Bottom line: A new PR campaign by Huawei and Microsoft to ease Washington and Beijing cybersecurity concerns that are hurting their cross-border business will have limited impact, and what’s really needed is better technology to prevent against hacking.
The growing paranoia in Beijing and Washington over cybersecurity threats is creating odd bedfellows of two of the world’s leading tech companies on opposite sides of the Great Firewall of China. That pairing is bringing together software giant Microsoft (Nasdaq: MSFT), one of the biggest China boosters among US tech firms, with Huawei, a globally ambitious Chinese company that would desperately like to enter the lucrative US market for telecoms networking equipment.
This particular alliance looks relatively superficial in substance, even though it’s highly symbolic in form. Under their tie-up, the pair have jointly created a “buyers guide” that discusses security issues involving the manufacture and installation of high tech networking systems. The guide was actually published by the nonprofit EastWest Institute, which is based in New York and worked closely with the 2 firms on the project.
First we’ll discuss the background that led to the creation of this particular “how to” manual, before moving to a broader discussion of whether it will have any meaningful impact on the cybersecurity debate.
For Huawei, the big issue has been a Washington ban on import of its core networking equipment to the US dating back to 2012, after a government report said such equipment posed a national security risk due to potential for cyberspying by Beijing. No evidence of such spying was ever revealed, though the bigger fear was potential for such spying due to the traditionally close relationship between Beijing and many Chinese companies.
Microsoft faces similar challenges in China, which last year rolled out a tough new cybersecurity law that forced most big western tech firms to form joint ventures to continue selling to Chinese government entities and big state-run companies. Foreign companies complain that the new law is overly intrusive, and forces them to disclose sensitive material like source codes in a country famous for intellectual property theft.
Complicating the matter was the Edward Snowden scandal of 2013, which showed that Washington really was engaging in a widespread campaign of cyberspying on both its rivals and allies. Somewhat embarrassingly, that scandal also revealed that the US had spied directly on Huawei itself by intercepting information over the company’s internal telecoms networks.
Independent from Beijing
Huawei has repeatedly said that it is independent from Beijing, which is probably true in my view. Microsoft and other big western names have been less vocal in their opposition to Beijing’s tough cybersecurity law, probably for fear of retribution if they complain too loudly. But most foreign tech giants have made their views heard through organizations like national chambers of commerce and their home governments.
With all that background in mind, this latest “buyers guide” from Microsoft and Huawei looks quite symbolic, even if it’s unlikely to actually provide any real benefits for readers. The guide offers 5 principles, not surprisingly led by a guiding rule that says an open market is in everyone’s best interest for maintaining innovation. Such a rule seems more intended for government readers than other companies, though I would also agree with such a general principle.
Probably more significant than the guide itself is the way the 2 sides have come together for the project, using the high-profile Wall Street Journal to promote their effort. In another interesting detail, Huawei openly discussed the new guide through an interview with its US chief security officer Andy Purdy, who is obviously not Chinese. Microsoft declined to comment on the matter, which again probably reflects the low profile that most western companies are taking on the matter over fears of retribution by Beijing.
At the end of the day, the cybersecurity issue is as much about trust and technology as anything else. There’s a very low level of trust right now between Washington and Beijing, largely due to revelations from the Snowden scandal and recurring protests from the US that big hacks on western computer systems are originating in China.
This kind of effort by Huawei and Microsoft looks like part of an ongoing PR campaign begun by Huawei, aimed at trying to calm government leaders on both sides of the Great Firewall. The campaign may have some effect, but words can only have limited impact when actual incidents repeatedly occur to show that cybersyping is a real threat. Instead, what’s really needed is the development of new systems and technologies that greatly reduce or eliminate the cybersecurity threat, and that will only happen with time and a clear drop-off in the level of damaging system breaches.
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