INVESTMENT NOT TIED TO 5G: HUAWEI

OFFERS TO BOOST RESEARCH IN CANADA AND ADD 200 JOBS

Chinese telecommunications company Huawei pledged Thursday to boost investment in research and development in Canada and to add 200 high-paying jobs here amid ongoing concerns over the company’s role in the development of new high-speed 5G wireless networks.

Ottawa is in the midst of a review of national and economic security around 5G technology and has not yet made a decision about whether Huawei, which has operated in Canada for 10 years and partnered with major players including Telus and Bell on their infrastructure, will be permitted to participate.

Dr. Liang Hua, the company’s chairman, told a news conference in Toronto that Huawei’s commitment to R&D in Canada, including a 15 per boost to last year’s $180 million in spending, is not specifically tied to the company’s desire to take part in the development of the 5G network, and won’t change even if Ottawa moves to exclude his company, as the United States and Australia have already done.

“At the end of the day, we hope the decision on 5G can be made on technologies rather than other factors,” Liang said through a translator, later adding that he had “faith” in political leaders “to make smart decisions ... and not let good technology go to waste.”

Liang acknowledged that the relationship between Canada and China is “not ideal” right now, due to the “rare” arrest in Vancouver of Huawei’s chief financial officer Meng Wanzhou in December at the behest of U.S. authorities for allegedly violating sanctions rules.

An attempt is under way to extradite Meng, who is also the daughter of Huawei’s founder, to face a raft of charges in the U.S. including fraud. Authorities there accuse her of participating in a scheme involving a subsidiary to do business with Iran, which would be in violation of U.S sanctions. None of the allegations has been proven.

“I cannot say the U.S. charges against Ms. Meng are not politically driven,” Liang told the media.

“Even the former Canadian ambassador said Ms. Meng has a good defence on the political character of the U.S. extradition request.”

John Mccallum, Canada’s then-ambassador to China, resigned in January, shortly after he told a newspaper it would be “great for Canada” if the U.S. dropped the extradition request against Meng.

Liang said he has been a colleague of the executive for many years. “I believe she is innocent and I hope the Canadian legal system could bring justice back to her,” he told the media Thursday.

“I hope she could be freed and reunite with her family soon.”

Huawei is also facing separate criminal charges in the U.S., over allegedly stealing trade secrets from a U.S. telecom rival.

Liang would not comment on the specifics, saying the company had already issued a statement on the matter. He noted that the allegations have not been proven and said the company prevailed in civil disputes over patents that involved similar issues.

“We went through a number of IP disputes in the U.S.,” he said, adding the firm now holds about 87,000 patents around the world, and has had 11,000 patents filed and approved in the U.S.

In addition to the additional R&D efforts, Huawei also said Thursday that it is revising practices to ensure all intellectual property generated in collaboration with Canadian institutions remains in Canada through shared patent agreements with the universities.

Against the backdrop of Ottawa’s review of Canada’s planned high-speed 5G telecom network upgrade, the U.S. and Australia have moved to exclude Huawei and its equipment from development of their latest wireless networks, with U.S. authorities reportedly warning the telecommunications system could be exposed to cyber-espionage.

But the Guardian newspaper reported this week that cyber-security authorities in the U.K. are expected to advise that such potential security risks could be managed.

Huawei’s chairman said the attention the U.S. is bringing to the company in an attempt to squeeze it out of the development of 5G networks has not been too hard on its reputation, and likened it to a round of free advertising.

“Now the whole world knows us,” he said at the Toronto news conference, which ran well beyond the hour allotted.

Liang said Huawei’s latest R&D commitments are specific to Canada but he insisted more than once that the investments were not made to try to secure participation in developing Canada’s high-speed network.

“We won’t change our approach to R&D investments. We will continue to step up,” he said, adding he is still hopeful there can be smooth relations and a level playing field for all telecom equipment players. “For now, we are aware that some problems need to be solved between the two countries.”

In response to a question about a recently passed law in China that would compel companies to co-operate with intelligence officials in that country, Liang said Huawei has never received such a request and he believes the company would have legal grounds to reject such a request.

He added that, as an equipment maker, Huawei doesn’t have access to consumer data, and said Chinese law does not grant the government authority to compel telecom companies to install “backdoors,” the term for secret passages that provide access to a computer or device.