The EU needs to keep China’s national tech champion on the ropes

The EU needs to keep China’s national tech champion on the ropes

Last week saw Huawei kit out a colossal fish farm in China with tens of thousands of its solar panels to shield fish from the sun while generating electricity—just the latest in a recent spate of new business ventures for the Chinese tech giant.

Huawei’s rapidly diversifying business lines, however, are less a sign of the company’s innovative spirit and more an indication of how the West’s growing security concerns over Huawei technology have undermined the company’s business strategy. Indeed, Huawei—once the world’s largest smartphone maker—has struggled to cope with U.S. sanctions which cut it off from Google’s Android operating system and sharply curbed its access to critical technology such as microchips. With the Chinese firm’s stockpile of chips dwindling and the Biden administration recently labelling Huawei’s telecom and video equipment an unacceptable national security risk, it’s no surprise that Huawei founder Ren Zhengfei has been putting out feelers in worlds as diverse as electric vehicles, agriculture, mining and, most worryingly, vital components for solar energy systems. Huawei’s interest in this sector is perfectly logical. Solar power has grown quicker than any other major energy source over the past decade, and Western countries are rushing to increase their renewable capacity—the EU, for example, agreed in December to make their 2030 emissions reductions targets even more ambitious. Huawei has quietly built up a commanding position in the global market for the inverters which convert DC into AC current in a solar energy system—and, to Huawei’s relief, it doesn’t need to rely on American chips to manufacture its inverters, because the required 28-nanometer technology is readily available in China. American lawmakers’ warnings that Huawei-produced solar inverters could pose a serious risk to electric infrastructure, however, were also perfectly logical. Given Huawei’s troubling links to the security services of the ruling Chinese Communist Party, there is a real fear that its solar inverters could compromise any electric grid they are embedded in. EU member states, which are slowly waking up to the risk Huawei poses in the telecom sector, should not stand by idly as it shifts its business into the solar sphere. Along with the EU’s push to decarbonise came a wave of investment in renewable energies, allowing Huawei to leverage its market position and capitalise on EU member states’ emphasis on solar capacity expansion. This has created a bizarre double-standard across the bloc: while the Chinese giant has executed a very successful leap into the European market in the solar sector without much resistance, European countries have reacted with alarm to Huawei’s security implications for 5G infrastructure by following Washington’s example and banning Huawei as a supplier of critical 5G components. However, in light of the increasing digitalisation of energy infrastructure where core components like inverters are frequently connected to the Web, inaction on Brussels’ part is no longer a viable option. As the managing director of the European Network for Cybersecurity (ENCS), Anjos Nijk warned poignantly earlier this month, “Politicians are worried about 5G suppliers, but those same suppliers are builders of the biggest share of PV inverters… Those systems are in people’s homes and a manufacturer has direct access to them, can switch them on and off. With so many devices, it could cause a blackout”. Turning a blind eye to these risks could have significant knock-on consequences for the EU, threatening bilateral relations with the US in the best case and the entire European electrical grid in the worst hand scenario. Indeed, if evidence is needed that such concerns are anything but well-founded, a quick look at India will suffice. Earlier this year, alarming reports surfaced suggesting that Beijing abused its technological presence in India to create a widespread power outage in Mumbai that left 20 million people in the dark—apparently intended to warn Indian policymakers not to push too hard on geopolitical issues. As tensions between the West and China rise, Beijing might well be tempted to use its foothold in Europe’s solar infrastructure to turn off the lights for millions when the geopolitical going gets tough. The Indian blackout was an example on a stunningly large scale, but disruptions to energy grids are an increasingly significant concern. Indeed, given that in 2019, the energy sector was the world’s most widely targeted area for cyberattacks, it is high time policymakers in Brussels take a page from Washington’s approach to the threat. After a bipartisan coalition of U.S. lawmakers called for Huawei products to be excluded from the country’s solar energy systems, Huawei closed its U.S. inverter business in the face of an “unwelcoming climate”. Brussels has been slower than Washington in general to take a strong stance on Chinese businesses like Huawei—indeed, contracts awarded to Chinese companies by European governments even doubled in value to almost €2 trillion in 2020. The EU can’t afford to drag its feet on Huawei’s incursion into the solar sector, however, given how closely linked the company is with the Chinese state, how sensitive the industry involved is and how energy infrastructure is increasingly becoming “a key target for adversaries”. Concerted effort on both sides of the Atlantic has significantly diminished Huawei’s influence—and, by extension, the influence of the Chinese government and intelligence services—in the telecommunications sector. It’s now Brussels’ turn to join Washington in pushing back against the Chinese tech giant’s foothold in the sensitive renewable energy industry, as well.

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