By Mark Richards.

Should we worry about the Chinese state spying on us? Plenty of countries around the world are so concerned that they are now refusing to buy Chinese equipment for key installations. Are they right to worry? And what about your mobile phone…

We have written a lot about China recently. Earlier this month it was Singles’ Day – the annual online shopping bonanza – and Alibaba smashed all records by taking $1bn (£780m) in just 85 seconds. The Chinese economy is growing at a relentless rate – around 6.5% a year, a figure the West cannot even dream about – with any slowdown in Chinese trade rippling around the world.

Premier Xi Jinping is now effectively ruler for life and his Belt and Road initiative is set to extend Chinese influence through Asia and into Africa.

But – as we have also written – Xi also seems set to extend the Communist Party’s influence over the social side of life in China. The tool he will use to do this is China’s ‘social credit score,’ which threatens to see ‘good citizens’ rewarded with better rates on their savings and access to the best schools and medical facilities – while those who smoke on the train or cross against the red man will find that they cannot get their children into the best schools, cannot get a loan and perhaps even cannot get a date – as their bad behaviour sees them excluded from the most popular dating apps.

Hang on, you say. What does less-than-perfect behaviour – which is presumably monitored by the state – have to do with dating, which is an app on your phone? Simply that the all-seeing eye of the Chinese Communist Party wants to constantly monitor its citizens – and it seems that a phone is a good way to do that, and it may not be stopping at Chinese citizens.

Huawei and the Chinese state

In 1987 Ren Zhengfei, a former engineer in the People’s Liberation Army founded Huawei. The company has grown exponentially and now employs 170,000 people (around 40,000 more than work for Apple) with 76,000 of those staff engaged in research and development around the world, including the UK.

Huawei is becoming increasingly well-known in the West as its latest phone, the Mate 20 Pro, earns impressive reviews. But there are increasing security concerns about the company and, in particular, its close ties to the Chinese state.

Could Huawei be using the telecommunications networks it now builds to obtain information for the Chinese government? It is a risk an increasing number of countries are not prepared to take.

China and intellectual property

Is it Time to Worry about China?

There have always been rumblings about China’s cavalier attitude towards intellectual property. (What is intellectual property? Simply put, it’s the result of creativity – inventions, patents, copyrights, designs, symbols and names used in commerce, plus literary and artistic work.)

In theory, Intellectual Property Rights (IPR) have been protected in China since 1979, although there have been plenty of anecdotal stories of them being infringed, or ignored altogether. According to Wiki, the American Chamber of Commerce surveyed 500 of its members doing business in China for a 2016 survey. It found that while the situation is improving ‘significant challenges’ remain, with trade secrets the least protected area under IPR.

But stealing the design for say, a mobile phone is one thing: using that phone – and the network it operates on – as a ‘backdoor’ for spying is quite another.

New Zealand the latest country to take action

Gradually countries around the world have begun to take notice of the potential threat posed by Chinese installations in their crucial data and communications networks.

Now New Zealand has become the latest country to block a proposal to use telecoms equipment made by Huawei because of national security concerns. Spark NZ – as far as I can tell New Zealand’s equivalent of BT – wanted to use Huawei equipment in its 5G mobile network. ‘Absolutely not,’ said NZ’s government security agency, fearing that the deal would bring significant risks and banning the move on national security fears.

NZ is a long way from the only country to have acted in this way. As 5G networks are being built in more and more countries so an increasing number are saying ‘no’ to Chinese technology being included. The move in New Zealand follows a similar decision in Australia, where the government blocked the involvement of both Huawei and fellow Chinese firm ZTE on the same national security grounds.

Tom Uren, of the International Cyber Policy Centre at Australia’s Strategic Policy Institute, said that the Chinese government had

“clearly demonstrated the intent to steal information over many years. The Chinese state is engaged in a lot of cyber and other espionage and intellectual property theft.”

In the US, President Trump signed a defence funding bill in August that blocked US federal agencies from purchasing any Huawei or ZTE equipment.

But what about Apple and Amazon?

Clearly Amazon and Apple – the two companies who were in the race to be the first valued at a trillion dollars – are not US government agencies. But have their data systems already been spied on by China?

Back in October Bloomberg published a report suggesting that Amazon and Apple were among US companies and agencies that have had data stolen by Chinese spies. Specifically, the report suggested that the data was ‘siphoned off’ via tiny chips inserted on server circuit boards, made by a company called Super Micro Computer. The allegation was that the chips had been compromised during the manufacturing process, apparently by Chinese sub-contractors acting on the orders of the Chinese army. Once compromised, the chips had become active once they were up and running.

All three companies denied the allegations, with Super Micro filing a letter with the US Securities and Exchange Commission saying that it was “confident” no malicious hardware had been implanted. Amazon and Apple dismissed Bloomberg’s claims as “untrue.”

James Bond? Spooks? It is certainly the stuff of spy fiction – but it illustrates the very real concerns about Chinese technology. With 90% of the world’s PCs built in China and Huawei now overtaking Apple to become the world’s second-largest smartphone maker, maybe we should all start to worry…