Reports that Berlin refused to ban Huawei from Germany鈥檚 5G internet infrastructure appeared to mark a loss for the Trump administration鈥檚 efforts to combat the growing influence of China鈥檚 tech giant. However, U.S. Ambassador Richard Grenell wasted no time in kicking off a new round of the fight. Grenell Berlin that the United States might withhold intelligence cooperation from Germany if Huawei isn鈥檛 banned. German Chancellor Angela Merkel鈥檚 next move will affect not just the transatlantic relationship, but the future of Germany鈥檚 economy.
The December arrest of Meng Wanzhuo, Huawei鈥檚 chief financial officer and the daughter of its founder, shone a spotlight on the quiet American diplomatic effort to put a stop to the Chinese company鈥檚 global ambitions. Huawei is a frontrunner in the race for high-speed 5G internet networks and is under intense scrutiny from the United States. Not only has an of Iran sanctions landed Meng in legal peril, Huawei is in court for allegedly about T-Mobile鈥檚 robotics. In addition to its legal campaign against Huawei, the United States is discouraging its allies from allowing the company to build 5G networks because of national security concerns stemming from Huawei鈥檚 close relationship with its home government.
U.S. allies across the Pacific have sprung into action to block Huawei鈥檚 access to their 5G networks, but the Europeans are dragging their feet. The United Kingdom, whose intelligence services operate a lab to test Huawei鈥檚 products, claims that it has found little evidence of 鈥渂ack doors鈥� that would grant access to Chinese intelligence services. What it has found is shoddy coding that introduces vulnerabilities to such an extent that British intelligence 鈥渙nly limited assurance鈥� that Huawei does not threaten British national security. Despite the risk, the National Cyber Security Centre has not recommended a ban in the United Kingdom.
Germany shows similar reticence to lock out Huawei, which has tried to placate regulators a cybersecurity lab for the Germans that is modeled on the British one. The chancellery plans to require components of future network infrastructure to undergo testing in similar labs before installation.
This may be asking too much of German regulators. It is unclear whether German inspectors can attain certainty about Huawei鈥檚 activities where the British have not. And the head of Germany鈥檚 Federal Office for Information Security, the agency that will lead this testing, did not inspire confidence a 鈥渘o spy鈥� agreement with Beijing that bears a dismaying resemblance to a 2015 U.S.-China agreement that is widely regarded as a failure.
The debate about Huawei is often depicted as pitting economics against national security concerns, but that frame is becoming less helpful as Germany awakens and reacts to the extent of China鈥檚 economic ambitions. German economic minister Peter Altmaier and his French counterpart for a new industrial policy to protect strategic high-tech industries from foreign competitors. Their manifesto should engender political support: Annegret Kramp-Karrenbauer, the new leader of Germany鈥檚 Christian Democrats, said a few days earlier that 鈥渨e certainly need some kind of strategic industrial policy鈥� to manage China鈥檚 challenge to Germany鈥檚 economic and social system. It is difficult to imagine an industrial policy for the high-tech sector that does not include 5G.
The stakes are high because 5G policy is not merely about the esoteric details of making the internet faster. It touches directly on the future of the German auto industry 鈥� the heart of its economy. The automotive industry, which directly or indirectly accounts for one out of every seven , must keep pace in the development of electric and autonomous vehicles for the German economy to successfully adapt to the advent of electric vehicles, which will be as it is.
Huawei鈥檚 entry into Germany will threaten this development. Autonomous vehicles require massive amounts of data exchange, which in turn or similar high-speed wireless internet technology. Inserting Huawei into the middle of this exchange will to staggering amounts of information about Germany鈥檚 self-driving cars as their manufacturers roll them out. Given Huawei鈥檚 history of intellectual property theft, it is reasonable to assume that the tech giant may find another use for that data. In the near future, German car manufacturers might find themselves competing against Chinese rivals sporting copies of their own technology.
Huawei鈥檚 entry could threaten not only German national security, but the future of the German manufacturing economy. German monitoring may be enough to forestall a catastrophe. The question is how willing Merkel is to bet on it.