- Huawei plans to move research to Canada, build new factories in Europe and find new ways to make its 5G equipment without a U.S. market where it is persona non grata, the Chinese telecom giant’s founder, Ren Zhengfei, told The Globe and Mail. Mr. Ren contrasted his company’s fate in the United States, where it is charged with fraud and lawmakers have blocked access to Huawei technology.
- Mr. Ren’s remarks come just after the one-year anniversary of his daughter’s arrest in Canada on behalf of U.S. prosecutors who want her extradited. Meng Wanzhou is free on bail in the Vancouver area, but with limited freedom of movement from her $13-million Vancouver mansion. Ms. Meng wrote in a chat-app post on Sunday that she has gotten used to these restrictions: “Over the past year, I have also learned to face up to and accept my situation. I’m no longer afraid of the unknown.”
- This past weekend, The Globe published new revelations about the hours preceding Ms. Meng’s arrest at Vancouver’s airport on Dec. 1, 2018. Sources granted anonymity said that, as top officials in the Trump White House orchestrated the arrest with Canadian law enforcement, Prime Minister Justin Trudeau and U.S. President Donald Trump were left out of the loop until soon before Ms. Meng was in custody.
What is Huawei?
Huawei Technologies Co. Ltd. is a Chinese telecommunications company founded in 1987 by Ren Zhengfei. Based in Shenzhen, it has 180,000 employees and creates such products as smartphones, tablet computers, mobile and fixed broadband networks. Its products account for a sizeable chunk of the global smartphone market.
While its market share in Canada – where it has operated since 2008 – is still small, its presence here has grown dramatically over the years. Here’s a deeper look by The Globe and Mail’s Susan Krashinsky Robertson and Joe Castaldo at how Huawei built its brand in this country.
What is Canada’s connection?
A Globe and Mail investigation published last spring revealed Huawei has established a vast network of relationships with Canadian universities to create a steady pipeline of intellectual property to aid in the development of next-generation 5G mobile networks. Around the same time, members of the Five Eyes intelligence-sharing alliance were warning Prime Minister Justin Trudeau about the national security risks posed by Huawei’s technology.
Following The Globe’s report, Mr. Trudeau was urged to gather security agencies and top policy makers to determine the security threat and economic cost of transferring Canadian intellectual property to Huawei. Since then, other critics have added their voices to those expressing concern, including U.S. lawmakers and senators. In September, the government launched a national-security analysis to minimize cyber threats to the country from equipment made by foreign telecommunications companies, including Huawei.
But the federal government eventually backed away from previous assurances that Canadian security agencies were capable of containing any cyberespionage threat and said it is not ruling out barring Huawei from supplying equipment for Canada’s 5G mobile networks. Canadian telcos BCE and Telus are hoping that Huawei’s entry into the 5G market will go ahead so they can use their technology on their own networks.
What are the concerns with Huawei’s 5G technology?
Huawei has been working on advanced security technology together with the Public Security Bureau in China’s far western Xinjiang region, which is becoming a pilot zone for advanced new surveillance and population-control techniques. Chinese authorities have spent heavily to build Xinjiang into a test bed for the use of facial recognition, digital monitoring and artificial intelligence in policing.
Chinese law requires companies in China to “support, co-operate with and collaborate in national intelligence work” as requested by Beijing. Researchers worry about how technologies developed for authoritarian purposes in China could be brought into other countries under different guises, while U.S. spymasters say Huawei’s equipment could be used to conduct undetected espionage through wireless networks, especially with the next generation of 5G technology. The United States and Australia have barred Huawei 5G telecommunications.
Who is Meng Wanzhou?
Meng Wanzhou, 47, is the chief financial officer of the company founded by her father, Mr. Ren. Her rise to success has been as meteoric as Huawei’s; she was a high-school dropout in 1993 when she started there as a secretary, but now she is its chief financial officer. She is also effectively the global face of the company, appearing on panels with titans of industry and travelling around the world to bolster Huawei’s image amid concerns about its technology.
On Dec. 1, 2018, Ms. Meng was arrested in British Columbia by Canadian authorities acting behalf of U.S. investigators. They accuse her of fraud in a scheme to violate American trade sanctions against Iran, which she denies. She’s also suing the RCMP and Canadian Border Service Agency for what she says were violations of her constitutional rights during her arrest.
She is currently free on $10-million bail in British Columbia, kept under 24/7 surveillance and ordered to stay in the Vancouver area. A Superior Court judge will hear her extradition hearing in January. Ultimately, the decision about extradition lies with David Lametti, the federal Justice Minister.
How do Iran sanctions factor in?
Since at least 2016, U.S. authorities have been reviewing Huawei’s alleged shipping of U.S.-origin products to Iran and other countries in violation of American export and sanctions laws. Those sanctions are at the heart of the case against Ms. Meng: U.S. prosecutors allege that Huawei was accessing Iran through a Hong Kong company called Skycom, which the prosecutors consider to be a subsidiary of Huawei. The U.S. Justice Department’s full indictment allege that Ms. Meng committed fraud in 2013 by telling financial institutions that they were separate entities, and that Huawei and its subsidiaries committed obstruction of justice and money laundering to hide their activities. Ms. Meng denies this: In B.C. court, her lawyers have argued that while Huawei did own Skycom between 2008 and 2009, it divested from it.
Canadians detained in China
Only days after Ms. Meng’s arrest, and after Beijing threatened “serious consequences” if Ms. Meng was not released, two Canadians were detained in China in apparent retaliation. China’s foreign ministry says both men – former Canadian diplomat Michael Kovrig and entrepreneur Michael Spavor – are being held on suspicion of endangering national security. China later alleged that Mr. Kovrig had worked to steal state secrets, in part with information Mr. Spavor gave him. The men are now in a detention centre, where sources say they are still routinely interrogated, kept in rooms with the lights on 24/7 and barred from seeing family or lawyers, though consular officials have been allowed to visit them every month.
Other Canadians have been detained or tried in China since Ms. Meng’s arrest. While their cases are not directly connected to hers, the tensions between Beijing and Ottawa have inflamed political rhetoric surrounding questions of Chinese justice. On Jan. 14, for instance, a Chinese court sentenced Canadian Robert Schellenberg, 36, to death after finding him guilty of drug trafficking. Mr. Trudeau openly criticized China for “arbitrarily” applying capital punishment, and China’s foreign ministry replied by telling him to “stop making such irresponsible remarks.”
U.S. vs. China, and Canada in the middle
Canadians have grown accustomed to a warm reception in China, which still lionizes Norman Bethune, the Ontario-born doctor who helped Mao Zedong’s Communists in the 1930s. But the arrest of Ms. Meng has infuriated China and sown fear among Canadians living in the country that, after Mr. Kovrig and Mr. Spavor’s detention, they might be next.
Initially, China faulted both Canada and the United States for Ms. Meng’s arrest, but later its foreign ministry and state press focused their attention on Canada specifically. That has called into question Canada’s stated goal of pursuing a trade deal with China. As for the Americans, their relationship with Beijing has been rocky recently because of U.S. President Donald Trump’s trade policies targeting Chinese businesses. After months of escalating retaliatory tariffs, the two countries reached a fragile truce last December, but tensions rose again when the U.S. Commerce Department blocked U.S. companies from doing business with Huawei. Canada has said it will not be rushed into following suit.
Another political casualty of the Meng case is John McCallum, Canada’s ambassador to China, who told Chinese-language media on Jan. 22 that she had compelling arguments to avoid extradition, given Mr. Trump’s remarks on the case. He was widely condemned by ex-diplomats and opposition parties for undermining Canada’s position, and four days after making those remarks, the Prime Minister fired him. The position was left vacant for months before Dominic Barton, a consultant with McKinsey & Company, was chosen for the job.
Compiled by Globe staff
With reports from Robert Fife, Nathan VanderKlippe, Steven Chase, Sean Silcoff and Christine Dobby