Technological dependency and cybersecurity are becoming a hotly debated topic. The Czech government recently restricted the use of Huawei phones for official use, the U.S. is dissuading its European partners from allowing China to build their 5G networks, and the EU recently warned of relying too heavily on Chinese technologies and investments.

Do Chinese investments or Chinese technology like Huawei represent a security threat?  How is the perception of threat informed by U.S.-EU relations, EU-China relations, and Sino-American relations?

The European Liberal Forum in cooperation with the Institute for Politics and Society organized a debate on Technological Dependency and Cybersecurity (30th April 2019; Prague Czech Republic).

The event introduced following speakers:

• Ondřej Malý, Former Deputy Minister of Industry and Trade for the Internetisation of the Czech Republic, Ministry of Industry and Trade,
• Kateřina Procházková, Former Czech Radio reporter in Asia and foreign editor of Czech TV, Journalist and Analyst of the project Sinopsis,
• Martin Rehák, CEO & founder, Bulletproof AI,
• Jan Klesla, Digital Expert,
• Maria Staszkiewicz, Director of Czech FinTech Association.

The opening speech gave Erik W. Black, Cultural Attaché, U.S. Embassy in the Czech Republic and the debate were moderated by Roman Máca, analyst, Institute for Politics and Society.

Kateřina Procházková mentioned causa „Huawei“. She considers activities of the Chinese company as a security threat because there is a close connection with Chinese non-democratic and very ambitious régime. She mentioned also Chinese legislation from 2017 where is said that Chinese businesses and companies have to be loyal to the state and closely cooperate with security institutions.

These activities are also followed by a technique known as „elite capture“. As a case study she described the recent visit of the Czech president Zeman to China. Zeman in China have met director and founder of the Huawei. Zeman supported Huawei for activities of implementing 5G networks and for digitization of the Czech Republic.

His proclamations were followed by Chinese media and statements of Zeman were amplified. In this case we can see, that Huawei has a big interest to cultivate relationships with Western politicians supporting their activities.

Procházková also described cooperation of Huawei with Chinese army. This cooperation is based on development of information technologies. The Huawei causa is not only topic for Europe. She mentioned an experience from countries as Australia, New Zealand, Canada. From a prospective of a European country we can remember arrestation of Huawei employee in Poland suspicious for espionage.

Ondřej Malý remembered and described the beginnings (since 2004) of Huawei activities in the Czech Republic in the area of fix and wireless networks. The success of Huawei is based on quick reactions to actual situation on the market. Huawei can quickly find good solutions for a reasonable price, underlined Malý.

There were also done big investments to new technologies by Huawei. The amount invested to research and development is two times bigger in comparison to other Huawei competitors together. Huawei is now on the fifth place in investments to research and development in the world ranking.

In the USA – China trade war is a problem for American companies to replace Chinese technologies because the American in a specific field do not exist. The core for these services we can find in Scandinavia, South Korea and China, said Malý.

Martin Rehák mentioned that digital networks from strategic and economic prospective are for state more important nowadays than highways. Rehák is also sceptic about Huawei solutions especially product for end users as e.g. cell phones. The networks are quite safe. As the most important issues he sees accessibility and resilience.

In the case of blackout of the communication networks, the most of the Czech companies would be force to stop their activities. Huawei is a company what pushed down a “price of networks” on the market. They proposed cheap prices in comparison to other companies. Huawei is competitive because of good cost-benefit balance.

Jan Klesla also took a look into the history of Huawei activities in the Czech Republic. He mentioned that Czech market served as a testing place for next Huawei activities in Western markets especially in Europe.

Klesla said that the Communist Party of China openly supports own “national champions” and Huawei is one of them. There is also a problem of unclear background of investments. The background is very important to investigate, if we want to know more about the risks and threats, he said.

China is also a top country in various areas as artificial intelligence, where China has, we can say, no competitors. Chinese specific of the state regulated market gives an advantage to Chinese companies on international level.

He also named a strategy “Made in China” 2025 where is written that all components for autonomous cars should be produced in China. It can be a problem for Czech (e.g. Škoda) and other European automotive companies. In this case it is important to have the same or similar conditions on Chinese market as Chinese companies have in Europe.

Maria Staszkiewicz as CEO of the Czech Fintech Association mentioned a challenges for equal regulation in digital financial services accessing our markets. She reminded, that these services are also used by many criminal activities. We can describe them as fast transfers “around the world” helping to anonymize and hide criminal financial activities as well as activities of secret services of states with authoritarian regimes.

She mentioned case of GRU (Military intelligence of Russian Federation). GRU used blockchain technologies for masking own financial operations.

From a prospective of Staszkiewicz is very important the area of regulation and the principle of “open banks” to eliminate threats and illegal activities. There is important an issue of licensing of foreign companies accessing our markets. It is actually discussed on the EU level nowadays, mentioned Staszkiewicz.

The speakers also indicated a lacking European position in a global arena of new technologies and they formulated regarding security and development following challenges to tackle:

• Quality regulatory area and screening of foreign investments. The companies should know with who they deal.
• Trust towards democratic institutions, as well as democratic security agencies, and international cooperation in the field of security.
• Cooperation with local stakeholders and stimulation of projects to become national/European/global champions. Make Europe attractive for IT workers and developers as well as attractive for ambitious projects.