whether in the East or West,” Suffolk said. “It is our job as a supplier to work within that law.”
“You’re a moral vacuum,” a member of Parliament spat back.

Huawei’s executives—including its top American security official, Andy Purdy, who was formerly with the Department of Homeland Security—say they are committed to demonstrating that Huawei is worthy of trust. Huawei says it would happily construct a joint testing lab in the US, akin to the one in the UK, but US officials have never responded to offers. US officials, for their part, ask why NSA engineers should tear apart Huawei’s code and suggest to a Chinese company how to build more secure systems that would meet the standards of the US market. That would only improve China’s ability to field technology to compete against Western companies.

That stumbling block lays bare the real struggle. The fight with Huawei is less about bugs or backdoors than the three technologies that will drive the future of innovation: 5G, advanced computer chips, and artificial intelligence. And, most important, which country will dominate in those technologies.

“The security issue is normally technical, but currently they are using security as an excuse to try to block us,” says Zhou, the longtime Huawei employee. “It’s a pure political excuse now.”

VII.

US officials have watched warily as China has exercised its influence on the world stage, in ways big and small. In a private conversation this summer, a senior US national security leader asked me if I’d noticed anything in the latest trailer for the new Top Gun sequel, backed by China’s Tencent. He had: The trailer shows Tom Cruise’s character wearing a leather bomber jacket that had apparently undergone a few alterations since the original film. Gone were the patches of the Taiwanese and Japanese flags. More recently, National Basketball Association executives gave groveling, abject apologies after the general manager of the Houston Rockets tweeted support for pro-democracy protesters in Hong Kong. It was a sign of the league’s fear of angering a fast-­growing fan base—and business opportunity—in mainland China.

Meanwhile, as one US supplier told me, “We’ve heard from members of the White House, ‘You shouldn’t do business with China.’ There’s no reason for one company versus another—it’s just ‘You shouldn’t be in business with China.’”

China and the US are forcing consumers, companies, and whole countries to decide how they see the world. Will it be the Chinese way or the Western way?

Over the past year, Trump officials have been concerned to discover that not all traditional allies will automatically side with the US. Despite bombast and threats, Mike Pompeo’s lobbying efforts in Europe against Huawei met with only mixed success. Germany forged ahead with incorporating Huawei into its 5G system. “Our allies aren’t standing with us in the way that we thought,” one senior Trump administration official says.

In some ways, the companies that face such questions say it’s precisely because of the Trump administration’s hard-hitting strategy that its appeals are falling on deaf ears. As the supplier executive told me, “Huawei has become a scapegoat for our broader issues. Is it any wonder some of our allies aren’t going along with our bazooka strategy?”

Standing alongside hard-hat-wearing telecom workers in the White House last spring, President Trump trumpeted his commitment to “winning” the 5G race. As he said, “We cannot allow any other country to outcompete the United States in this powerful industry of the future. We are leading by so much in so many different industries of that type, and we just can’t let that happen. The race to 5G is a race America must win, and it’s a race, frankly, that our great companies are now involved in.”

Yet by almost any measure, the US seems set for defeat. South Korea deployed a 5G network last year, claiming to have signed up more than a million customers in just 10 weeks. (According to South Korea’s government, Huawei’s hardware represents about 10 percent of the network, with the remainder from Samsung and other firms.) China surely will end up with more 5G users than any other country.

In recent months, the administration has begun to tap special government programs to encourage further 5G growth and innovation, but such efforts appear to be both late and underwhelming. Elsa Kania, a senior fellow at the Center for a New American Security and an astute observer of China’s military technology, concluded in a report this fall that “the US government has yet to commit to any funding or national initiatives in 5G that are close to comparable in scope and scale to those of China, which is dedicating hundreds of billions to 5G development and deployment.”

This shortfall has sparked broader concerns about future US technological development. Verizon is leading the push to set up 5G networks, with pilot projects in several cities using Ericsson-made base stations. But the US is a very, very long way from ubiquitous 5G. “This is the first example of what’s going to happen again and again,” Senator Mitt Romney said in an October hearing on 5G and supply chain security, warning that the US is now ill-equipped to face China as a technological rival. “We as a nation don’t have a strategy. We respond on an ad hoc basis.”

That lack of a larger, coordinated strategy has frustrated US tech companies too. “We’re not increasing our own competitiveness,” one senior tech executive told me. “We have a national AI strategy that hasn’t been funded. We’re horrible at allowing very smart people to come here and stay here. We have a shortage of STEM talent. Those things really need attention.”

On the other side of the Pacific, meanwhile, the irony is that the Trump administration’s crusade against Huawei might actually accelerate the Chinese tech dominance it professes to want to thwart. In August, Ren announced a plan to develop an “invincible iron army” of friendly suppliers over the next three to five years—a plan B if the company permanently loses its US partners. It’s also taken the first steps toward developing its own operating system, which would allow Huawei to break from Google’s Android platform and compete with Apple’s iOS. It will be a “painful long march,” Ren wrote in an internal email, a possible nod to the Communist Party’s road to victory.

“They have awoken a dragon. This is a big-boy game,” one Huawei executive told me over drinks in Shenzhen. “We will develop chip sets that we had no intention of building. China will develop a chip industry faster than anyone thinks it can.”

US suppliers say they’re deeply nervous watching Huawei’s moves and angry about how counterproductive the Trump administration’s push is turning out to be. One supplier pointed out that Huawei’s investment in chip development could put US jobs at risk. Indeed, it’s not hard to imagine a world where the current US strategy to isolate Huawei succeeds. It would be shut out of the US, Canada, and much of western Europe, but it could also sweep across the Southern Hemisphere and Asia, linking up billions of users in developing countries and splitting the world into two internets. That’s not necessarily the future Huawei wants, but it may be the future it’s forced into.

Huawei executives say they don’t want the geopolitical standoff to last forever, and they’re hopeful that the internet will remain a united, global enterprise. “The world will return to its normal order,” Wang told me confidently in Shenzhen. “The management of Huawei still believes that globalization is the trend of the times.”

To that end, President Trump’s larger trade war with China may be easing. In late December, he announced a tentative deal on tariffs. But no one knows when the next tweet may drop.

Sabrina Meng, meanwhile, is settling into what could be a long-term detention in Canada. She paid a C$10 million bail and obeys a curfew. At a September court appearance, while earpiece-wearing guards cleared her path, Meng followed behind, her Jimmy Choo stilettos tapping along the courthouse hallways, legs bare except for a black ankle monitor. On December 1, she released a letter online for her supporters, thanking them for their unending cheer. “Time seems to pass slowly,” she wrote. “It is so slow that I have enough time to read a book from cover to cover. I can take the time to discuss minutiae with my colleagues or to carefully complete an oil painting.”

In a sign of just how long the fight could last, Huawei told me that Meng plans to pursue a PhD while she’s under house arrest. During a recent interview with CNN, Ren suggested he’s patient. “The experience of hardship and suffering is good for Meng and her growth,” he said, and described how he sends her funny stories he finds online. Whenever Meng steps outside her house, there are paparazzi. She is no longer a nearly anonymous businesswoman. Nor, for that matter, is her employer. No one needs to explain how to pronounce its name. As Zhou says, “It’s very different now. We’re very famous now, thanks to Mr. Trump.”

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Garrett M. Graff (@vermontgmg) is a contributing editor for WIRED and author of The Only Plane in the Sky: An Oral History of 9/11. He wrote about Chinese trade-secret theft in issue 26.11. He can be reached at [garrett.graff@gmail.com](mailto:garrett.graff@gmail.com.

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