Espionage and security concerns: Huawei in the heart of CCP’s overseas strategy

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The arrest of Huawei’s Vice-chairperson and CFO Meng Wanzhou has made headlines in recent days as she is the daughter of the world’s seventh-largest information technology company by revenue.

Ren Zhengfei, a former deputy director of the People’s Liberation Army (PLA) engineering corp, founded Huawei in 1987 in Shenzhen. Rather than relying on joint ventures to secure technology transfers from foreign companies, Ren sought to reverse engineer foreign technologies with local researchers.

In 1993, Huawei gained a key contract to build the first national telecommunications network for the PLA. In 1994, Ren had a meeting with President Jiang Zemin, who agreed to his idea that “switching equipment technology was related to national security, and that a nation that did not have its own switching equipment was like one that lacked its own military.” Ever since Jiang’s time, Huawei has been part of CCP’s global strategies.

Huawei is now the world’s largest telecom equipment maker and China’s largest telephone-network equipment maker. Huawei has aimed to help President Xi Jinping to achieve his China Dream with their technologies by creating a Digital China.

Huawei has been described as “perhaps China’s most globally successful company”. “Our sights must be on goals and dreams 20 or 30 years into the future, and we must have the courage to lead the world forward.”Ren said last year on a trip to Ireland.

Since 1997, Huawei has expanded aggressively in foreign countries, although it denied using Chinese government subsidies to gain global market share after being accused by US lawmakers and EU officials of unfair competition at best.

In February 2003 Cisco Systems sued Huawei Technologies for allegedly infringing on its patents and illegally copying source code used in its routers and switches.

In June 2004, a Huawei employee was caught after hours of diagramming and photographing circuit boards from a competitor booth at the SuperComm trade show.

In September 2014, Huawei faced a lawsuit from T-Mobile, which alleged that Huawei stole technology from its Bellevue headquarters in Washington.

In the US, officials and politicians within the federal government have raised concerns that Huawei-made telecommunications equipment may be designed to allow unauthorized access by the Chinese government and the PLA.

In October 2011, The Wall Street Journal reported that Huawei had become Iran’s leading provider of telecommunications equipment, including monitoring technologies that could be used for surveillance.

On 25 October 2012, Reuters reported that an Iranian-based seller of Huawei (Soda Gostar Persian Vista) last year tried to sell embargoed American antenna equipment (made by American company Andrew LLC) to an Iranian firm (MTN Irancell).

In March 2012, Australian media reported that the Australian government had excluded Huawei from tendering for contracts with NBN, following advice from the Australian Security Intelligence Organisation regarding security concerns.

On 19 July 2013, Michael Hayden, former head of U.S. National Security Agency and director of Motorola Solutions, claimed that he has seen hard evidence of backdoors in Huawei’s networking equipment and that the company engaged in espionage and shared intimate knowledge of the foreign telecommunications systems with the Chinese government.

In 2014 The New York Times reported, based upon documents leaked by Edward Snowden, that the U.S. National Security Agency has since 2007 been operating a covert program against Huawei. This involved breaking into Huawei’s internal networks, including headquarter networks and founder Ren Zhengfei’s communications.

In 2015, German cybersecurity company G Data reported that it had found that malware that can listen to calls, track users, and make online purchases was found pre-installed on smartphones from Chinese companies including Lenovo, Xiaomi, and Huawei.

On February 14, 2018, heads of six U.S. intelligence agencies testified to the Senate Select Committee on Intelligence against the use of Chinese telecom products by U.S. citizens, such as those of Huawei and ZTE. Christopher A. Wray, director of the FBI, stated that they were “deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don’t share our values to gain positions of power inside our telecommunications networks”.

Three members of the Five Eyes international intelligence alliance—Australia, New Zealand and the US—have declared the use of Huawei telecommunications equipment, particularly in 5G networks, poses “significant security risks”, while Canada is carrying out its own security review; only Britain is permitting the company to participate in the rollout of the new technology.

In November 2018, “The heads of six major US intelligence agencies have warned that American citizens shouldn’t use products and services made by Chinese tech giants Huawei and ZTE. According to a report from CNBC, the intelligence chiefs made the recommendation during a Senate Intelligence Committee hearing. The group included the heads of the FBI, the CIA, the NSA, and the director of national intelligence.

“During his testimony, FBI Director Chris Wray said the government was ‘deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don’t share our values to gain positions of power inside our telecommunications networks.’ He added that this would provide ‘the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage.'”

In April 2018, it was reported that the U.S. Justice Department had joined the U.S. Treasury Department’s Office of Foreign Assets Control, or OFAC, and the Department of Commerce, to investigate possible violations of economic sanctions by Huawei for its provision of equipment in Iran, North Korea, Syria, and Venezuela.

Officially, Huawei is an employee-owned company, a fact the company emphasizes to distance itself from allegations of government control. Huawei, however, is quite complex—so much so that according to Chinese media Caixin, “even longtime employees admit the system is nearly impossible to understand.”

Ren joined the Communist Party of China in 1978. He was elected member of the 12th National Congress of the Communist Party of China. Ren’s ex-wife was the daughter of a Communist politician who served at one time as deputy Governor of Sichuan Province.

His daughter Meng Wanzhou adopted her mother’s surname as a teenager when her parents divorced.

On 1 December 2018, while transferring planes at Vancouver International Airport, Meng was arrested by Canadian authorities at the request of the United States. The US has sought her extradition from Canada.

Meng’s arrest occurred on the same day the US President Donald Trump and Chinese President Xi Jinping agreed to a three-month truce in the trade war between the two countries at the G20 Buenos Aires summit, but was not announced until four days later.

Canada’s Prime Minister Justin Trudeau told the news media yesterday that the federal government was aware of the intended arrest but had no involvement in the process.

The United States is claiming that Ms Meng covered up violations of sanctions on Iran, according to Canadian prosecutors on Friday.

According to CNN, Meng is believed to have helped Huawei circumvent US sanctions by telling financial institutions that a Huawei subsidiary was a separate company, prosecutors said at a hearing Friday to determine whether Meng should be released on bail.

Her lawyer said that she has ties to Canada and is not a flight risk. The judge, after hearing arguments from Meng’s lawyer and prosecutors, did not rule on bail. The hearing will resume Monday at 1 p.m. ET.

Even with Meng’s arrest and more trouble for months to come, Huawei will still be a global leader in telecoms with a great range of products including mobile phones, tablets, wearables, broadband devices and home devices. The name Huawei may be translated as “splendid act” or “China is able”; The company had considered changing the name in English as it was concerned that non-Chinese may find the name hard to pronounce.

Ren has once said, “Huawei’s corporate culture is not something specific. It is not a mathematical formula or equation either, because it has no boundaries. ”

By Cloudy Seagail and staff writer

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