Two years ago the Dutch government warned against working with Chinese telecom giant Huawei. Now they're practically begging for the company to invest in the Netherlands.

During last May's trade mission to China, Economic Affairs Minister Maxime Verhagen met with the directors of Huawei – the only company the minister met with – and he had a clear message for the company's directors: please come and invest in the Netherlands.

A different tone
However, just two years ago, the Dutch government had a very different message. At that time, the Interior Ministry's IT security branch, known as GOVCERT, warned of the possible risks of working with Huawei. The reason behind the warning has never been made clear.

According to the Dutch security service (AIVD), it is absolutely certain that China is spying in the Netherlands. In its 2010 annual report, the AIVD reported that China was accumulating economic and technological information.

The information is being gathered through a variety of methods including digital eavesdropping and theft of information from telecommunications networks. However, the AIVD has refused to give any details about Huawei's possible involvement in any digital espionage, citing security considerations.

Huawei
In just a few short years, the Chinese telecom giant has expanded enormously and is now the world’s second largest, behind Sweden’s Ericsson. 

The company has been active in the Netherlands for a number of years now. Amongst other things, it provides network connections for all the large Dutch telecom providers. The Dutch branch employs 280 people, 105 of them from China.

Chinese espionage
Huawei has been a cause for concern in other parts of the globe: one of the company's workers informed Australia's Secret Service that Huawei's Australian branch had direct links with China's military. In the US, the House of Representatives prevented the Chinese telecom giant from taking over server technology company 3Leaf, on the grounds that it would compromise the country's internal security.

The suspicions don't come out of the blue: the company's founder served as an officer in the Chinese army and its number two man used to work for the internal security ministry. Beijing also carefully scrutinises and has close ties with all large Chinese companies.

Backdoors
According to telecommunications experts, it's possible that telecommunications equipment and software could have secret backdoors programmed into them, which would allow the parent company to access data long after the equipment and software was sold to a third party.  According to Christian Doerr, data network expert at Delft’s Technical University, it is impossible for providers to purchase equipment and software from third parties to guarantee the security of their networks.

Because of persistent complaints about Huawei's involvement in espionage, the company offered last year to disclose the source of its products to customers with reasonable requests. But Mr Doerr says this doesn't amount to much: "If you could print the source code, you would have a house full of paper. That's simply too much information to check. "

No response
The warning from GOVCERT seems to have had little effect. For example, Dutch telecom provider KPN is currently working with Huawei on building opportunities for cloud computing and digital storage for documents. KPN says it's aware of the charges against the company, but "has no reason to suppose that Huawei is engaged in improper practices."

Huawei provides Vodafone and other companies with network links. Neither Vodafone nor T-Mobile would comment on what they have done about the warning from GOVCERT. Huawei Netherlands has also not responded to our questions about the Dutch warning.

The IT security team GOVCERT believes its job is done. "We identify trends in cyber security and if necessary, we send out a warning. We look after the digital security of the government. What companies do about our warning is up to them."

Political discussion
The United States is much more cautious: a Chinese company with ties to the military is by definition not to be trusted. Vital parts of the US economy are shielded from unwanted foreign investors, including Huawei.

This fear of espionage is unjustified, says network builder Gert Nieveld.

"Of course, Huawei builds things which could allow them to tap our phones or computers. But why would they do it in a roundabout way? There are easier ways for the Chinese government to acquire sensitive information."

Lagging behind technology
However Martin Pekárek, technology and privacy researcher at Tilburg University, says the attitude of the US is understandable. "Why should you trust certain providers or countries with new technologies?" he asks. So far, politicians are looking the other way, says Mr Pekárek: "Dutch policy is lagging behind the technological developments. The impact of technology is not on the radar of most MPs."

(jc/as)