Thursday, June 22, 2017

U.S. criticizes Ottawa's oversight of Chinese high-tech takeovers



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U.S. criticizes Ottawa's oversight of Chinese high-tech takeovers


The head of the House Armed Services Committee in Washington is urging Ottawa to be “more vigilant” in its national-security process when Chinese investors want to buy Canadian high-tech firms that specialize in sophisticated military hardware.
Representative Mac Thornberry was responding to The Globe and Mail reports on a bid by Hytera Communications Corp. of Shenzhen, China, to take over Vancouver-based Norsat International Inc., which sells satellite technology to the U.S. military and NATO. The government approved the sale without a formal national security review.
Mr. Thornberry, chair of the House of Representatives committee, warned that China is taking advantage of weaknesses in Western oversight of foreign investment to buy cutting-edge technology that may help its military.
“I have growing concern that countries like China are investing in various projects, exploiting the seams of regulatory structures, and using other methods to obtain key defence technologies,” Mr. Thornberry said in a statement to The Globe when asked to comment.
“The public and private sectors of the U.S. and key friends and allies must be more vigilant and must take steps to prevent this sort of exploitation,” he added.
Representative Walter Jones, who also is on the committee, joined in the criticism and called for the U.S. military to review its contracts and relationships with Norsat.
“The United States cannot stop Canada from allowing the Chinese takeover of Norsat,” Mr. Jones told The Globe.
“We can and should, however, re-evaluate any business dealing that potentially affects our defence initiatives.” This is the second warning from the U.S. capital that Ottawa is taking a laissez-faire approach to investment from China and jeopardizing U.S. national security interests.
Last week, a key member of a U.S. congressional watchdog agency urged the U.S. Defence department to “immediately review” its business arrangements with Norsat.
In early June, the Trudeau cabinet approved the sale of Norsat to Hytera, a Chinese telecom giant that has been accused of stealing U.S. technology.
Hytera is facing a lawsuit from U.S. rival Motorola, which accuses the firm of massive intellectual property theft.
Michael Wessel, a member of the U.S.-China Economic and Security Review Commission, which reports to Congress, said “the sale of Norsat to a Chinese entity raises significant national-security concerns for the United States as the company is a supplier to our military.”
He said the Liberals appear willing to sacrifice national-security interests of Canada’s most important ally in exchange for a bilateral free-trade deal with China.
Two former directors of the Canadian Security Intelligence Service – Richard Fadden and Ward Elcock – have said the transaction should have been subjected to a full-scale security review.
The office of Innovation, Science and Economic Development Minister Navdeep Bains is refusing to say whether Canada will subject the Hytera deal to further scrutiny. His director of communications, Pauline Tam, and his press secretary, Karl Sasseville, did not respond to repeated requests from The Globe to say whether Ottawa will re-examine the deal.
Norsat is the second case in a matter of months in which the Liberals have approved a controversial sale of sensitive technology to Chinese investors. In March, the government approved the sale of a Montreal high-tech firm, ITF Technologies Inc., to O-Net Communications of Hong Kong, a firm partly owned by Beijing.
The former Conservative government had blocked the deal on the grounds that it would undermine Western armed forces’ technological edge over China. At the time, security officials had recommended against the takeover, saying the ITF technology transfer would give China access to advanced military laser technology and would diminish “Canadian and allied military advantages.”
Prime Minister Justin Trudeau has defended the Liberals’ decision to forgo a national security review in the Norsat sale, saying Canada consulted Washington before concluding Hytera’s takeover would not pose any national security risks.
Mr. Trudeau has refused to answer repeated questions in Parliament on who the government talked to in the Trump administration, and whether they expressed any concerns. The U.S. embassy in Ottawa has refused to comment on whether Washington was consulted and whether it raised any national security issues.
Security experts fear China’s private-sector companies are subject to influence from Beijing.
The Chinese Embassy in Ottawa said the purchase is a normal business transaction and should not become politicized.
“From Canadian media’s relative reports, in these commercial merger cases China is often regarded as an enemy that jeopardizes Canada’s national security,” spokesman Yundong Yang said in a statement. “Absurd thoughts like this totally go against the mutually beneficial co-operation between China and Canada.”
Hytera‘s bid to buy Norsat triggered a requirement under the Investment Canada Act that Ottawa to examine foreign-owned firms’ attempts to take over Canadian companies for national security concerns.
Earlier this month, Norsat officials said they were told a preliminary review determined a full national security review was not needed, paving the way for the takeover.
The purchase was delayed when a U.S. hedge fund made an unsolicited offer last week, which Norsat rejected.
The Vancouver company entered into a definitive agreement on Tuesday to be bought by Hytera for $70.6-million (U.S.) after it turned down a $67.3-million bid from Privet Fund Management.
Privet said it was surprised by Norsat’s decision, given the security concerns raised in the U.S. capital and in Parliament by the opposition parties.
“We find it incredible that the Norsat board believes an identical offer from Hytera represents the best interests of all stakeholders in light of the mounting political scrutiny and regulatory uncertainty surrounding a transaction with Hytera,” said Ryan Levenson, managing member of Privet.
The Liberals have made closer ties to China – including a potential free-trade deal – a cornerstone of their government’s foreign policy. China has publicly deplored Canada’s national security reviews as protectionism and demanded the process be on the table in free-trade talks.
Since the Liberals came to power, they have been more open than the previous government to investment from China in a number of key sectors.
In February, Ottawa approved the sale of one of British Columbia’s biggest retirement-home chains to Beijing-based Anbang Insurance Group, which has a murky ownership structure, in a deal that gave China a foothold in Canada’s health-care sector. Last week, Chinese security authorities arrested Anbang chair Wu Xiaohui.
Michael Byers, Canada Research Chair in Global Politics and International Law at the University of British Columbia, said the Norsat purchase should proceed to a full review.
“A review by CSIS would have warned that investments by the same Chinese company have raised security concerns in other countries,” Dr. Byers said. “In Britain, Hytera’s takeover of a mobile digital-radio equipment maker was only approved after strict security protections were imposed.”
He said the former Harper government added the national security review process to the Investment Canada Act “precisely to avoid ad hoc approaches of the kind the minister took here.”

New Documentary Highlights the Hidden Price of Making an iPhone

New Documentary Highlights
the Hidden Price of Making an iPhone

NEW YORK—Like millions of young men and women in rural China, Yi Yeting journeyed to a coastal city for a better job prospect. In Shenzhen, a southeastern metropolis bordering Hong Kong, Yi found employment with a large state-owned manufacturing company.
Two years into his job, doctors told Yi, then only 24, that he had leukemia, the result of extended exposure to benzene, a sweet-smelling toxic chemical that is strictly regulated in the United States and other developed countries. In China, Yi had to breathe it in every day.
I still get tears when I watch the film.
— Heather White, director
Yi and other Chinese victims of global supply chains for products ranging from cargo containers to Apple’s iPhones are the focus of “Complicit,” a new documentary by directors Heather White and Lynn Zhang. Besides featuring testimonies from dozens of victims as well as Chinese and overseas media reports, the film also used footage shot by undercover activists.
“Complicit” premiered in the United States during the Human Rights Watch Film Festival to a packed theater at Lincoln Center on June 12. The film’s opening scene, the haunting funeral of a young factory worker, reminded some in the audience that they too played a part in the tragedy being highlighted.
Funeral procession
The funeral procession of a young factory worker, Yi Long. (Courtesy of Human Rights Watch)
“I felt guilty after watching the film, having a phone in my bag,” said Jhoe Garay, who attended the premiere. “I didn’t know anything about the people dying because of phones or iPads.”
As the film highlights, 90 percent of the world’s consumer electronics are produced in China. Many of the factories like Foxconn, the world’s largest contract electronics manufacturer and Apple supplier, employ migrant workers who leave their hometowns in search for higher-paying work. Official statistics counted over 280 million migrant workers in 2016, many of whom were teenagers.
Hungry for more profits, Chinese contractors to global brands force workers to use toxic chemical solvents like benzene and n-hexane because they are cheaper or more efficient than their safer alternatives.
This unethical manufacturing practice has led to many tragic stories, some of which are documented in “Complicit.”
In 2009, Ming Kunpeng contracted leukemia after two years of wiping electronic component parts with benzene in a factory then owned by the Dutch company ASM International. A spokesman for ASM denied that Ming was exposed to benzene, but the company did eventually offer a one-time settlement to Ming’s family after their protracted lobbying.
Ming’s health deteriorated, and not wanting to burden his family with high medical costs, he committed suicide by jumping from the roof of the hospital where he was receiving treatment. He was 27.
Tragedy sometimes brings out true inspiration, as the film shows with the case of Yi Yeting, the migrant worker in Shenzhen.
Despite battling leukemia and mounting health expenses since 2005, Yi has found time to volunteer with a Hong Kong-based NGO to help dozens of victims of occupational diseases or work-related injuries demand compensation and workplace reform from companies like Foxconn.
“I still get tears when I watch the film because I feel connected to those individuals,” said director Heather White in an interview. White, who formerly headed a watchdog NGO, has spent her entire career in China investigating labor violations in factories.
Making this film was “an incredible, personal journey” she said.
The screening was followed by a panel discussion with White and Todd Larsen, the executive co-director of Green America, which promotes environmentally sustainable consumer and corporate practices.
The panel noted that while electronics manufacturers across the globe violate workplace practices, entrenched government malfeasance and corporate abuses have exacerbated the situation in China. There, the authorities accept bribes from factories to suppress activists and squash NGOs instead of cracking down on malpractice.
Because of his activism, Yi Yeting was put under surveillance, evicted from his apartment, and blocked from exiting the country. Although he managed to attend the recent European premiere of “Complicit” in Geneva, he was questioned for hours by the Chinese authorities about his whereabouts upon his return.
Yi can be considered fortunate. A worker who was supposed to be featured in the documentary disappeared on his way to work. Previously, he had been organizing other workers in a neighborhood near a Foxconn factory where a cluster of leukemia victims was discovered.
“We just never heard from him again,” Heather White said during the panel discussion. “His family never found him.”
We consumers in the land of plenty are fundamentally connected to those people who make our goods.
— Jody R. Weiss, audience member
“China is a more extreme case because of its repressive authoritarian government and the inability of workers to have a voice at all,” she added.
White called on consumers to pressure the large global brands by signing petitions, writing letters, or dialing company hotlines to show concern about worker protection. Companies like Apple and Samsung are “able directly to influence the quality of the working conditions, at least in their own factories,” she said.  
“I feel like we consumers in the land of plenty are fundamentally connected to those people who make our goods,” said audience member Jody R. Weiss after the film premiere.
“It’s as though we’re one heartbeat—if they suffer, we suffer.”

‘Bring a Shield in One Hand and a Sword in the Other’: An Interview With Chinese Lawyer Yu Wensheng

‘Bring a Shield in One Hand and a Sword in the Other’: An Interview With Chinese Lawyer Yu Wensheng

As a defense lawyer, Yu Wensheng tried to visit his client in a Beijing detention center in October 2014. After the police refused him access, Yu protested outside the detention facility and online.
Two days later, Yu himself was arrested. He wasn’t allowed to meet a defense lawyer during a 99-day detention stint where he was severely tortured. In one incident, police bound his hand behind an iron chair, which was agonizing.
“My hands were swollen and I felt so much pain that I didn’t want to live,” Yu told Amnesty International in their 2015 report on torture. “The two police officers repeatedly yanked the handcuffs. I screamed every time they pulled them.”
But police brutality didn’t stop Yu Wensheng, 50, from taking on more human rights and civil cases.
This year, Yu and other lawyers lodged legal complaints against the municipal authorities of Beijing and other nearby cities for being unable to properly control air pollution. Earlier, Yu represented several rights activists and many practitioners of Falun Gong, a traditional Chinese meditation practice that has faced nearly 18 years of systematic persecution.
In a high-profile case in March 2016, Yu and three other lawyers defended Falun Gong practitioners in the coastal city of Tianjin. Yu also defended the teachings of Falun Gong—”truthfulness, compassion, tolerance.” The lawyers faced minimal retribution from the Chinese authorities, which is unusual given the sensitivity of Falun Gong cases and the defense they had mounted.
“In over a decade of defending Falun Gong’s innocence, it has long been clear who is lawful and who is committing a crime,” Yu Wensheng told Epoch Times in a recent interview.
In the first half of the interview, edited for brevity, Yu discusses his handling of Falun Gong cases.
***
Epoch Times (ET): You recently represented Falun Gong practitioner Qin Wei from Beijing. Can you confirm that he was sentenced to two and half years for passing out a book?
Yu Wensheng (YWS): To my knowledge, he was sentenced to two and a half years because he gave a passerby a copy of the “Nine Commentaries on the Communist Party [Editorial series by Epoch Times].”
The “Nine Commentaries” discusses the past few decades of the Chinese Communist Party’s (CCP) rule. I have flipped through that book and read some sections. Everything it discusses is true, and nothing is fabricated. Publishing and distributing the book are normal and legal acts of free speech. Using the “Nine Commentaries” as “evidence” to sentence Qin Wei for “undermining the law using a heterodox religion” is absurd.
China does not have a law saying that Falun Gong is a so-called “heterodox religion.” The Chinese regime use Article 300 of the criminal law to sentence practitioners without any legal basis.
The authorities say Qin Wei was undermining the law. Which law did he undermine? He was not at all involved in criminal acts. I cannot tolerate this type of suppression by the authorities. Sentencing Qin Wei is political persecution.
Qin Wei is a person of faith. The Chinese constitution protects freedom of belief. Freedom of religion and belief is written very clearly in the Declaration of Human Rights. I believe that Qin Wei was not involved in politics, and he poses no threat to the country or society. Throughout the entire process of defending him, I did not find any evidence against him. The prosecution was also unable to produce any evidence in this respect.
Of course in political cases, sometimes it does not matter how much evidence there is. The Nine Commentaries presents much historical truth. The authorities, however, don’t want Chinese citizens to know the truth.
ET: Have you encountered any case where people are sentenced because of a book?
YWS: Yes I have. I have even heard of someone being arrested and sentenced for a poem. A while ago I took on the Beijing Daxing Yu Yanjie case. Yu Yanjie was arrested and prosecuted for posting a short poem online. One line in the poem went, “The red scarf is blood stained, and behind it are evil spirits.”
At that time I said in court, “‘The red scarf is blood stained’ was something we learned as kids from communist education. As for the phrase ‘behind it are evil spirits,’ I recall in the ‘Communist Manifesto’ Karl Marx said, ‘A spectre is haunting Europe — the spectre of communism.’ This is what Marx said. A specter. What difference is there between a specter and an evil spirit?”
When I said this, the court officials told me to stop talking, saying I was engaged in my own “reactionary propaganda.” This is the Communist Manifesto. It’s what you yourselves said. You even say that the Chinese red flag is blood stained. I am engaging in reactionary propaganda for repeating the Chinese Communist Party’s words!? Am I not allowed to use their own words?! Is it reactionary propaganda if it comes from my mouth? Is it positive publicity if it comes from their mouth!?
The law does not have the word “reactionary.” Which regulation of the Criminal Procedure Law says that going against the Party is a crime? If you are wrong, then you must be opposed, but you aren’t even allowing criticism or an opposing voice. Then you don’t need the “People’s Congress,” public prosecution laws, lawyers, inspection institutes, or courts. All you need is the Public Security Bureau.
If an ordinary netizen is unhappy with the government, nothing severe will happen. They may be released after several days of detention. However, Falun Gong practitioners may be prosecuted. The issue becomes political, and the authorities hold up a book or a poem as their excuse for charging someone, arresting them, and engaging in political persecution.
In that case, why do we need laws?
ET: The Chinese authorities have prosecuted Falun Gong practitioners with the explanation of needing to “maintain stability” in society. Do you think that practitioners are a threat to society?
YWS: This is a country run by atheists. The Communist Party forbids people from believing in God. They do not allow you to detach from atheism. They have formed organizations for all traditional religions, such as the Three-Self-Patriotic Catholic Church and the Buddhist Association. There are division-level and section-level monks. Religion is essentially being managed by the Party.
I have interacted with many Falun Gong practitioners. I feel that if everyone believed in Falun Gong, then in the words of the Party, society would become too harmonious. I have nothing but respect for Falun Gong practitioners. They have extremely high standards for themselves that I cannot hold myself to because I cannot give up many worldly things. Falun Gong teaches you to be a better person and let go of your egotistical desires.
Most of us blame others when problems arise to alleviate our own responsibilities. Falun Gong practitioners are different. When problems arise they first look inwards and consider what shortcomings they have. They take responsibility for their own actions and more. This has really moved me.
I sometimes have disagreements with Falun Gong practitioners, but whatever the problem is, practitioners always search within themselves for the reason. After interacting with them for a while, I have also learned to first look for my own problems before blaming others. Once I am sure I am not at fault, then I can start to consider whether others are at fault. However, I am not yet at the realm of letting go of ego.
ET: You have taken on many Falun Gong cases. Is your defense logic different from that of what other lawyers used in the past?
YWS: From 2016, I took on many Falun Gong cases from all over the country. At first I thought I could just do a few cases and then proceed on to other stuff. However, I did not imagine that the authorities would arrest this many Falun Gong practitioners that year.
I think ten years ago, lawyers had a primarily defensive and protective strategy. Prosecutors would bring their swords while lawyers brought their shields. However, a shield can only protect you. I think this strategy is no longer enough. A shield can protect: though you cannot hurt me, it does not threaten the authorities who persecute Falun Gong.
My thinking now is that lawyers who go to court should bring a shield in one hand and a sword in the other. If you arrive with a sword and point out the truth behind them committing an illegal crime, the prosecutors become afraid of harming themselves. Whether it’s the police, the procuratorates, or the courts, they must consider that if they continue persecuting Falun Gong, they will be held responsible in the future.
I observe the prosecutors all the time. They have handled many Falun Gong cases, so usually when you are speaking in court, they do not listen and make little side movements. However, as soon as you mention that they are involved in a criminal offense, they start paying attention. The prosecutor suddenly raises his head to listen. The judge also listens. In fact they understand clearly in their hearts: those who persecute Falun Gong will be held responsible in the future!
They must be clear that persecuting Falun Gong is a crime! We must point this out not only from a technical perspective, but also at the fundamental legal angle as well.
From a legal point of view, there are no laws in China that specifically criminalizes the practice of Falun Gong. Falun Gong is not one of the 14 cult organizations identified by the Party. Actually labeling even those 14 organizations as cults is illegal because the Ministry of Public Security and the General Office of the State and the Party do not have the power to determine what is a cult.
The shift in my thinking of going on the offensive in representing my client finally led to my defense of Zhou Xiangyang and Li Shanshan in Tianjin. Though it was just one single case, I felt that it is in fact a defense of the entire Falun Gong community. The defense summarized everything that has happened since 1999, the authorities’ politically-motivated persecution of Falun Gong, and pointed out that the authorities are the ones who are committing crimes.
This case gave me the opportunity to make the contributions I should be making to this group of people. Falun Gong practitioners have really been through a lot. I believe that the Falun Gong community has created an opening for the Chinese people. Without them, China’s human rights situation could be a lot worse.