China's offensive on Canada, in plain sight

Terry Glavin: Huawei is a key weapon in Beijing’s global economic and political ambitions. The Liberals are playing a dangerous game pretending otherwise.

By Terry GlavinMay 17, 2019

Trudeau speaks with Hu Chunhua, Politburo Member of the Communist Party of China and Party Secretary of Guangdong Province before a meeting in his office on Parliament Hill on May 10, 2016. (THE CANADIAN PRESS/Adrian Wyld)

It’s been on the front pages and at the top of the nightly newscasts for months. Diplomatic relations between China and Canada have collapsed. Beijing has arbitrarily imprisoned Canadian diplomat-on-leave Michael Kovrig and entrepreneur Michael Spavor, embargoed Canadian canola and pork exports, and threatened more pain to come. And China and the United States are at the brink of an all-out trade war.

There’s the shadowy role the Chinese telecom giant Huawei is playing in everything, and all the exotica about digital espionage, mass surveillance and the coming “internet of things” we’re supposed to sort out, and what it all might mean for Canada’s national security. It’s a lot to digest. It doesn’t help, either, that every day the saga seems to take another dramatic twist.

But the big thing that’s getting in the way of a clear understanding of what’s going on and the stakes in play, is that the whole story is occluded by an enormous amount of what is known in the vernacular as bullshit. It’s especially disturbing that a major source of the stuff is Team Trudeau in Ottawa. We’ll get into all that in a bit.

Straight away, it will be useful to stand back in order to get a better look at the fictions, public-relations dodges and outright lies that are making it difficult to see what is happening, in plain sight, in front of our very noses.

First off, by apprehending Huawei chief financial officer Meng Wanzhou in Vancouver last December, Canada was not foolishly allowing itself to be drawn in to a mere trade fight between U.S. president Donald Trump and Chinese president Xi Jinping. What’s going on here truly is a big deal. It has grave implications for Canadian sovereignty. Technology is the main theatre of contest in the new global struggle for economic domination, and the way events unfold in the Huawei standoff, and in the Trump-Xi trade talks, will determine the kind of world we’ll be living in for years and years to come.

READ MORE: Where is the outrage over the plight of China’s Uyghurs?

You can forgive yourself if you’ve come to think this is just about a whole lot of trouble caused by the loathsome and dangerously excitable Trump. That’s exactly what you would think if you hadn’t been paying particular attention, or if you give too much credit to otherwise sensible people who reflexively blame Trump for everything.

In fact, there is something approaching bipartisan consensus in the U.S. Congress that the United States should be taking a very hard line with China on matters related to trade, the theft of American intellectual property, cyber-espionage, cyber-sabotage and so on. If you think Trump talks tough on China, you should listen to ranking Democrat Elizabeth Warren some time. When hard-right nationalist theoretician Steve Bannon and liberal free-trade evangelist Thomas Friedman are on the same side of an issue, you should sit up and take notice.

On Huawei, specifically, the U.S. Commerce Department has only now blacklisted the shadowy Shenzhen telecom behemoth and 70 affiliated companies, meaning they’re all effectively banned from buying gear from U.S. suppliers without federal approval. But eight years ago, it was the Obama administration that was targeting Huawei, freezing out the company from Homeland Security operations.

It’s commonplace to hear that the Trump administration is pressuring Canada to follow the American lead and keep Huawei out of emerging fifth-generation (5G) internet connectivity technologies. But eight years ago, it was the Obama administration that was trying to convince Canada to quarantine Huawei.

It’s true that by hinting that charges against Meng Wanzhou might be dropped if she could be used as a bargain chip in trade talks with Beijing, Trump stupidly muddled the Justice Department’s case against her on charges of bank fraud and evading Iran sanctions. But the Justice Department warrant for Meng was drawn up last August, and there is no evidence that the Trump White House was even aware of it when the arrest warrant for Meng was executed in December at Vancouver International Airport.

Huawei has been under investigation by the U.S. Justice Department and the U.S. State Department for sanctions-busting in Iran since at least 2011, and all along, U.S. intelligence agencies have also fingered Huawei as a spy threat. But Ottawa didn’t listen when Canada was warned eight years ago.

Now, Huawei is embedded in 10 Canadian universities and two of Canada’s largest telecoms (Bell and Telus). Huawei employs more than 1,000 people across the country, and over the past several years the company has poured roughly half a billion dollars into research and development initiatives. Huawei has also established itself as a lavish spender in Canada’s opinion-making and policy-shaping circles, devoting enormous resources to public-relations, lobbying, image-polishing and corporate spin.

A “benefactor” member of the Canada-China Business Council, Huawei has cultivated the habit of filling senior corporate positions with veteran insiders from both the Liberal and Conservatives parties. The company has lately taken on the Canadian wing of the public-relations giant Hill+Knowlton Strategies to sell itself as a trustworthy corporate citizen. It also brought in Daniel Moulton and Chad Rogers, Ontario Liberal and Conservative party insiders, respectively, who registered earlier this year to lobby for Huawei. Morgan Elliott, a senior official from the Liberal governments of Jean Chretien and Paul Martin, is now Huawei’s vice-president for government affairs. Alykhan Velshi, formerly a senior aide to Conservative prime minister Stephen Harper, was hired on as vice-president of corporate affairs. Other Huawei recruits include former journalist and Martin-Chretien era speechwriter Scott Feschuk, and Martin’s former director of communications, Scott Reid. The two run a communications and speechwriting firm.

READ MORE: Why Canada isn’t fighting China over canola

Huawei also holds centre stage in Canada’s hallowed television pastime: Hockey Night in Canada. More than a million of us tune in every week, and more during the playoffs. Thanks to a deal with the Rogers telecom that lasts until at least 2020, Huawei is Hockey Night in Canada’s presenting sponsor.

It’s gotten so that Ottawa can’t bring itself to admit that Huawei should not be permitted to bid in Canada’s 2020 5G spectrum auction, even though everybody knows Huawei is a threat to Canada’s national security. Three former Canadian intelligence chiefs have said so, publicly. Six U.S. intelligence agencies have said so. Among Canada’s Five Eyes security and intelligence partners, the U.S. and Australia have said so, New Zealand has shut the 5G door on Huawei, and while British Telecom has frozen Huawei out the United Kingdom has yet to formally bar Huawei from its 5G system. But Taiwan has shut Huawei out, and so has Japan, and so has Poland. Even Vietnam won’t allow Huawei in.

Harper’s Conservative government kept Huawei at arms length with a national-security exception governing bids to develop a federal communications network. Three years ago, two Chinese employees of Huawei had their immigration applications rejected and were barred from entering Canada after an intelligence assessment determined that they were spies. Even now, Trudeau’s Liberal government doesn’t permit Huawei to bid on government contracts.

The Privy Council Office has partitioned cabinet’s deliberations on Huawei behind a highly secretive review of the national security implications involved in 5G technologies that has drawn in several federal agencies, including the Canadian Security Intelligence Service, the Innovation, Science and Economic Development department, and the Communications Security Establishment.

Public Safety Minister Ralph Goodale and his officials have gone backwards and forwards over whether a decision on Huawei and 5G will be made before the federal election in October. Finance Minister Bill Morneau has weighed in with a less than confidence-building caveat about the national-security review, to the effect that a decision on Huawei’s 5G role would have to be “balanced” against economic considerations.

This matters, because for all intents and purposes Huawei is a key strategic weapon in Beijing’s global economic and political ambitions—Chinese President Xi himself has said as much. Huawei is one of Xi’s “national champion” corporations. The threat Huawei poses is not merely from backdoor mystery spyware subterfuge of the kind Taiwanese and Dutch government agencies have detected in Huawei gear.

In Canada, it’s commonplace to read that Huawei is a privately-owned company, or an employee-owned company, and so it’s not beholden to the Chinese Communist Party. Not even the Chinese propaganda press peddles that line anymore, but “the myth of Huawei’s employee ownership seems to persist outside of China,” according to an analysis published last month by Christopher Balding of Vietnam’s Fullbright University and Donald C. Clarke of George Washington’s law school.

China’s 2017 National Intelligence Law requires Chinese companies to “support, assist and cooperate with the state intelligence work.” Huawei’s big boss, the former People’s Liberation Army officer Ren Zhengfei, said there’s nothing to be concerned about. If asked, he says, he would never turn any Huawei data over to China’s intelligence agencies. What the Balding-Clarke findings show is that it wouldn’t be Ren’s call anyway. He owns only one per cent of the holding company that owns Huawei.

Ninety-nine per cent of the Huawei holding company is owned by a “trade union committee.” There are no independent trade unions in China. They report directly to Beijing, and trade union members have no rights to their unions’ assets. All companies of any size in China are in any case required by law to integrate a Communist Party committee into their management and decision-making structures. “Huawei is effectively state-owned,” Balding and Clarke conclude.

So what would a Canadian 5G green light for Huawei portend for the future?

Fortune-telling is a sketchy practice, but it’s helpful to have a look at the kind of 5G world that Huawei itself invites us to imagine. For a glimpse of that, all you have to do is look at what Huawei has built for 230 cities around the world, inhabited by nearly a billion people. Apart from China, the national governments of Pakistan, Kenya, Ecuador, the Philippines, Serbia and other countries have engaged Huawei to develop integrated surveillance systems involving thousands of security cameras with a capacity for facial recognition technology linked to data banks of personal information.

Imagine everything from your internet-search histories and bank statements to your medical files, travel history, employment records and biometric data, all readily available to police agencies, the intelligence services and the military via “digital clouds” allowing for the synthesis of data from public services, health care, education, transportation and “social safety” departments.

Imagine a "Brave New Canada" run along those lines. Huawei’s Ren Zhengfei recently offered this reverie to one of the dozens of television crews recently invited in the course of the company’s global “charm offensive” to Huawei’s outlandish headquarters and campus in Shenzhen: “There’s an issue of strikes. In the future, you use robots. They don’t strike. All they need is batteries.”

Charming.

READ MORE: The lies and insults that China has pointed at Canada

Now imagine the entire Canadian 5G system vulnerable to Beijing’s data-mining and manipulation and sabotage, owing to a structural chain of command that runs up through someone like Ren Zhengfei and through the Huawei “trade union committee” and Huawei’s Communist Party committee and on up to the Organization Department of the Central Committee of the Communist Party of China.

But maybe that’s just what the future looks like when we allow our imaginations to get the better of us.

Instead, we could just look at what Huawei is doing in the present, in Xinjiang, where more than a million Uyghur Muslims have been shut away in concentration camps, and the Uyghur people are being made into human guinea pigs in a nightmarish surveillance and thought-control experiment. Just last week, Huawei began working on a new pilot project with China’s notorious Public Security Bureau, the lead agency for population control, to open up “a new era of smart policing and help build a safer, smarter society.”

What Xi Jinping is betting on is that the more he turns the screws on us, the more likely it is that we’ll come down on Huawei’s side, on Beijing’s side. In Ottawa, the Chinese embassy claims that the real reason Canadians are furious at the moment isn’t because of Beijing’s thuggish hostage-taking and trade blackmail, it’s because of “white supremacy.” Ambassador Lu Shaye further insists that Chinese Canadians should be expected to side with Huawei, and the rest of us must be sensitive to the feelings of Canada’s Chinese minority.

Awkwardly for Lu, last month a survey by the Innovative Research Group and the Canada Committee 100 Society showed that while he wants Ottawa to intervene in Meng’s extradition case, tell the Americans to go pound sand and allow Meng Wanzhou to return to Shenzhen, only one in nine of British Columbia’s Chinese Canadians agree with him.

For the time being, Meng is being permitted to live in the comfort of her very own $15 million mansion in Vancouver’s posh Shaughnessy enclave, just two doors away from the official residence of the United States’ Vancouver consul-general.

One should expect a Chinese ambassador to equivocate and propagandize and lie through his teeth. But why is the Trudeau government being rather less than straight with us about all this?

For a quarter of a century, the defining foreign-policy feature of the Liberal Party brand has been a delusional myth of its own uniquely China-savvy sophistication. With everything that has happened since the rise of Xi Jinping, and the kidnapping of Kovrig and Spavor, it’s not like the Liberals are going to say, well, sorry, we’ve been wrong about China from the beginning, now we’ve put Canada’s sovereignty and our national security in grave peril, and by the way, please vote for us in October.

In Liberal business circles, it used to be considered a mark of distinction to know senior Chinese Communist Party officials by their first names, and to be seen with all the right people in Guangzhou and Shenzhen and Hubei and Shanghai. But after everything that has happened, it’s no longer possible to make the case that Canada’s interests are best served by having cabinet ministers, corporate executives and diplomats jetting off to China to swan around with the Politburo’s creepy casino-racket billionaires. It just doesn’t work anymore.

It’s no longer possible to pretend there’s even a trace of respectability in the annual diplomatic rituals of junketeering through the Central Committee’s dirty-money nomenklatura for the purposes of reducing Canada’s foreign-trade and oil-price reliance on the grubby, war-monging Americans. So the Trudeau government is in a bit of a bind.

One day, Beijing’s canola embargo is just a “scientific-based disagreement,” and Prime Minister Trudeau is telling everyone that he intends to “continue to work with China for a path forward” to resolve it. The next day, Trudeau is calling Beijing’s shredding of Canadian canola export contracts a case of blowback from the U.S.-China trade quarrels, “an excuse to prolong what is fundamentally a conflict, not even with Canada, but between the two largest economies in the world.”

This is, in the language of common speech, bullshit.

It is also a dangerous game to play. What’s at stake is how liberal democracies like Canada will survive an historic, world-changing technological and economic conflict with China and its subservient police-state allies. The analysis being put about by the Prime Minister’s Office, that it’s all merely a passing spat between the competing hegemons of the United States and the Peoples Republic, is tantamount to a political case for Canada choosing Beijing’s side.

And that’s exactly what Beijing wants.