“This is a perception of the Cold War,” he says quietly, gearing up for a rant. “They’re always thinking people have opposition to the United States. They don’t trust that China will be a peaceful force in the global economy. … We’re a subsidiary company following Canadian law. We’re a subsidiary company following American law. We’re a subsidiary following German, French [laws] – every country! We have more than 140 companies. We’re following local regulations. Just like what people are doing in China. Same. Do you think we would risk a $32-billion company to do this [supply intelligence to China]? That’s worse. I think that would be crazy.”
Mr. Yang has a point of sorts. Huawei is patient, calculating and unquestionably successful: Contract by gritty contract, it has made huge gains against most of its old-world rivals. Mr. Yang himself is an example of the company’s gradual, global rise: He started in rural Chinese markets, rose to work in various post-Soviet ‘stans and was then transferred to Latin America. After a stint in India and at Huawei’s Shenzhen headquarters, he was transferred to the United States, and then to Toronto in 2008.
Former top Canadian Security Intelligence Service officials, as well as the national surveillance and cryptology agency, the Communications Security Establishment, have warned against giving Huawei a foothold in the government and military. But China’s ambassador to Canada has said critics should provide evidence of spying or “shut up.” Mr. Yang, who is soft-spoken but assertive, says U.S. suspicion amounts to “protectionism.”
“If people have these kind of concerns – Cisco, Ericsson, Nokia, Motorola, they all have huge facilities in China,” Mr. Yang says. “If you think Huawei can do some bad things, have you thought about all of that – that Cisco also has risk? Did you test, did you verify the Cisco gear? Do they have intention to do bad things? Does that mean Cisco also has intentions to do bad things to China? I don’t think so.”
Of course, intelligence agencies worry about even the slightest risk. The complexity of telecom equipment means it could take a long time to ensure it has not been compromised, and even then examiners might not be 100 per cent sure, says Cedric Jeannot, founder of I Think Security, a Canadian firm that sells military-grade encryption tools. “If there’s a war, the Western countries don’t know if [Huawei] will keep the independence of the business,” he says. If you’re Ecuador, he adds as an example, you may lack the technology and need to buy it off the shelf from China. If you’re the U.S., he asks, why take the risk – even if it’s a remote one?
Huawei’s success in developing markets also makes a lot of people uneasy. In trips to India and Nigeria, I’ve heard from politicians worried about Huawei’s motives and businessmen frustrated by what they say are underhanded tactics. Most recently, in West Africa, various telecom executives said Huawei was offering potential big-contract customers five years to pay, a tactic few public company rivals could counter (and which Huawei’s local executive dismissed as rumour).
Mr. Yang comes across as more diplomatic than this, and gives me Henry Kissinger’s book On Chin a as if to prove it. In conversation, Mr. Yang praises the ingenuity of Nortel Network’s engineers, which he delighted in hiring after the storied firm’s collapse. Despite the fact that his family, including two boys, remains in China, he has bought a house here in Markham and says he dreams of opening Huawei research and development facilities across the country, from Montreal to Vancouver. This type of Chinese investment in Canada is uncontroversial, but I ask Mr. Yang about other Chinese investment, such as the state-owned China National Offshore Oil Corp. Ltd.’s recent $15-billion bid for Nexen (which was under review when we spoke but has since been approved by Ottawa).