Espionage and telecoms: the West at war with China

 

Officially, it is for violating the US embargo against Iran that Meng Wanzhou, 46, chief financial officer of Chinese telecoms giant Huawei and daughter of group founder Ren Zhengfei, was arrested on Saturday, December 1st. The United States issued an arrest warrant against Meng on August 22nd.
In fact, this arrest occurred in a third country (Vancouver, Canada) and while a few thousand miles away, Donald Trump and his American counterpart, were tasting a steak, in a reunion on the sidelines of the G20 supposed to end to their trade war, is a new testimony of Washington’s unilateralism in world politics, commerce and finance. Canadian officials said they had no choice but to arrest because of an extradition agreement with the United States.
What is wrong with Meng Wanzhou

The daughter of the group’s founder is believed to have lied to several banks about the links between Huawei and one of its subsidiaries, SkyCom, which would have allowed this company to access the Iranian market in violation of US sanctions.
The CEO was a member of SkyCom’s board of directors a decade ago. Since the company was sold. Only the US justice believes that the Chinese group has kept control, the employees of SkyCom for example continued to use huawei.com email addresses.
Today, the 46-year-old leader is facing a big risk. She is charged with « conspiracy to defraud several financial institutions, » charges that are 30 years in prison in the United States. The lawyer representing the Canadian government opposed the release of the daughter of Ren Zhengfei, founder of Huawei in 1987 and former member of the Chinese army. He felt that she had good reason to be tempted to flee Canada and return to China.
The hearing before a judge of the Supreme Court of Vancouver was adjourned this Friday after several hours of debate, and must resume this Monday. The judge should then decide on a possible bail of Meng Wanzhou.
The Chinese leader’s lawyer, for her part, assured her that her client would not take the risk of « shaming » her father, her company and her country by running away. It would also undertake to return its passports, to wear an electronic bracelet and to finance its own surveillance during the procedure.

The West and the temptation of monopoly
The setbacks of the Chinese group in the United States are not new. US intelligence agencies accuse Huawei of being tied to the Chinese government and claim that the equipment it sells could contain « back doors » used by the communist regime’s secret services to gain access to the sold systems. No evidence has been publicly produced and the company has repeatedly denied these allegations. Huawei products are used by telephone operators around the world, including Europe, Africa and Canada. But the group has been banned from US infrastructure projects because of these espionage fears for Beijing.
For Gregori Volokhine, the president of Meeschaert Financial Services, this case is not only about the issue of trade war, but of technological warfare. « Recently, New Zealand, Australia or British Telecom have banned Huawei for the equipment of their network. This is no longer economic protectionism but really to prevent China not only to catch up with the West but to overcome it in the technological field, « he told the Reuters news agency.
« Investors are now worried that trade tensions will go beyond the mere sphere of tariffs to move towards a more broadly economic and diplomatic conflict, with negative implications for global economic growth, » says Chris Beauchamp, chief market analyst at IG London. In this type of environment, equities appear overvalued, so we will have to expect the losses to get worse.  »

Ren Zhengfei, a state agent?

Ren Zhengfei, a former Chinese army engineer, founded Huawei in 1987 with an initial capital of a few thousand dollars. At 74, he remains president of the group, now ranked 72nd in Fortune’s 500 top global companies, with annual sales of nearly 80 billion euros.
The group has become one of the world’s leading suppliers of telecommunications network equipment, raising suspicions from the United States and other countries who are alarmed at its possible links with Beijing.
Huawei, which is not publicly traded, waited until 2011 to unveil its list of leaders – revealing that Ms. Meng was the CFO.
Spying, an old story
Chinese technology companies are often accused of espionage by US and European governments for the benefit of the Chinese government. « We are deeply concerned about the risks associated with the insertion into our telecommunications network of a company or entity owned by a foreign government that does not share our values, » said Chris Wray – FBI director – before the permanent United States Senate dedicated to the surveillance of the American intelligence community. « This opens the door to opportunities for pressure or control over our telecommunications infrastructure. This state of affairs would allow third parties to modify or extirpate information furtively, « he added.
The FBI director shared the words of the CIA, NSA and other US intelligence agencies with Huawei and ZTE, China-based equipment manufacturers. In fact, for years now, these have been in the line of fire of the American authorities; they are suspected of collusion with the Communist Party and espionage on behalf of the Chinese government.
The European Union followed suit in the USA. « Should we be wary of Huawei or other Chinese companies? Yes, I think we need to be wary of these companies, « said Andrus Ansip, European Commissioner for Technology, at a press conference in Brussels. Ansip said it was concerned that Chinese technology companies were required to cooperate with Chinese intelligence services, including through backdoors to allow access to encrypted data. Ansip also said that these Chinese companies were producing microchips that would be used to spy on other companies.
We remember a recent case where China infiltrated Apple and other US companies using « spy » microchips inserted on server motherboards. According to a report released by Bloomberg on Oct. 4, US server motherboard specialist Supermicro is reported to have been compromised in China, where government-affiliated groups have infiltrated its supply chain to insert tiny chips of comparable size. to a grain of rice or a pencil, on motherboards that ended up in servers deployed in the United States. Such remarks were quickly challenged by the US companies concerned. Apple said it opened an internal investigation that revealed no microchip spies in its motherboards. The US giant says it has never « found malicious chips, hardware manipulations, or vulnerabilities created intentionally on a server. » She also denied knowing of any FBI investigation into this case.
« No government has ever asked Huawei to introduce back doors or compromise networks, and we would never have tolerated such behavior on the part of our staff, » the company said in a statement. Huawei denied these allegations and said Ansip’s comments are mere misunderstandings.

LEAVE A REPLY

Please enter your comment!
Please enter your name here