16/10/2013 11:49 BST | Updated 16/10/2013 14:18 BST

George Osborne Welcomes Huawei's UK Investment, Despite Chinese Espionage Fears

Britain?s Chancellor of the Exchequer George Osborne gestures as he speaks at Peking University in Beijing Monday, Oct. 14, 2013. Britain will make easier for Chinese visitors to apply for visas following complaints from U.K. tourism businesses that the system doesn?t entice enough high-spending travelers from China. (AP Photo/Andy Wong)

George Osborne has welcomed Chinese tech giant Huawei's investment in Britain, despite security fears that the Chinese government could carry out espionage through Huawei's equipment.

Other security experts, like former CIA boss General Michael Hayden, have gone further and alleged that Huawei has already passed the Chinese government "intimate and extensive knowledge" from foreign telecoms system it is involved with.

Major General Jonathan Shaw, a former cyber-security expert at the Ministry of Defence, warned last year that the UK government was "dealing with the devil" by letting Chinese firms like Huawei access the UK's broadband network.

In his official visit to China, the Chancellor said he was "delighted" to welcome Huawei to Britain as it planned to build a £125 million research base as part of its £1.2 billion investment in the country. Speaking to students at Peking University, he said: "There are some Western governments that have blocked Huawei from making investments. Not Britain. Quite the opposite."


Parliament's Intelligence and Security Committee warned earlier this year that the Chinese government could "intercept covertly or disrupt traffic passing through Huawei-supplied networks".

Former CIA head General Michael Hayden warned that he had seen "hard evidence" that the firm had at least "shared with the Chinese state intimate and extensive knowledge of the foreign telecommunications systems it is involved with".

"As an intelligence professional, I stand back in awe at the breadth, depth, sophistication and persistence of the Chinese espionage campaign against the West," he added.

Last October, the US House of Representatives' Intelligence Committee called on American companies and officials to boycott Huawei, concluding that the firm was financially backed by the Chinese government and provided services to a top cyber-warfare unit in the People's Liberation Army.

Huawei has repeatedly denied engaging in espionage or any other wrongdoing. Huawei vice-president William Plummer said: "Someone says they got some proof of some sort of threat? Okay. Then put up. Or shut up."

"Huawei is a world-proven multinational across 150 global markets that supports scores and scores of American livelihoods, and thousands more, indirectly, through $6 billion a year in procurements from American suppliers."

The Chancellor also announced £800 million of Chinese investment in Manchester's 'Airport City' project, hours before the construction project's director resigned.

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