The UK should revisit its decision to ban the Chinese telecoms equipment maker Huawei from its 5G network in the post-Trump era and recognize that it will worsen England’s north-south divide, the vice-president of Huawei has said. Victor Zhang’s intervention comes as Boris Johnson prepares on Monday to meet the Northern Research Group, the lobby group of Conservative MPs determined to turn the prime minister’s levelling up agenda into a reality, writes Patrick Wintour.
Zhang urged the UK to stay true to its roots as the birthplace of the first Industrial Revolution, saying the government could not afford to fall behind in the 5G revolution. In July the UK government, after pressure from the Trump administration, reversed a plan to let Huawei be a controlled 5G supplier, and instead ordered Huawei equipment be stripped out of the country’s 5G networks by 2027. Ministers at the time said the reversal was not caused by a new security services analysis of the security threat posed by Huawei, but by the Trump administration’s decision to block US conductors being used by Huawei.
Zhang said: “The decision is going to have a huge economic impact on the UK. The UK wants to see a balance of investment between London, the south-east, the Midlands and the north of England. World-class connectivity is crucial to this objective, and without that it is very difficult to close the gap in the economic imbalance in the UK.” Victor Zhang Huawei’s vice-president, Victor Zhang, giving evidence to the science and technology select committee in July.
He added: “The government itself has said it will lead to a three-year delay in the rollout of 5G, and this will have a huge economic impact. Many people are surprised by the scale of the impact of this delay. Third-party research by Assembly, an independent research firm, shows this delay will have an £18.2bn impact. “The research shows it will widen the north-south digital divide. In the north, the broadband carriage and speeds are already far behind London and the south-east. The delay in developing 5G will worsen the situation. The government is committed to superfast broadband by 2025, and with this decision the objective of levelling up becomes unachievable.”
If 5G were delivered nationwide without delay, three-quarters of its expected economic benefit would be likely to come in regions outside London and the south-east. Urging ministers to revisit the decision, Zhang said: “I hope the government will keep an open mind and, once they review the economic consequences, look to see if there is a better way forward.” He added: “As a global company we want to work with governments to ensure they have the policies to secure growth. The decision was a political one motivated by US perceptions of Huawei and not those of the UK. This is not really motivated by security, but about a trade war between the US and China.”
He said he hoped the new US administration would adopt a different approach to that of Donald Trump. Zhang also expressed fears that the UK’s traditional role as an open, free trading nation was under challenge, and rejected claims that his company represented the “dragon in the nest”, a phrase used by the chair of the foreign affairs select committee, Tom Tugendhat. He said: “Something is worrying me about the UK because discussions here are focused on the geopolitical conflict rather than how to improve the UK economy and make sure the country grabs the opportunity again to be a global leader post-Brexit, at the end of this year. All this is vital for the UK’s recovery post-Covid and after Brexit – trade, technology, digitalization and how to attract foreign investment to the UK.
“The UK was the birthplace of the first Industrial Revolution and it was going to lead the digital revolution. The UK has the DNA to develop the right policies to seize leadership in innovation.”
Critics of Huawei claim that despite the independent shareholder structure, the company can be directed at any minute by the Chinese Communist party to give its regime a backdoor to spy on British communications. Zhang pointed out: “GCHQ concluded the technical risks were manageable and so did two parliamentary select committees. Personally, I don’t think there is a security reason for the UK to stop using Huawei. America put pressure on the UK through sanctions on Huawei, and the UK – impacted by these new, unjustified sanctions – responded.”
In August Washington announced that companies would have to obtain a licence before selling Huawei any microchip that has been made using US software or equipment. Zhang argued for the importance of 5G, saying it was a massive step up from 4G in terms of capacity, speed and volume. “This makes it essentially the foundation for next-generation technology – AI/robotics/smart healthcare and education … The fast speed and near-instant latency mean tech can talk in almost real time … Those who come earlier to this will have considerable advantages over those who come later.”