Richard Yu, the CEO of Huawei's consumer business group, at the launch of new 5G Huawei products in Beijing on January 24, 2019. Photo: AFP / Fred Dufour

These are surreal days for Huawei. On Thursday, the telecom giant hit the pause button on the cybersecurity row, which has spilled over from the trade war between the United States and China, to announce a breakthrough in 5G technology.

Speaking at the group’s research and development center in Beijing, Executive Director Ryan Ding unveiled a revolutionary chipset from Huawei’s arsenal of cutting-edge tech.

“Known as Tiangang, [it] will support simplified 5G networks and large-scale network deployment around the world,” he said.

“The company has now secured 30 5G commercial contracts [with more than] 50% in Europe,” Ding added, without revealing further details.

Still, the sprawling family-run business is under fire on numerous fronts.

Allegations that Huawei violated sanctions imposed on Iran by the United States led to the arrest in Vancouver in December of Meng Wanzhou, the chief financial officer and the daughter of billionaire founder Ren Zhengfei.

As the case drags on, she now faces extradition to the US.

Since then, another executive has been arrested. This time it involved espionage accusations in Poland. But unlike the Meng saga, authorities revealed earlier this month that the investigation was limited to employee Wang Weijing, who has since been fired, and not the company.

To add to the spate of negative news, Huawei has come under intense pressure about cybersecurity and perceived links to President Xi Jinping’s government.

Negative news

Countries such as Australia, New Zealand, Japan, the US and the United Kingdom have restricted market access, while Germany could join them, according to media reports.

In response, these allegations have been denied by the group.

“We don’t see any evidence … to say that Huawei is not safe. Cybersecurity is a common challenge. It is not an issue about any single company,” Chairman Liang Hua said at the World Economic Forum earlier this week.

“It’s [the] customers’ choice if they don’t choose Huawei. For the customers who choose us, we will focus on providing better services,” he added at the exclusive Swiss ski resort of Davos.

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Yet, the accusations persist.

Last week, it was revealed that the US Department of Justice had launched an investigation into the company. This is believed to involve the alleged theft of trade secrets.

“The probe is at an advanced stage and could lead to an indictment soon,” The Wall Street Journal quoted sources as saying, adding that the inquiry stemmed from an earlier civil case brought by US telecom firm T-Mobile.

At the center of the row has been Washington’s trade war stand on intellectual property infringements, cyber theft and Beijing-backed state subsidies.

The “Made in China 2025” plan, which aims to turn the world’s second-largest economy into a technological superpower, has also been singled out by US President Donald Trump.

Poster child

Since Huawei is the poster child of the ambitious program, the company has faced forensic scrutiny when it comes to 5G after pumping between US$15-to-$20 billion in R&D last year.

But it is the Meng case which has thrust the group into the global spotlight.

“Any person with normal judgment can see that Canada has made a serious mistake on the issue,” Hua Chunying, a spokeswoman for China’s Ministry of Foreign Affairs, said on Tuesday. “The Meng Wanzhou incident is obviously not an ordinary judicial case.

“Canada and the United States are abusing their bilateral extradition treaty, and severely infringing upon a Chinese citizen’s legal rights and interests. We urge Canada to release Meng, and take concrete measures to protect her legitimate rights and interests,” she added.

On Wednesday, the depth of the crisis was brought into sharp focus by Zhu Min, the head of the National Institute of Financial Research at the prestigious Tsinghua University.

As the former deputy governor of the People’s Bank of China, his views carry weight.

“The psychology has really changed because [the] technical war is interconnected,” Zhu, who was also the former deputy managing director at the International Monetary Fund, told CNBC. “I can tell you, after the Huawei events, Chinese money into Silicon Valley [will] stop. And no US [firms] will want to invest in China either.”

These are, indeed, surreal days.

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