China warns Canada to free Huawei suspect
CHINA yesterday warned Canada that there would be severe consequences if it did not immediately release Huawei’s chief financial officer, calling the case “extremely nasty”.
Meng Wanzhou, the tech giant’s global chief financial officer, was arrested in Canada on December 1 and faces extradition to the US, which alleges that she covered up her company’s links to a firm that tried to sell equipment to Iran despite US sanctions. Meng is the daughter of the founder of Huawei.
If extradited to the US, she would face charges of conspiracy to defraud multiple financial institutions, with a maximum sentence of 30 years for each charge.
No decision was reached at the extradition hearing after nearly six hours of argument and counter-argument, and the hearing was adjourned until tomorrow.
In a short statement, China’s foreign ministry said vice foreign minister Le Yucheng had issued the warning to release Meng to Canada’s ambassador in Beijing, after summoning him to lodge a “strong protest”.
Canada’s arrest of Meng at the request of the US while she was changing plane in Vancouver was a serious breach of her lawful rights, Le said. The move “ignored the law, was unreasonable” and was in its very nature “extremely nasty”, he added.
“China strongly urges the Canadian side to immediately release the detained person, and earnestly protect their lawful, legitimate rights, otherwise Canada must accept full responsibility for the serious consequences caused.”
Meng’s arrest came on the same day that Donald Trump met with China’s Xi Jinping in Argentina to look for ways to resolve an escalating trade war between the world’s two largest economies. The news of her arrest caused chaos on stock markets over trade fears.
A Huawei spokesman said the company had “every confidence that the Canadian and US legal systems will reach the right conclusion”. The company has said it complies with all applicable export control and sanctions laws and other regulations.
DOES the arrest of senior Huawei executive Meng Wanzhou mean we should start worrying about using that company’s networks? This is what the US wants us to believe. But we might be cautious about following its guidance.
For a few years, American intelligence and political figures have been waging a war against the Chinese company, banning its equipment and telling operators they’d better not offer the smartphones for sale.
The reason, they say, is that Huawei has close links to Chinese authorities. And as the US seems to be in some degree of constant cyber-war with China these days, it has decreed that some Chinese companies can’t be used. Huawei comes in for particular intention because it’s such a big player in communications network infrastructure. It now has 28pc of the world’s networking market, overtaking Ericsson and Nokia to become the biggest player.
This means it is to the fore in the new generations of 5G mobile networks and core broadband infrastructure.
For example, Eir is currently planning to invest €150m in a 5G mobile network upgrade that’s based on Huawei kit. Vodafone and the ESB, through their nationwide Siro fibre broadband venture, build their key infrastructure using Huawei. BT Ireland uses it too.
What US authorities claim is that using infrastructure on this scale opens up the possibility of manipulation, even if unintentional, by the Chinese government.
And they’re really starting to put the boot in.
Last year, Huawei was humiliated when the main US mobile operators pulled out of arrangements to sell Huawei phones after US authorities advised them to do so.
This destroyed any chance of Huawei making an impact on the US market, the most important after China and the EU. It was a big deal because Huawei is now the world’s second biggest smartphone seller, recently creeping ahead of Apple to trail only Samsung.
Despite the American snub, Huawei has still managed to get into the global top three when it comes to phone sales. This is partially down to the handsets themselves: Huawei has thrown the kitchen sink at design and research. Its most recently announced smartphone, the Mate 20 Pro, has three cameras on its back side. Technically, few other phones can match it.
And Huawei can also do relatively nicely without the US, which only has 5pc of the world’s population.
But if you’re a Huawei executive, you’ve got to be nervous. There are signs that the reticence of US operators is now slowly spreading beyond American shores.
Last week, Britain’s biggest telecoms operator was reported to be scaling back its use of Huawei equipment for security reasons. British Telecom will now move Huawei kit away from “core” network functions in rolling out 5G infrastructure, the Financial Times reported.
Is this a strategic decision from a big British company that is only limited to mobile networks? Or is it a general seachange in policy?
Here, BT Ireland uses Huawei as its “core” high-speed network between Dublin and Belfast. It recently bragged about increasing the speed and power of its underlying telecoms infrastructure between London and Dublin using Huawei’s technology.
But those investment decisions were taken a few years ago, before tension around Huawei’s ascent rose.
Last week, matters escalated further when Meng Wanzhou, the daughter of Huawei’s founder, was arrested and detained by police in Canada. The Canadians were acting on a US extradition warrant. The apparent grounds for detention relate to contravening trade sanctions against Iran, which the Trump administration is pursuing almost single-handedly.
The Chinese government is outraged by the detention, interpreting it as a direct assault on Chinese interests. Huawei itself is just as incensed.
But beyond the current drama, is there anything to fears that Huawei may be some sort of listening post for the Chinese government?
There hasn’t much by way of overt evidence that Chinese companies such as Huawei are doing this. Sure, US security agencies warn against using Chinese infrastructure firms. But it’s equally plausible to speculate that these objections are part of an overall US strategy to hurt Chinese industrial expansion in a general way.
There’s also more than a dose of irony in the American accusations. Does anyone really believe that US agencies don’t penetrate our communications on a daily basis, picking up information about us at will?
“But they’re the good guys, they’re just doing that to protect us,” I can hear people saying.
Maybe. But perhaps it’s because American agencies monitor us so completely that they, more than others, are acutely aware of the potential for rivals to do likewise.
So will Ireland follow the example of the US, which has already persuaded Australia and New Zealand to ban Huawei?
Not in the short term. Ireland has a deepening involvement with Huawei. The Chinese company has set up research and development centres here with almost 200 people. Senior Chinese executives from the company have been entertained by government ministers, the head of the IDA, the provost of Trinity College and several other influential figures in Ireland’s establishment. (To be fair, this is hardly unique — hundreds, maybe thousands, of other company executives could boast the same level of access.)
Ireland generally has a loyal attitude to companies that invest in the country. So it would be surprising if we suddenly get anxious about a company just because some other country has its suspicions.