Britain's decision to green light Huawei's involvement in its future high-speed fifth-generation, or 5G, telecoms networks represents a clear defeat for American diplomacy. A similar pattern has emerged across Asia over recent months, with Washington's dire warnings about spying risks and the Chinese company's equipment largely ignored.
It now seems clear that most major telecoms markets will allow some kind of role for Huawei kit as they build out 5G. The question is how this process will be managed, an area where many Asian nations are lagging behind their European counterparts.
Recent debates over Huawei reveal stark differences in worldview. Matt Pottinger, the official at the U.S. National Security Council with responsibility for China, flew to London as part of a delegation in mid-January, bearing a dossier detailing Huawei's security flaws and threatening intelligence cooperation between the two allies.
Speaking in India a few days later, he put the stakes in even starker Cold War terms. "Can you imagine Reagan and Thatcher having a conversation in the 1980s saying, 'Let's have the KGB build our telecommunications systems, because they're giving us a great discount'?" he said.
Britain's security establishment has largely shrugged off such threats. 5G technology is both ultrafast and ultra-complex, requiring frequent software updates to run networks which will soon underpin everything from industrial robots to corporate cloud computing. American experts fear these updates could hand China's state, using Huawei as its proxy, the ability to intercept communications, and potentially disrupt critical infrastructure, in other countries.
Britain's spies instead make a distinction between the network core, which will be Huawei-free, and the edge, meaning physical boxes installed on telecom towers, which will not. In its decision on January 28, the U.K. also capped Huawei's potential market share at 35%
Many Asian governments are taking a similarly pragmatic view, trying to balance genuine security worries with the need for investment using Huawei equipment that is seen as cheap and effective.
India confirmed in December 2019 that it would allow Huawei to take part in 5G trials. Indonesia, Malaysia and Thailand have taken similar steps. Even nations with close historic ties to the U.S., like Singapore and South Korea, look set to allow Huawei in some form too.
This picture is not uniform. Some U.S. allies like Australia and Japan are sticking to earlier blacklistings. Vietnam recently said it would try to develop a rival 5G technology, to avoid reliance on Huawei. But these look like the exception, not the rule.
The risk now is that public discussion about Huawei's role gets stuck between two unhelpful extremes. One is the Cold Warrior approach deployed by Pottinger and other U.S. officials, which does little to manage the security risks 5G represents, given Huawei's role within it.
The second is more complacent: the argument that since American spies can already access much of the world's sensitive communications, it matters little if China is soon able to do the same.
Instead, a more nuanced discussion is needed, recognizing that secure 5G networks require a complex array of policies that most Asian economies have not yet begun to implement.
Huawei stresses that it is not involved in spying. It suggests it would decline to cooperate with future Chinese requests to provide access to communications, despite being obligated to do so under China's 2017 National Intelligence Law. No evidence of "back doors" has been found in its kit.
Even if you take the company at its word -- and many U.S. security experts do not -- it represents just one of the many risks that China's dominance of future 5G infrastructure brings. Plenty of other Chinese companies provide parts for telecoms networks. Western 5G providers like Sweden's Ericsson source components in China too.
Responding to these threats is partly a question of investment. Countries like Britain and Germany have well-resourced security agencies with the technical ability to assess network providers, and potentially to police the shifting future distinctions between core and noncore networks. Others around emerging Asia need to begin to build similar capacity.
Developing open risk assessments would help too. The U.K.'s Government Communications Headquarters established a dedicated Huawei Cyber Security Evaluation Centre to study the company. As a result, Huawei is busy spending billions of dollars to fix flaws in its code. Carrying out similar forensic assessments would help Asian nations improve their network security, as would sharing them with one another.
Finally, countries that want to keep corporate and citizen data secure from foreign eyes should support the use of end-to-end encryption, for instance by encouraging it in popular messaging services.
This means rethinking the direction of policies around the region, where governments are mostly pushing technology companies like WhatsApp to build back doors to encrypted services, rather than encouraging the use of encryption more broadly.
Britain's decision this week merely confirms what has been clear for months. Huawei will play an important part in much of the world's future 5G networks. America's attempts to stop this have largely failed. But if the battle to keep Huawei out of 5G has been lost, the battle to manage the risks that Chinese domination of 5G infrastructure brings is only just beginning.
James Crabtree is an associate professor in practice at the Lee Kuan Yew School of Public Policy at the National University of Singapore. He is author of "The Billionaire Raj."