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Major US research universities are cutting ties with Chinese telecom giant Huawei

A Huawei location in Santa Clara, Calif., on April 19, 2018. (Yichuan Cao/Sipa USA/TNS)

First Congress threatened to cut off federal funds to universities using components made by telecom giant Huawei. Next came a classified FBI briefing last fall for University of California research chiefs about foreign espionage threats.

Then in January the U.S. government charged the Chinese firm with bank fraud, violating U.S. sanctions against Iran and theft of trade secrets.

“This was the point in which the line was crossed for me,” said Randy Katz, UC Berkeley’s vice chancellor for research.

He promptly announced an immediate ban on new research with Huawei, suspending a partnership with one of the school’s largest corporate donors that had provided about $9 million over the past eight years.

Berkeley is among a growing number of American universities, including such research powerhouses as Stanford, MIT and UC San Diego, that have begun to cut off ties with Huawei. The moves come in response to warnings from U.S. law enforcement agencies that Huawei can’t be trusted and could secretly do Beijing’s bidding, whether by spying or sabotage.

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Moreover, the Trump administration wants to restrain Huawei — the world’s largest telecom equipment maker — from expanding its grip on development of critical 5G infrastructure, the next-generation wireless networking system that experts believe will transform connectivity for self-driving cars, factory automation and many other applications.

While Europe has generally been skeptical of White House calls to prevent Huawei from dominating new 5G networks, U.S. universities, many of which have long-standing relationships with Chinese entities, find themselves in a bind: China may be one of the largest outside sources of technology research funding, but it runs a distant second to Washington in underwriting such work.

UC San Diego, one of the nation’s largest research universities, counts on the federal government for most of its more than $1 billion in annual R&D spending. The school last August issued a six-month moratorium on new research involvement with Huawei, and last month extended that indefinitely.

Not only do universities fear jeopardizing hundreds of millions of dollars in federal grants, they don’t want to find themselves in the position down the road of having contributed to national security problems, however inadvertently.

“We are sensitive to the federal government’s concerns about technologies being appropriated by other countries to the detriment of U.S. national security,” Stanford said in December as it announced a moratorium on “new engagements, gifts, affiliate membership fees and other support from Huawei.”

As long ago as 2012, a House Intelligence Committee report warned that deploying Huawei gear could make U.S. infrastructure vulnerable to spying and cyber-attacks.

More recently, Congress’ 2019 appropriations measure for the Defense Department, signed into law in August, prohibits funds from going to universities and other institutions that use “substantial or essential components” from Huawei and certain other Chinese firms for telecom and video surveillance systems.

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Universities immediately began to scour their campuses for any Huawei gear. UC Berkeley ripped out Huawei-made video communications equipment at one of its off-campus sites, replacing it with an American brand.

The freeze by leading research universities should have little effect on Huawei’s ability to roll out 5G gear, in which Huawei already is a leader and has no American rival. Still, cutting off Huawei’s access to the resources of major U.S. research institutions could have ramifications for Huawei’s long-term growth and technical development.

It is also a further blow to the company’s reputation, at least in the West. Even as Huawei has become a formidable competitor in the global telecom industry, with competitive quality and pricing, it has become a virtual pariah in America.

Unlike Europe and Africa where Huawei’s equipment is widely used, the company’s products, which also include smart phones, have made little headway in the United States. And given the size of the American market and the reach of its technical and economic power, it may prove difficult in the years ahead to ignore the U.S. position.

Although U.S. officials have not offered any public proof of security problems with Huawei equipment, such as malicious code or back doors, they argue that Beijing could at any time order Chinese companies to hack into products they make for espionage or sabotage.

Huawei has insisted it would never accede to such requests.

The Shenzhen-based firm became a technological powerhouse in part by pouring billions of dollars into research and development, internally and with outside partners. The company could be at a disadvantage if it is slow to reap advances in, say, artificial intelligence and all of its potential applications.

Huawei’s partnership in Berkeley’s artificial intelligence research will go on for now because it was already funded. As part of a consortium with other corporate donors that includes Intel and Google, Huawei does not have exclusive rights to any results.

Huawei, for its part, has made little public comment about the cut-off in research ties with universities in the United States and some elsewhere, including Oxford. But a top company research official, in a recent newspaper ad that sought to counter U.S. pressure on Europe to ban Huawei, claimed it had never appropriated anyone else’s discoveries and thanked European universities for cooperating on mutually beneficial research.

“All the papers and patents based on joint innovation belong to both sides or to scientists,” said Zhou Hong, president of Huawei’s European Research Institute.

For American universities, it’s not just about research funds. With more than 400,000 Chinese nationals studying and teaching at U.S. colleges, many schools are concerned that the attention on Huawei and broader U.S.-China tensions could hurt another critical source of revenue: full-tuition-paying students.

The University of Illinois, which has also halted new Huawei-funded research projects, carries a $60 million insurance policy to protect against a sudden drop in students from China. Chinese enrollment slipped slightly from 2017 to about 5,800 last year, according to the university’s newspaper.

Cornell University is among those that haven’t placed new restrictions on Huawei research. A university spokesman said the school did a careful review to make sure there were safeguards and that they were in compliance with government laws. She declined to provide additional comment.

In 2017, government records show Cornell reported receiving a $3.9 million contract from Huawei’s investment arm, the single largest award to the school from a foreign source that year.

Berkeley’s ties with Huawei and its Silicon Valley research subsidiary, Futurewei Technologies, go back to 2011. Huawei’s total gifts to Berkeley since then represent only a speck of the university’s overall research spending.

None of Huawei’s existing grants to Berkeley involve sensitive technological secrets, said Katz, the vice chancellor. He described Huawei as having been a “responsible” research partner, and made a point of emphasizing that the university remains committed to upholding international scientific collaboration.

Berkeley’s chancellor, Carol Christ, worries about the larger relationship with China. She said the university has had a long and deep research relationship with partners like Peking and Tsinghua universities. Many of its faculty were educated in China.

”Obviously we have to be careful to protect our intellectual property, and I realize there are legitimate concerns about China’s practices in regard to intellectual property,” she said. “But nonetheless, I think the world has so much more to profit by the sharing of research than putting up walls.”

Times staff writer Teresa Watanabe in Los Angeles contributed to this report.

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© 2019 the Los Angeles Times

Distributed by Tribune Content Agency, LLC.