Growing international boycotts against doing business with Russia have created opportunities for Chinese firms with fewer scruples about supporting aggressive tyranny.
One of those opportunistic Chinese companies is reportedly electronics giant Huawei, which was already Russia’s top telecom equipment provider.
Australian Defense Minister Peter Dutton on Monday said reports of Huawei stepping up to help Russia were “deeply concerning.” Huawei also has a sizable market presence in Australia.
“We’re seeing reports today that Huawei, a Chinese telecommunications company, is providing support to Russia to keep their Internet up and running to sustain the attacks from hackers around the world, that are attacking different infrastructure and naval and military assets of Russia,” Dutton said in an interview with ABC Radio Adelaide.
“Which is deeply concerning, I must say, when every other responsible country in the world is looking at ways that they can sanction and stop trading with Russia to keep the pressure up on President Putin to stop these horrific acts of war crimes that we’re seeing committed by Russia at the moment,” he continued.
British MP Iain Duncan-Smith was also troubled by reports of Huawei helping Russia.
1) I raised the issue of #Huawei likely helping #Putin in the @HouseofCommons this week. I'm concerned that a company seen by the UK Govt as such a national security threat that they were unable to allow their equipment to stay in Britain’s new 5G system are still here in the UK.
— Iain Duncan Smith MP (@MPIainDS) March 6, 2022
Polish soccer star Robert Lewandowski resigned his position as Huawei’s “regional ambassador” to central and eastern Europe on Monday. The report about Huawei helping Russia was reportedly a factor in Lewandowski’s decision, although his agent would not confirm it was the major reason he broke with Huawei.
Lewandowski is an outspoken critic of Russia’s invasion of Ukraine:
As an athlete, I can't pretend nothing is happening🇺 #StandWithUkraine pic.twitter.com/eL0ccpJhdG
— Robert Lewandowski (@lewy_official) February 26, 2022
“I can’t imagine playing a match with the Russian National Team in a situation when armed aggression in Ukraine continues. Russian footballers and fans are not responsible for this, but we can’t pretend that nothing is happening,” he said after the Polish national soccer team announced it would refuse to play against Russia in a World Cup qualifying match on March 24.
Huawei has long cultivated a close relationship with the regime of Russian dictator Vladimir Putin, especially after the Trump administration banned U.S. firms from using Huawei telecom gear in 2019, a decision upheld by the Biden administration. Huawei clearly sees the Russian market as a cushion for lost Western business.
Last summer, Huawei launched the latest of several aggressive programs to recruit and train technical talent from Russian universities, with an eye toward overcoming technical hurdles created by U.S. sanctions. Russian officials eagerly welcomed the cooperation.
Outside observers noted that Huawei founder Ren Zhengfei is old enough to remember Russia helping Chinese scientists in the early years of the Chinese Communist Party, and his warm memories of that cooperation probably influenced his choice of Russia as Huawei’s first big international market in the 1990s.
The Council on Foreign Relations (CFR) noted in late 2020 that Huawei “rapidly developed its research operations in Russia” after the U.S. action in 2019. Much of Huawei’s growth in Russia was facilitated by reducing its operations in Australia, a close U.S. ally with reasons of its own to be suspicious of the Chinese telecom giant.
CFR detailed several Huawei programs to recruit and train Russian techs that could have laid the groundwork for the kind of Internet support touted by that alarming, now-deleted Chinese news report:
As top-tier American universities including MIT, Stanford, UC Berkeley, Harvard, and Yale have cut research ties with the telecom manufacturer and partnerships with universities in Australia, the United Kingdom and Canada have come under greater scrutiny, Huawei has made a strong effort to cultivate relationships with prestigious Russian universities. The Huawei Innovation Research Program, which offers up to $70,000 in funding for selected research projects, is the primary channel for these partnerships, funding research in areas like machine learning, neural networks, and data storage.
Outside of the program, Huawei has cultivated partnerships focused on talent and training. For example, in the past year, Huawei agreed to train graduate students at the Novosibirsk State Technical University, cooperate with the Moscow Institute of Physics and Technology’s (MIPT) Center for Artificial Intelligence on AI development, and establish a joint AI lab with the MIPT Phystech School of Applied Mathematics and Informatics. These research partnerships form part of Huawei’s R&D pipeline and help the company recruit new talent.
The Wall Street Journal (WSJ) noted on Monday that whatever Huawei is up to in Russia, it is far from the only Chinese corporation to contemplate a continued business relationship with Vladimir Putin’s pariah state. Other notable Chinese players in the Russian market that have been quiet about the invasion of Ukraine include Xiaomi Corp, which trails only Samsung as the top phone provider in Russia, and PC maker Lenovo.
Analysts told the WSJ there were a few factors preventing Chinese firms from having a field day in the widely-abandoned Russian market, including “logistical snarls in Russia, complications with payments from financial sanctions, and the risk of running afoul of the shifting and highly complex U.S. and allied export controls, even inadvertently.”
“Chinese companies have much more to lose than to gain by violating sanctions. For most Chinese companies, Russia is just too small of a market for the business to be worth the risk of getting cut off from developed markets or being sanctioned itself,” concluded a report from Gavekal Dragonomics.
The WSJ noted another interesting sign of possible cold feet among Chinese opportunists: China’s state-run Global Times allegedly ran an article last week touting the great opportunities for Chinese phone and auto companies in Russia after the rest of the world pulls out – but the article, like the piece that alarmed Australia’s Dutton and the UK’s Duncan-Smith, was subsequently deleted.
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