Barr Rips China’s Dominance of 5G Technology as Major Threat
Barr Rips China’s Dominance of 5G Technology as Major Threat
(Bloomberg) -- The U.S. should urgently consider whether to enter into partnerships with companies of allied nations to counter the threat posed by China’s dominance of emerging 5G technology, Attorney General William Barr said, singling out Finland’s Nokia Oyj and Sweden’s Ericsson AB.
The U.S. should be “actively considering” investments into Nokia or Ericsson -- even weighing taking a controlling stake -- to accelerate development of an alternative to relying on Chinese technology and, specifically, Huawei Technologies Co., Barr said Thursday at a conference in Washington.
“It’s all very well to tell our friends and allies that they shouldn’t install Huawei but whose infrastructure are they going to install?” Barr asked at the event hosted by the Center for Strategic and International Studies. “There are only two companies that can compete with Huawei right now: Nokia and Ericsson.”
“We and our closest allies certainly need to be actively considering this approach,” Barr continued. “The risk of losing the 5G struggle with China should vastly outweigh all other considerations.”
Nokia on Friday said it “always welcomes investor interest,” but refrained from commenting further. Ericsson declined to comment, when contacted by Bloomberg. Ericsson’s biggest owner, Swedish activist investment firm Cevian Capital AB, said it viewed any potential U.S. interest positively.
Shares in Ericsson rose as much as 5%, while Nokia soared more than 7%.
U.K. Decision
Barr said China has emerged as the top geopolitical adversary to the U.S., adding it’s “imperative” that decisions are made “right away” about how to challenge Huawei’s 5G dominance.
Barr’s speech comes as the U.S. is struggling to persuade key allies to keep 5G components built by Huawei out of its telecommunications networks. The U.K. last month rebuffed the U.S. and said it will use Huawei technology in non-sensitive parts of its new networks.
Trump administration officials have argued that no part of a country’s 5G system is safe from Chinese espionage if Huawei technology is used. Huawei has denied that.
Barr blasted China for relying on a development strategy centered on technological theft from the U.S. and other countries.
“If the industrial internet becomes dependent on Chinese technology, China would have the ability to shut countries off from technology and equipment upon which their consumers and industries depend,” Barr said. “For China, success is a zero-sum game.”
The attorney general conceded that China is far ahead of the U.S. in developing and deploying the technology, unlike an earlier upgrade from 3G to 4G.
”For the first time in history the United States is not leading the next technological era,” Barr said.
Earlier Thursday at the conference, FBI Director Christopher Wray said his bureau has about 1,000 ongoing investigations related to China’s attempted theft of U.S.-based technology spanning just about every industry.
China is targeting technology from developing new corn seeds to software for wind turbines, blending traditional approaches such as joint ventures with U.S. companies alongside spying and hacking, Wray said.
Barr said he expected additional indictments and prosecutions related to Chinese hacking.
The cost to the U.S. is about $400 billion a year in economic loss from Chinese theft of proprietary data and trade secrets, said William Evanina, director of the National Counterintelligence and Security Center.
Evanina plans to release a new U.S. counterintelligence strategy on Feb. 10 that calls for a whole society approach to combating China.
“This is a call to arms for all of society,” he said. “We have to look at our economic security as part of our national security.”
--With assistance from Kati Pohjanpalo, Veronica Ek, Rafaela Lindeberg, Tasneem Hanfi Brögger and Jennifer Ryan.
To contact the reporters on this story: Chris Strohm in Washington at cstrohm1@bloomberg.net;Alyza Sebenius in Washington at asebenius@bloomberg.net
To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Larry Liebert
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