Chinese tech and networking companies are trying to get back into the good graces of cybersecurity watchdogs in the US and Europe in order to maintain access to the valuable markets. Officials continue to worry that companies linked to the Chinese state could insert backdoors or vulnerabilities that could enable espionage via China-manufactured tech.
Business Insider Intelligence
Here’s how two big companies are trying to keep operations going: Chinese telecom equipment companies ZTE and Huawei have both suffered from declining revenue amid concerns over the extent to which data flowing through their hardware is secure, but recent moves reveal differing strategies to address these worries.
- ZTE is opening a cybersecurity lab in Brussels next month to give customers and regulators a venue to look at its source code and security systems. The center is the company’s third, joining sites in Rome and Nanjing, China. It’s also creating a platform that will unify efforts and sync data in real time between these three sites. ZTE hopes that by giving partners ready access to its security engineers and its source code, authorities will become less reticent to allow engagement with the company. The labs echo a Huawei initiative from earlier this year, when the embattled telecom equipment provider opened its own cybersecurity transparency center in Brussels.
- Huawei is attempting to preserve its US-based research efforts by isolating its US research subsidiary Futurewei from the parent company, reports Reuters. Up to this point, Futurewei’s operations have been essentially inseparable from Huawei’s, with no separate branding or website. Now, however, Futurewei has barred Huawei employees from its facilities, moved to new IT systems, and shifted away from using the parent brand in communications. The US-based research company boasts an arsenal of over 2,000 patents and maintains a number of research partnerships with universities, which it wants to continue despite the current ban on US-based companies dealing with Huawei. It’s likely that Huawei and Futurewei envision reintegrating operations in the coming years should scrutiny on Chinese tech firms subside.
The bigger picture: Transparency is a better strategy than isolation for Chinese tech companies looking to reestablish the trust of US and European customers.
Despite Futurewei’s efforts to separate from Huawei, the close association between the companies will likely continue to cloud regulators’ perception of Futurewei. In fact, the separation could backfire and ultimately raise suspicions around both parties, as it looks like an attempt to circumvent current and future bans.
Transparency centers like the one ZTE is opening, on the other hand, could assuage some fears for officials in countries like the UK, for example, where the government’s final policy on Huawei networking equipment remains up in the air.
Data centers are unlikely to sway more fervent critics, but the ability to view source code and verify the security tools in place could help regulators better understand the underlying technology and rebuild confidence in the operations of Chinese tech firms.
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