Huawei has found in developing countries, and some with authoritarian governments, a niche for its business, especially for selling cloud technologies, said the International Center for Strategic Studies (CSIS), the second most important thank you thought in the United States.
In the past three years, the Chinese company has signed 70 agreements in 41 countries, either with foreign governments or state companies, to provide cloud infrastructure and e-government services.
According to the Huawei Global Cloud Strategy study, the actual number of deals is likely to be higher, as the Chinese telecom company reported providing cloud services in more than 140 countries, including more than 330 government projects.
“It is possible that many of the governments that Huawei counts in this statistic are sub-national entities within China, as it is the second largest provider of cloud services. But it is possible that there will be additional external deals that have not been publicly disclosed.”
In this way, Huawei was able to increase its income after the blockade imposed by the United States on the Chinese company to participate in the creation of the 5G network, which developed countries such as the United Kingdom have joined.
The CSIS report indicates that most of the agreements signed by Huawei in recent years, 72 percent, have been implemented in middle-income countries, where the participation of Mexico and Malaysia is most prominent.
The document adds that the Chinese company has focused on selling cloud computing solutions to emerging markets in Africa, Asia, Latin America, Europe and the Middle East.
“Huawei has made its cloud business a strategic priority. The US sanctions restricting their access to mobile semiconductors, and cloud computing has become an integral part of their survival,” the document said.
CSIS noted that due to the epidemic, the global adoption of cloud services has increased Huawei’s revenue by 168 percent during 2020.
The problem with this situation is that despite the fact that most of the countries that Huawei deals with are free or partly authoritarian, the technology has faced complications due to security issues, the Washington-based center said.
CSIS documented that a $ 53 million data center, set up by the Chinese Corporation for the Government of Papua New Guinea, demonstrated systemic security flaws, while last year a ransomware program isolated Cape Verde’s e-government services within four days.
The center warned that Huawei’s cloud infrastructure and e-government services deal with confidential data about the health, tax and legal records of citizens in all of these countries, and are used to operate critical infrastructure ranging from oil production and fuel distribution in Brazil, to power plant operations in Saudi Arabia.
“As Huawei gains space as a resource for governments and state-owned companies, its activities can provide Chinese authorities with intelligence information and even coercive influence,” he stressed.
Faced with this situation, CSIS indicated that the United States and its allies have more cloud products than Huawei offers in these countries, but indicated that to compete against the Asian company, funding will be required to build the infrastructure and provide technical assistance and cooperation to remove and prevent regulatory barriers.