By Jack Stubbs
LONDON (Reuters) - A $2 billion effort by China's Huawei to address security issues raised in a British government report last year will take between three and five years to produce results, according to a company letter to British lawmakers seen by Reuters.
Huawei, the world's biggest producer of telecoms equipment, faces intense scrutiny in the West over its relationship with the Chinese government and U.S.-led allegations that its equipment could be used by Beijing for spying.
No evidence has been produced publicly and the firm has repeatedly denied the claims, but the allegations have led several Western countries to restrict Huawei's access to their markets.
Pressure has been growing on Huawei in Britain, one of its most important markets in Europe, since a government report in July last year found that technical and supply-chain issues with the company's equipment had exposed national telecom networks to new security risks.
Huawei has since committed to spending $2 billion in a drive to fix those problems, but in a letter to lawmakers last week, Ryan Ding, president of the company's carrier business group, said it would take up to five years to see results.
"Enhancing our software engineering capabilities is like replacing components on a high-speed train in motion," he said in a letter to the chairman of the British parliament's science and technology committee.
"It is a complicated and involved process, and will take at least three to five years to see tangible results. We hope the UK government can understand this."
A Huawei spokesman said: "We cannot add to what is outlined in the letter, where we have explained our position in full to the House of Commons Committee; and we are continuing to work closely with the authorities in the UK."
A spokesman for the parliament science and technology committee did not immediately respond to a request for comment.
Britain's National Cyber Security Council (NCSC), which issued the July report, said it was in "regular dialogue with Huawei about the standards expected of their products."
"As was made clear in July's (report), the NCSC has concerns around a range of technical issues and has set out improvements the company must make," a spokeswoman said in a statement.
"DESTROY OUR BUSINESS"
Western security concerns surrounding Huawei, and fellow Chinese telecoms equipment firm ZTE Corp (0763.HK) (000063.SZ), centre around China's National Intelligence Law. Approved in 2017, the law states that Chinese "organisations and citizens shall, in accordance with the law, support, cooperate with, and collaborate in national intelligence work."
This has sparked fears Huawei could be asked by the Chinese government to incorporate "backdoors" into their equipment that would allow Beijing access, for spying or sabotage purposes. Some experts also see a risk that Chinese intelligence may develop an ability to subvert Huawei's equipment.
Addressing a question from British lawmakers about whether Huawei could be compelled to assist China's government in spying on the UK, Ding said in the letter the company "has never and will never" use its equipment to assist espionage activities.
"Huawei is a closely watched company," he said. "Were Huawei ever to engage in malicious behaviour, it would not go unnoticed - and it would certainly destroy our business."
British authorities stress they have never found any evidence of Chinese state espionage in reviews of Huawei equipment at a special company laboratory overseen by intelligence and industry officials.
July's report identified what it called technical problems which limited security researchers' ability to check internal product codes and concerns about the security of third-party components from a U.S. supplier.
The next British report is expected to be released in coming weeks. People with knowledge of the matter said it will likely further criticise Huawei's slow response and detail tense relations with British officials.
(Reporting by Jack Stubbs; Editing by Elaine Hardcastle and Alexandra Hudson)
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