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How Huawei schmoozed its way into the heart of the British establishment

A Huawei sign is displayed on their premises in Reading, England, Tuesday, July 14, 2020. Britain's government on Tuesday backtracked on plans to give Chinese telecommunications company Huawei a limited role in the U.K.'s new high-speed mobile phone network in a decision with broad implications for relations between London and Beijing. (AP Photo/Matt Dunham) - Matt Dunham/AP Photo

The timing was no accident. At 10.40am, just as Boris Johnson's National Security Council was meeting to agree the removal of Huawei equipment from Britain's 5G network, the Chinese company announced that its UK chairman, Lord Browne of Madingley, had quit.

The resignation of one of the UK's stand-out businessmen of the past half century was the most obvious outward sign of Huawei's defeat in its bid to allow its equipment to form part of the UK's 5G mobile network.

The Chinese company's own long march through the British establishment to win over hearts and minds appeared to have come to an abrupt halt.

In 2015, the hiring of Lord Browne, a consummate corporate networker and former chief executive of BP, had been quite a coup. Until a few weeks before his appointment, he had been the "lead non-executive director" at the Cabinet Office since June 2010.

He joined other leading corporate lights on the company's UK board: Dame Helen Alexander, a former President of the Confederation of British Industry, and former UK Trade and Investment chief Sir Andrew Cahn.

One City financial source said: "They paid a fortune to John Browne – he was busy opening doors. His position in Government was quite helpful."

Lord Browne resigned as UK chairman of Huawei as it faced a Government ban on involvement in Britain's 5G infrastructure - F Carter Smith/Bloomberg
Lord Browne resigned as UK chairman of Huawei as it faced a Government ban on involvement in Britain's 5G infrastructure - F Carter Smith/Bloomberg

Huawei, a Shenzhen-based company providing hardware and software for much of BT's phone and broadband network, was by then well known for buttering up MPs and Government officials.

A Channel 4 Dispatches investigation in 2012 revealed Huawei had spent tens of thousands of pounds on trips for MPs, as well as donations to parties and Parliamentary groups, including tickets worth more than £700 for the Italian super cup final at the Bird's Nest Olympic stadium in Beijing in 2011, while officials were treated to concerts.

More recently, Thérèse Coffey, now the Work and Pensions Secretary, declared in her MPs' register of interests a dinner worth £400 from Huawei Technologies in October 2016 and a £1,000 donation for tickets to the Conservative business dinner at the party's annual conference in 2013.

Chi Onwurah, now Labour's Shadow Culture secretary, also accepted more than £400 worth of donations from Huawei for a consumer electronics dinner and a fundraising dinner in January and February 2018.

An investigation by The Times last year found Huawei had spent at least £140,000 on hospitality at Westminster for MPs and donations to political parties and parliamentary groups, while it had secured at least 35 meetings with ministers and audiences with Theresa May and her predecessor David Cameron during their spells as Prime Minister.

Away from politics, Huawei had been a supporter of the Prince of Wales' Prince's Trust youth charity since 2007, donating nearly £500,000 since then. It had also been striking a dizzying array of deals with UK universities, starting with Cardiff and Manchester in 2015.

Huawei struck deals with a number of UK universities - Chris Ratcliffe/Bloomberg
Huawei struck deals with a number of UK universities - Chris Ratcliffe/Bloomberg

Two years later, Huawei signed up for a three-year project with Edinburgh University, and in November of that year, a five-year deal worth £25 million with Cambridge University to establish a joint research and collaboration group "aimed at enhancing the societal impact of communications technologies".

There were further tie-ups with Queen's University Belfast, the University of York and the University of Surrey, where Huawei funded a £5 million 5G innovation centre, while in May this year, it unveiled another £5 million deal for a new tech campus with Imperial College London.

Oxford University has had two projects worth £700,000 funded by Huawei. And last month, Huawei’s plans for a new £1 billion research and development centre in Sawston, near Cambridge, creating 200 jobs, were given the green light by councillors.

Huawei is now well established in the UK, with 1,000 people at its UK base in Reading and a corporate affairs office close to Westminster.

It is the third most popular smartphone maker after Samsung and Apple, with more than two million Britons owning Huawei phones. Yet Huawei's success in the UK – and its deals with universities – have always been set against a drum beat of concern about its links to the Chinese state, with the US warning that Huawei equipment could be used to create a "backdoor" into foreign mobile and data networks.

Even when then-Prime Minister Mrs May decided to allow Huawei to help build "non-core" parts of the 5G network, such as antennas, last year, Rob Joyce, a senior adviser at the US National Security Agency, likened it to giving Beijing a "loaded gun".

The love-in with Huawei started to cool last year when two universities with which the Chinese company had signed deals – Oxford University and Queen's University Belfast – as well as the Prince's Trust, said they would not accept any more of the Chinese company's money. The question now is whether the other universities will also change their tune.

Sir Iain Duncan Smith, the former Tory leader and an arch critic of Huawei, said on Tuesday: "They have had this huge campaign to persuade everybody, articles, talking to people, lobbying the Government, they have spent millions in the last two or three months. And now Lord Browne leaving means it is over, the gravy train is over for these guys."

A Huawei spokesman paid tribute to Lord Browne saying he had been "central to our commitment here dating back 20 years" and since 2015 had "brought with him a wealth of experience which has proved vital in ensuring Huawei’s commitment to corporate governance in the UK".

Huawei has always denied any link to the Chinese state, or that it poses any security threat.

William Xu, a Huawei board director, defended the university tie-ups in December 2019, describing them as "a two-way process where both parties exchange ideas and mutually benefit".

The question now is what Mr Johnson's decision to force Huawei out of the 5G network by 2027 means for the company in the UK in the long term.

Ed Brewster, the company's UK spokesman, said on Tuesday: "Regrettably, our future in the UK has become politicised. This is about US trade policy and not security.

"Over the past 20 years, Huawei has focused on building a better-connected UK. As a responsible business, we will continue to support our customers as we have always done.

"We will conduct a detailed review of what the announcement means for our business here, and will work with the UK government to explain how we can continue to contribute to a better-connected Britain."

Huawei's best hope could be the seven years that UK mobile phone providers have been given to remove its equipment from 5G infrastructure.

Between now and 2027 there has to be another general election, and therefore possibly a new Government with new policies and priorities.

Bob Seely, the Tory MP who has been marshalling the opposition to Huawei in Parliament, described it as a "long, slow goodbye to Huawei", adding that "seven years is a very long time in politics".

And, as the Chinese have demonstrated for centuries, they have time on their side.