98.During the course of this inquiry, the issue of Chinese telecoms company Huawei’s potential involvement in the UK’s planned 5G infrastructure became a matter of high-profile public debate. The Chief of the Secret Intelligence Service, Alex Younger, said in public remarks in December 2018 that “We need to decide the extent to which we are going to be comfortable with Chinese ownership of these technologies and these platforms in an environment where some of our allies have taken quite a definite position”. The Defence Secretary later that month expressed his “very deep concerns” about Huawei’s involvement in the UK’s 5G upgrade. The UK’s allies in the five-eyes intelligence partnership have already been wrestling with this issue. In August 2018, amended criteria issued by the Australian government effectively banned Huawei and fellow Chinese company ZTE from providing 5G technology for Australia’s phone networks. New Zealand has blocked a proposal for its main mobile carrier, Spark, to buy Huawei 5G technology. The United States has banned Huawei and ZTE equipment from government networks, and banned government agencies from contracting with suppliers that use its equipment. In February 2019, US Secretary of State Mike Pompeo said the United States had for some months been “making sure … that countries understand the risks of putting this Huawei technology into their IT systems”, citing security and privacy risks. He said that “if a country adopts this [Huawei technology] and puts it in some of their critical information systems, we won’t be able to share information with them”.
99.Huawei has had involvement in the UK’s telecommunications infrastructure since the early 2000s, when BT awarded it a contract to supply some transmission equipment. In 2013 the Intelligence and Security Committee concluded that “the process for considering national security issues at that time was insufficiently robust”. Huawei’s current involvement in UK telecoms is moderated through the operation of the Huawei Cyber Security Evaluation Centre (HCSEC, also known as the “Cell”). HCSEC, based in Banbury, is a joint initiative between Huawei and the UK Government to provide insight into Huawei’s technology and activities, with the aim of providing assurances that the use of Huawei equipment and code does not pose security risks to the UK. An HCSEC Oversight Board, established in 2014 and chaired by the CEO of the UK’s National Cyber Security Centre (now a public-facing part of GCHQ), reports annually on HCSEC’s work. The Oversight Board’s 2018 report said that “shortcomings in Huawei’s engineering processes have exposed new risks in the UK telecommunication networks and long-term challenges in mitigation and management”. BT’s policy is not to use Huawei equipment in the core of its network architecture, which is what the company said led it to remove Huawei equipment from EE’s 3G and 4G networks after its acquisition in 2016, and which means Huawei “has not been included in vendor selection for [BT’s] 5G core”.
100.A principal concern about Huawei’s involvement in the UK’s future telecoms infrastructure arises from the possibility that the company might be directed by the Chinese state to facilitate espionage. China’s 2017 National Intelligence Law stipulates that “an organization or citizen shall support, assist in and cooperate in national intelligence work in accordance with the law and keep confidential the national intelligence work that it or he knows”. In January 2019, the Chair of the House of Commons Science and Technology Committee wrote to Huawei Technologies UK asking for a response to concerns raised about the company. In reply, Huawei executive Ryan Ding said that the Chinese Ministry of Foreign Affairs had clarified that “no Chinese law obliges any company to install backdoors”. Mr Ding stated that “the relevant provisions of China’s National Intelligence Law do not appear to have extraterritorial effect over Chinese companies’ overseas subsidiaries and employees, such as Huawei UK”. Mr Ding acknowledged the HCSEC Oversight Board’s finding of engineering shortcomings, but stated that “To date, HCSEC’s evaluations have not detected any malicious vulnerabilities or threats in our products or solutions.”
101.The UK’s current approach to Huawei’s involvement in telecoms infrastructure is based on risk management and mitigation. The NCSC’s Technical Director, Ian Levy, recently wrote that in its original decision to permit Huawei’s involvement but mitigate the risk, the Government “assumed in the decision process that the Chinese state … could compel anyone in China to do anything (which they’ve now codified in their National Intelligence Law) [and] would carry out cyber attacks against the UK at some point (which we’ve recently publicly confirmed)”. In a recent speech, NCSC Chief Executive Ciaran Martin noted that the Government has “strict controls for how Huawei is deployed. It is not in any sensitive networks–including those of the government.” The Government is currently conducting a review, led by the Department for Digital, Media, Culture and Sport, of the telecoms supply chain, which is expected to set out criteria for selecting providers for the UK’s 5G network. The Secretary of State for Digital, Culture, Media and Sport told the Chair of the Science and Technology Committee in March 2019 that the FCO is playing a “critical role” in the cross-Government review, noting that the “global nature of the [telecoms] market, and potential decisions of [UK] partners” reinforce the need for the review. The Secretary of State said the Government has “serious concerns surrounding the ability of both state and non-state actors to gain access to our telecoms critical national infrastructure”, and that as part of the review the Government is “closely examining Huawei’s role, and that of other vendors” in the 5G network. He also said that the Government will “take account of the approaches taken by our international partners”.
102.The considerable technical complexities of this topic fall outside the scope of the Committee’s current inquiry. However, we note some pieces of contextual information. First, the UK Government announced in December 2018 that a hacking group “acted on behalf of the Chinese Ministry of State Security to carry out a malicious cyber campaign targeting intellectual property and sensitive commercial data in Europe, Asia and the US”. The Government called this a “sustained cyber campaign focused on large-scale service providers”, and noted that the campaign showed “that elements of the Chinese government are not upholding the commitments China made directly to the UK in a 2015 bilateral agreement”. Secondly, a US grand jury indictment recently alleged that Huawei USA and Huawei China employees collaborated to steal information from T-Mobile relating to its proprietary phone-testing robot, and that, at the time that Huawei was assuring T-Mobile that its employees had acted independently and against Huawei’s own policies, Huawei China was launching a “formal policy instituting a bonus program to reward employees who stole confidential information from competitors”. This, according to the indictment, included an internal Huawei website for posting confidential information obtained from other companies, and a mailbox for encrypted email to receive especially sensitive information. Thirdly, we note that in explaining the rationale for Australia’s decision on its 5G supply chain, the head of the Australian signals directorate commented that “the distinction between core and edge collapses in 5G networks. That means that a potential threat anywhere in the network will be a threat to the whole network.”
103.This inquiry has not taken detailed evidence on Huawei’s involvement in the UK’s 5G network. However, we see considerable grounds for concern about Huawei’s involvement in the UK’s 5G infrastructure. Indeed, the very caution with which Huawei has been treated to date by the Government is evidence of this proposition. As concerns grow about the long-term strategic intentions of the Chinese state, so should the Government’s caution about the involvement of Chinese companies in any aspect of UK critical national infrastructure, including telecommunications. The debate over Huawei, which combines complex technological issues with sensitive geopolitical concerns, is a perfect example of the need for a clear national strategy towards China, and a strong FCO voice in interdepartmental debates about implementing that strategy.
104.In December 2018, Canadian authorities arrested Huawei Chief Financial Officer Meng Wanzhou; a Canadian government spokesman said that Ms Meng was sought for extradition by the United States. Shortly afterwards, Chinese authorities detained two Canadian citizens, including a former Canadian diplomat now working for the International Crisis Group. The Canadian Foreign Minister called their detention “arbitrary” and called for their immediate release”. The UK Foreign Secretary released a statement expressing the UK’s “confidence Canada is conducting a fair and transparent legal proceeding with respect to Ms. Meng Wanzhou”, and stating he was “deeply concerned by suggestions of a political motivation for the detention of two Canadian citizens by the Chinese government”. A large group of prominent scholars, former diplomats and others with interests in studying China signed an open letter requesting the two Canadians’ release, warning that their detention risked sending a message that research and outreach is “unwelcome and even risky in China”. Soon after Ms Meng’s arrest, US President Donald Trump said that he would consider intervening in the case if it made a trade deal with China more likely: “If I think it’s good for what will be certainly the largest trade deal ever made—which is a very important thing—what’s good for national security—I would certainly intervene if I thought it was necessary.” On 4 March, three days after Canada decided to proceed with an extradition hearing for Huawei executive Meng Wanzhou, state-run Chinese media reported that the two Canadians were being accused by the Chinese authorities of espionage.
105.The detention of two Canadian citizens in apparent retaliation for Canada’s arrest of Huawei Chief Financial Officer Meng Wanzhou is deeply concerning. Today, Canadian citizens are being detained. Tomorrow, it could be Britons. All countries which respect the rule of law should condemn cases such as these where it appears to have been flouted. In this regard, we deplore the remarks made by US President Donald Trump which gave the impression that the indictment of Meng Wanzhou was connected in political terms to the ongoing trade dispute between the United States and China.
106.The Foreign Secretary’s expression of concern regarding the detained Canadians is welcome, but this matter cannot be allowed to stand. The Government should continue to make clear to China, in public and in private, that the UK stands with Canada, and that the threat of such retaliation will not inhibit the rule of law in democratic countries—instead, it damages China’s public image in the world, and is only likely to discourage our citizens from travelling to China, doing business there, and learning about Chinese society.
107.During the course of our inquiry, we heard troubling allegations concerning Chinese interference in UK domestic affairs. This topic has become a matter of public debate for UK allies. After a series of media reports alleging political interference by China in Australia, and a classified investigation into the topic, the Australian Senate in June 2018 passed two bills introducing measures against interference, introducing new spying offences, and creating a register of individuals acting on behalf of foreign countries. In New Zealand, a prominent academic who has published research critical of the Chinese Communist Party has alleged that she has been the target of harassment, including break-ins at her home and office.
108.To date, there has not been a similarly prominent debate in the United Kingdom. However, witnesses to this inquiry indicated that there might be cause for concern about Chinese interference, and specifically in UK academia. Professor Eva Pils told us that there are “many examples of problems [of interference] in the field of academia”. She stated that “UK institutions with partners in China have come under pressure from the Chinese party state”, and noted concerns that in agreements between Confucius Institutes and their UK academic hosts “there may be clauses which dictate adherence to Chinese laws and regulations”. Professor Pils also said that, in her experience, “Chinese academics working in the social sciences and humanities visiting the UK today can come under pressure to accept censorship instructions or to self-censor in order to stay safe”.
109.Professor Steve Tsang said that he was aware of specific instances of Chinese interference:
In one Russell Group University a pro-vice chancellor was spoken to by someone in the Chinese embassy and as a result he stood a speaker who was already invited down… I am also aware of a vice-chancellor again under pressure from the Chinese embassy asking one of his senior academics not to make political comments on China at a specified period of time.
In a report for the Royal United Services Institute in February 2019, Charles Parton—Specialist Adviser to this Committee—presented evidence of attempted or actual Chinese interference across seven categories: academia and think tanks, the media and publishing, freedom of speech and rule of law, public policy and politics, espionage, critical national infrastructure, and technological threats.
110.We wrote to Professor Dame Janet Beer, President of Universities UK, and Professor Sir Anton Muscatelli, Chair of the Russell Group, about concerns regarding the potential for interference in the UK higher education sector by foreign countries. Dame Janet told us that Universities UK did not know “of any robust evidence of systematic attempts by a country to undermine academic freedom at UK universities”, but said that Universities UK is “aware of individual cases where attempts at foreign influence have been reported”. She said that Universities UK has been “involved in regular discussions” with Government departments including the FCO, and is currently undertaking “a programme of work in partnership with government” which includes examining the process of due diligence universities conduct when accepting money from overseas entities, and “analysing to a greater extent the specific risks and challenges in university interactions with certain countries to inform advice on academic collaboration with them.” The Russell Group told us it is “not aware of any significant or systematic attempts to influence university activity by foreign actors” in any of the ways outlined in our letter, and that the Russell Group has not held “any discussions with Ministers or officials about improper foreign influence”. In oral evidence, Lord Patten (who is Chancellor of the University of Oxford) told us that “it would be very helpful if there was more agreement within Government about what is acceptable, and if there were a point of contact in Government to which all universities can turn”.
111.We asked witnesses how they thought a line could be drawn between, on the one hand, the normal pursuit of influence or “soft power” abroad that many countries, including the UK, engage in, and, on the other hand, unacceptable interference in domestic affairs. Professor Tsang offered some distinctions:
Trying to plant and/or buy off elected representatives is off. That should not be tolerated. Employing people to break into the homes of academics who are critical of China is not acceptable. Using visas as a weapon to silence journalists’ or academics’ comments on any country should not be an acceptable practice. There is a list of the kind of activities that are fairly clearly not acceptable in terms of our basic values.
He said that other activities, such as the buying up of Chinese-language media for use as an extension of Party propaganda, were in a “grey area”. Kevin Rudd emphasised the importance of ensuring that protections against interference do not turn into what he called a “new McCarthyism”:
I am concerned about too broad a sweep and too wide an accusation being levelled at either people of Chinese ethnic origin or people who have normal commercial dealings with Chinese corporations, as if, by definition, they are all potential agents of the Chinese state. That is what worries me.
112.In the course of this inquiry, we have heard troubling allegations of attempted Chinese interference in the UK’s domestic affairs. This is a topic we will pursue in our new inquiry into autocracies and UK foreign policy. However, it is evident that the combination of a China characterised by strengthened Communist Party control and a desire to project its influence outwards, on the one hand, and ever-increasing economic, technological and social links between the UK and China, on the other, presents serious challenges for the UK. The openness of the UK’s political system and its society is a fundamental source of strength. However, in the face of an autocratic state seeking to increase its influence abroad, that openness can also be a source of vulnerability. The UK needs to decide how to draw the line between legitimate attempts to exercise influence, on the one hand, and illegitimate attempts at interference, on the other.
113.In its response to this report, the Government should tell us whether it believes that the Chinese government, or individuals or entities acting on behalf of the Chinese government, have improperly interfered, or attempted to interfere, in the UK’s political institutions and processes, the rule of law, UK media or UK academia. It should further set out what it is doing to counter such interference, or the prospect of it.
114.The Government should act on the proposal to nominate a single point of contact to provide advice to academic institutions on the political, diplomatic and legal implications of accepting funding and pursuing collaboration with institutions based in non-democratic states. The FCO network in China should also ensure that it is giving appropriate support to UK higher education institutions in China, including UK-Chinese joint ventures, to ensure that their campuses are not vulnerable to or provide leverage for interference.
194 , Financial Times, 3 December 2018
195 , The Times, 27 December 2018
196 , Australian Government media release, 23 August 2018
197 , Spark, 28 November 2018
198 , Section 889
199 , FOXBusiness, 21 February 2019
200 Intelligence and Security Committee, , June 2013, CM 8629, para 16
201 Huawei Cyber Security Evaluation Centre Oversight Board, , p 3
202 , BBC, 5 December 2018
203 Translation via , Ministry of Foreign Affairs of the People’s Republic of China
204 , 29 January 2019
205 , 29 January 2019
206 Ian Levy, , NCSC, 22 February 2019
207 , NCSC, 20 February 2018
208 , 6 March 2019
209 , FCO and NCSC, 20 December 2018
210 , 16 January 2019
211 , 29 October 2018
212 , Global Affairs Canada, 21 December 2018
213 , FCO, 21 December 2018
214 , 21 January 2019
215 , Reuters, 11 December 2018
216 , Global Times, 4 March 2019
217 , New York Times, 21 September 2018
218 Professor Eva Pils ()
219 , BBC News, 20 February 2019
220 Charles Parton, , RUSI, February 2019
221 , 6 March 2019
222 , 18 March 2019
Published: 4 April 2019