The British government’s decision to launch a review of Huawei’s activity in the UK is an indication that the US campaign to pressure its allies to shun China’s biggest telecoms company is bearing fruit. Moreover, Downing Street is planning to forge an alliance of democracies with the mission of providing developing countries with alternatives to Huawei’s market-leading 5G capability.
Rather oddly, though, this western effort overlooks a key telecoms battleground: Russia. If Huawei succeeds in establishing control over Russia’s 5G buildout, that will strengthen the Chinese company’s position in the battle for other emerging markets. There are four factors playing into Huawei’s hands in Russia. The first is money. Russian mobile operators have long been attracted by Huawei’s technology, which is on a par with European vendors but offered at lower cost, thanks to Beijing’s financial support.
However, Huawei’s attraction to Russia is not just about economics; it is also about national security. The Kremlin acknowledges that Russia is unable to produce quality 5G hardware on its own, and therefore needs to buy it from either Huawei or the west. So the Kremlin’s rationale for selecting Huawei is straightforward: “We’re either going to be bugged by the US or by China, so we need to choose the lesser evil,” as one government insider said. “Since the Americans are sanctioning us while the Chinese are helping us, the choice is obvious.”
Another point of concern for the Kremlin is who controls the “killer switch”. Russian security fears that the Pentagon might force western vendors to knock out Russian 5G networks, potentially unleashing political and economic chaos, and even regime change. Again, China appears to be the lesser evil. No one in Moscow loses sleep worrying that Beijing might try to topple Vladimir Putin’s government. To be on the safe side, the Kremlin is also taking steps to ensure that communication systems used by the military and security officials are locally produced.
Alongside all this, Huawei’s is running a sophisticated public relations strategy to win Moscow’s trust. Even as Donald Trump’s administration has pushed Huawei out of partnerships with western research institutions, the Chinese company has quadrupled its research and development personnel in Russia to 2,000 employees.
