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ZTE
The Chinese technology firm Huawei is facing the heat in Europe as more countries consider a ban on its equipment. Photo: AP Photo COMPANIES
Huawei’s troubles grow in Europe as more countries follow the US in shunning it over security concerns
Germany’s Deutsche Telekom said that it was re-evaluating its procurement strategy after network security concerns from Chinese manufacturers
Belgium’s cybersecurity agency is considering a ban on Huawei after the UK’s MI6 raised concerns on Chinese ownership of these technologies
Associated PressAssociated Press
UPDATED : Sunday, 23 Dec 2018, 10:49PM
61
The US dispute with China over a ban on tech giant Huawei is spilling over to Europe, the company’s biggest foreign market, where some countries are also starting to shun its network systems over data security concerns.
Some European governments and telecom companies are following the US’s lead in questioning whether using Huawei for vital infrastructure for mobile networks could leave them exposed to snooping by the Chinese government.
Bans in Europe could significantly increase the financial pressures on Huawei. They would also cost Europe tens of billions of dollars as the region looks to build up “5G” networks, which are meant to support a vast expansion in internet-connected things, from self-driving cars to factory robots and remote surgery.
“Europe is still divided over Huawei, but the trendline is moving in a fairly clear direction” as the US exerts pressure on allies to block it, said Thorsten Benner, director of the Berlin-based Global Public Policy Institute think tank.
Geopolitical tensions over Huawei intensified after its chief financial officer Sabrina Meng Wanzhou, who is also the daughter of founder Ren Zhengfei, was arrested on December 1 in Canada in connection with US accusations that the company violated restrictions on sales of American technology to Iran.
Huawei chief financial officer Sabrina Meng Wanzhou arrives at a parole office with a security guard in Vancouver, British Columbia, on December 12. Photo: The Canadian Press via AP
Huawei has been blocked in the US since 2012, when a House Intelligence Committee report found it was a security risk and recommended that the government and private companies stop buying its network equipment.
Germany’s Deutsche Telekom said last week it “takes the global discussion about the security of network elements from Chinese manufacturers very seriously”. The company said it uses multiple companies to build its network, including Ericsson, Nokia and Cisco.
Huawei dials up the charm as global pressure builds after arrest of CFO Meng Wanzhou
“Nevertheless, we are currently re-evaluating our procurement strategy,” the company said.
The statement is significant because until recently it had been one of Huawei’s “biggest cheerleaders” based on its cheap and reliable equipment, said Benner.
It came soon after Alex Younger, the director of Britain’s Secret Intelligence Service, or MI6, said in a speech that Britain needs “to decide the extent to which we are going to be comfortable with Chinese ownership of these technologies”, according to local media reports.
Deutsche Telekom is re-evaluating its procurement strategy. Photo: AFP
At about the same time, mobile provider British Telecom said it was removing Huawei equipment from key parts of its current 3G and 4G networks as part of an internal policy not to use it for core infrastructure, which will also apply to 5G networks.
The British government-run centre that tests the company’s equipment and software this summer identified “shortcomings in Huawei’s engineering processes that have exposed new risks” in UK networks. Huawei said it’s working on fixing those issues.
Norway’s telecom ministry said it was considering clarifying requirements from network operators, without being more specific.
Belgium’s cybersecurity agency is reportedly considering a ban on Huawei. And the Czech Republic’s prime minister ordered his government office on Tuesday to stop using Huawei mobile phones, after the national cybersecurity agency warned that products by Huawei and another Chinese telecoms company, ZTE, pose “a security threat”.
The European Union’s head of technology policies, Andrus Ansip, said “we have to be worried” about possible security risks from Huawei when asked about the company’s role in European 5G and driverless car projects.
Huawei, founded in 1987 by a former military engineer, denies accusations it’s controlled by China’s ruling Communist Party or designs equipment to facilitate eavesdropping. It said it recognises and shares security concerns around the roll-out of new 5G networks and is happy to take part in Deutsche Telekom’s review.
British Telecom is removing Huawei equipment from key parts of its current 3G and 4G networks. Photo: Reuters
The company noted German officials have said publicly there is no reason to exclude Huawei and it has never been involved in any confirmed cybersecurity breaches.
“Cybersecurity is incredibly important to Huawei. It is central to every decision and product we make,” said Vincent Pang, the company’s president for western Europe. “We think the answer lies in global cooperation and collaboration to ensure that networks are as secure as possible.”
Chinese Huawei supplier will punish staff for buying Apple iPhone in show of support for troubled tech giant
The Europe, Middle East and Africa market is Huawei’s second biggest after China, accounting for 27 per cent of its nearly US$90 billion revenue last year. Executives said the company has now signed contracts with 25 telecom carriers for commercial or test use of 5G and shipped more than 10,000 5G base stations.
The roll-out of 5G networks is expected to take a decade. As technologies advance, the amount of data flowing between machines is set to surge, prompting governments to increasingly view telecom networks as strategic national assets.
We’re in the realm of fantasy: ‘They’re Chinese. They have links to the Chinese army, thus there are spies, thus we can’t let them touch our telecom equipment’
STEPHANE RICHARD, CEO, ORANGE
Not everyone is endorsing quick action to ban Huawei.
The CEO of the French telecoms company Orange, Stephane Richard, said last week his company would not use Huawei gear for sensitive parts of its network because of “messages of prudence” from French authorities. But he said that was not for any technical reason, and that the debate on Huawei had become politicised.
“We’re in the realm of fantasy: ‘They’re Chinese. They have links to the Chinese army, thus there are spies, thus we can’t let them touch our telecom equipment’,” he said.
Excluding Huawei won’t be easy, analysts said.
“It’s not like there’s some cheaper alternative,” said Paul Triolo, head of geotechnology practice at the Eurasia Group. “Ericsson and Nokia don’t produce the whole spectrum” of equipment, referring to the Scandinavian companies that are the only non-Chinese competitors.
Huawei has thrived in major European markets like Germany and Britain because their telecom industries wanted to ensure there were multiple equipment suppliers to avoid relying on one.
“So if you’re asking them to remove a major vendor from their markets, it’s going to be difficult,” Triolo said.
Why Huawei and its CFO Meng Wanzhou are caught up in the US-China trade war
German companies will not be happy if they cannot use Huawei because their costs will go up and it will delay rolling out 5G networks, which will initially rely on existing 4G infrastructure for which Huawei is already a major supplier, said Benner.
But German decisions are also likely to influence those by smaller countries that are part of the German industrial manufacturing supply chain, such as Poland, Hungary, the Czech Republic and Slovakia.
“They’ll all wake up if Germany takes a decision and worries about the security of its infrastructure,” said Benner.
Associated Press
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Huawei chief financial officer Sabrina Meng Wanzhou. Photo: AP OPINION
Sabrina Meng Wanzhou’s arrest is just a taste of the US-China battle to come
As the Western Five Eyes intelligence services ramp up their war on China’s 5G giants Huawei and ZTE, Asian countries will be forced into unpalatable choices
Cary HuangCary Huang
UPDATED : Sunday, 23 Dec 2018, 9:32AM
The United States and Canada are countries in which there is a clear-cut division of power between the three branches of government – the legislature, the executive, and the judiciary.
They are countries in which the judicial system operates independently from any political interference and where all court cases, including ones with international dimensions, are dealt with in strict compliance with laws and conventions.
Or so legend has it. In fact, the recent incarceration and the subsequent bail hearing of Sabrina Meng Wanzhou, the chief financial officer of Huawei Technologies, makes it seem that politics does play a role in the two countries’ judicial affairs, coming as it does amid a spiralling trade war and escalating tensions between the United States and China.
Meng, the daughter of Huawei founder Ren Zhengfei and the heir apparent of the Chinese telecoms giant, was arrested by Canadian authorities at the request of the American government on suspicion of fraud related to Washington’s sanctions on Iran.
Forget the ‘truce’, the Trump-Xi rivalry is just getting started
Beijing, for certain, sees Meng’s arrest as politically inspired. It has responded with tough political and diplomatic actions, unsurprisingly given Huawei is seen as the pride of China and a symbol of the country’s rise.
China immediately summoned the Canadian and American ambassadors to lodge protests and demanded the release of the Chinese businesswoman.
And in the past two weeks it has detained three Canadians, making no secret of the fact these arrests were acts of retaliation.
“Those who accuse China of detaining some person in retaliation for the arrest of Ms Meng should first reflect on the actions of the Canadian side,” Lu Shaye, Chinese ambassador to Canada, wrote in an opinion piece in The Globe and Mail.
US President Donald Trump’s suggestion he would intervene in the Meng Wanzhou case if it helped achieve a trade deal only underlined the political motivations behind the arrest. Photo: AP
Meanwhile, US President Donald Trump’s statement that he was willing to intervene in the case if it helped achieve “the largest trade deal ever made” only further convinced most people that “hostage diplomacy” was in play.
Indeed, whatever the result of Meng’s case, Beijing has ample reason to believe the US action against her is one of Trump’s tactics to force Chinese concessions in trade talks and undermine China’s ability to compete with the US in the field of technology.
Caught between fighting giants, Asia’s no safe place to be
Since this year, intelligence officers from the Five Eyes partnership – comprising the US, Canada, the UK, Australia and New Zealand – have been investigating the security implications of Chinese involvement in the countries’ domestic 5G technology and networks.
There has been a series of public statements by intelligence chiefs from these countries and a coordinated effort to block Huawei and ZTE from gaining a foothold in these domestic markets. Huawei and ZTE are global leaders in 5G technology.
Thus, it has become apparent that the US is leading a global alliance to stop the Chinese tech giants from supplying equipment for their next-generation wireless networks, citing security grounds.
And this is why China sees in Meng’s arrest a US conspiracy – as described by Ambassador Lu, a “political action in which the United States wields its regime power to witch-hunt a Chinese hi-tech company out of political consideration”.
Huawei’s global headquarters in Shenzhen, China. Photo: AFP
In August, the Trump administration signed a bill banning government use of Huawei and ZTE technology as part of its broader Defence Authorisation Act.
The Five Eyes network is reaching out to other US allies, including Japan, Germany and France, and it is to be expected that more countries will join the US-led alliance against Huawei and ZTE.
This all goes to show how the escalating competition between the US and China on technology and economic matters will have all sorts of unintended consequences for global diplomacy.
As Washington and Beijing do their best to convince their allies across the world to use their respective 5G technology, countries will be forced to take sides. Canada is just one of the first to do so.
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Asian countries, such as India, South Korea, Indonesia, the Philippines, Thailand, Malaysia, and Vietnam – all of which have strong security ties to the US and strong economic ones to China – will be forced to make uncomfortable choices.
This is just the latest example of how economic competition between the world’s two biggest economies is escalating into a greater rivalry in the strategic and security arenas.
It may seem that Meng’s case is just part of the US-China competition for technological supremacy. But it is also part of something deeper: an intensifying rivalry between two spheres of influence that stretches across the world, the likes of which has not been seen since the height of the cold war.
Cary Huang, a senior writer with the South China Morning Post, has been a China affairs columnist since the 1990s
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Meng Wanzhou
A Huawei shop in Beijing. The detention of three Canadian citizens by China came after the arrest of a top Huawei executive in Canada, although Beijing says there is no connection. Photo: Reuters UNITED STATES & CANADA
Arrests of Canadians fuel anxieties among expatriates in China
Fears grow that a legal technicality could lead to a detention
Some Canadians are self-censoring their social media postings and keeping a low profile
Agence France-PresseAgence France-Presse
UPDATED : Sunday, 23 Dec 2018, 11:13PM
29
The arrest of a third Canadian in China has heightened anxiety even in an expatriate community accustomed to some level of fear and uncertainty.
Beijing on Thursday confirmed it arrested Canadian Sarah McIver for “working illegally” in the country, following the detention of two other Canadians on national security grounds.
While Canadian authorities said the latest detention appears to be a routine visa case, it has nonetheless exacerbated concerns among Canadian expatriates in China – fearful that they too might be detained over a legal technicality.
“This is clearly a difficult moment in our relationship with China,” Canadian Foreign Affairs Minister Chrystia Freeland said on Saturday. Photo: AP
“I think most Canadians that are here are living in fear at some level, a fear of losing what they have here, a fear of getting arrested, fear of retribution,” said Ricky Ng-Adam, founder of CoderBunker, a community of international software developers, who regularly travels to Shanghai for work.
“It’s a constant fear,” he said, adding that some of his compatriots self-censor their social media postings and try to keep a low profile.
Former Canadian diplomat Michael Kovrig and China-based business consultant Michael Spavor were detained on December 10 and accused of engaging in activities that “endanger China’s national security”.
Kovrig is a senior adviser at the International Crisis Group think tank, while Spavor facilitates trips to North Korea, including visits by former NBA star Dennis Rodman.
Though no link has officially been made between the three detentions, suspicions are mounting that China is holding at least two of the Canadian nationals in retaliation of Canada’s arrest of Meng Wanzhou, a top executive at Chinese telecom giant Huawei.
I think most Canadians that are here are living in fear at some level, a fear of losing what they have here, a fear of getting arrested, fear of retribution
RICKY NG-ADAM, FOUNDER OF CODERBUNKER
The ambiguity surrounding the arrests has also added to the unease, said Canadian Adrian Wu, who frequently travels to China for both work and leisure.
“Even though the third person arrested is not related to the cases of the first two, people see the headlines and immediately think ‘a Canadian got taken’,” he said.
Ottawa has repeatedly said Meng’s arrest was not political but rather part of a judicial process in keeping with an extradition treaty with Washington.
Meng was released on bail last week in Vancouver pending her US extradition hearing on fraud charges related to sanctions-breaking business dealings with Iran.
Canadian businessman Michael Spavor was one of three Canadians detained by China this month. Photo: EPA-EFE
Ottawa and Washington on Friday stepped up pressure on Beijing and called for the immediate release of Kovrig and Spavor.
“We’ve been discussing it very actively with our allies and partners around the world,” Canadian foreign affairs minister Chrystia Freeland told reporters on Saturday.
“This is clearly a difficult moment in our relationship with China.”
Observers say Canada is increasingly looking like collateral damage in a simmering US-China trade war, with Beijing at the same time working to ease trade tensions with Washington.
“Canada is really just caught in between the US and China, we’re like a scapegoat,” a businesswoman in education said, requesting anonymity for fear of reprisals.
Canada again demands that China release two of its citizens
Like a number of Canadian expats, she is using the holidays as an excuse to stay out of the country.
“At least I can remain in North America to see how the situation will play out from a safe distance”, she said.
Others in the Canadian community, speaking on condition of anonymity, said they are making contingency plans to leave the country “just in case” the situation takes a turn for the worse.
It is now up to China to decide how much they want to escalate the situation, said Hugh Stephens, distinguished fellow at the Asia Pacific Foundation of Canada.
“The Chinese aren’t going to influence the Canadian court system by whatever they do but there could be a lot of collateral damage, which could seriously potentially damage relationships in the long term,” he said.
Former Canadian diplomat Michael Kovrig has been accused by China of engaging in activities that “endanger China’s national security”. Photo: AFP
The fallout from the arrests could have implications beyond the immediate Canadian expat community, including researchers who visit China.
On Thursday, representatives of six Berlin-based institutions, which included the European Council for Foreign Relations and the German Marshall Fund, expressed concern about the spate of Canadians detained.
“Developments such as these increase uncertainty and distrust among foreign scholars who regularly conduct research within China, as they fear for their safety,” the joint statement said.
Canada’s ambassador to China meets with second detained Canadian
Yet some feel there is no need to overreact, calling this “China’s way of dealing with things”.
“I’m not worried about this on a day-to-day basis and I certainly won’t change my daily activities because of a few people who have been detained,” financial analyst Scott Laprise said.
“There’s always a sense at the back of my mind that something could happen, but that’s a part of living in China.”
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