LEGER: Chinese spying in Canada? This is just the start

 October 15, 2012

Charles Ding, Huawei Technologies Ltd.'s senior vice-president for the U.S., testifies on Capitol Hill in Washington on Sept. 13 before the House Intelligence Committee, as lawmakers probe whether the expansion of Chinese tech giants in the U.S. market poses a threat to national security.

So is China a military threat, an economic threat and a political one, all wrapped up in one? Or are we just scared about barbarians at the gates?
At the very least, we feel threatened by China. The Russians are spying on us, as proved by the Jeffrey Delisle spy case. And China’s arrival as a superpower means its influence and its intelligence agencies will reach into every corner of the world. Canada’s government is already feeling the squeeze.
Ottawa looks set to block a Chinese equipment maker from winning a major government telecommunications contract. It is wringing its hands over the potential takeover of Nexen Inc. by a company controlled by the Chinese government. And it suspects the Chinese of some very undiplomatic activities in Canada.
The immediate issue is whether or not Chinese telecom giant Huawei should be excluded from work on a new secure government communications network. The system replaces dozens of older IT systems and will carry immense amounts of government information.
Huawei builds equipment that runs networks, like Cisco Systems does or Nortel used to do. There are dark suggestions about technical and commercial espionage by or for Huawei having played a part in Nortel’s downfall.
Last week, a powerful U.S. congressional committee alleged that Huawei and another Chinese telecom manufacturer, ZTE Corp., represent threats to the security of data networks that power the North American economy.
The committee offered few specifics, but the warning alone seemed to rattle Ottawa. It’s not the first about the Chinese.
In 2010, Canada’s top spy warned about foreign snoops operating in Canada and seeking influence with Canadian politicians. Richard Fadden, director of the Canadian Security Intelligence Service, made the comment in apparent reference to the Chinese.
Fadden clammed up about Beijing specifically, probably because his political masters didn’t want to rock the boat. But then last month, with Fadden still in charge, the CSIS annual report formally warned about foreign interference in Canadian business through takeovers or outright spying.
While not naming China in the report made public, CSIS says foreign companies operating in Canada could be connected to hostile governments or foreign intelligence agencies. CSIS suspects foreign competitors might be getting “clandestine intelligence support for their pursuits here.” Or they might buy access by gaining control of Canadian firms.
There’s also a cheap route: cyber-espionage. CSIS says computer networks run by the federal government and by the aerospace, petroleum and high technology industries are under frequent attack, as is university research. “State-sponsored attackers are also seeking any information which w
Same goes now with the Chinese. China is a superpower and when you’re super, you don’t have to play fair.
ill give their domestic companies a competitive edge over Canadian firms,” CSIS says.
And it’s happening all over the country. A former government official told me that Chinese spies are active here in Halifax, with special interest in military activities and the many resident defence, aerospace and technology companies.
Suspicion is now complicating the proposed $15-billion Nexen takeover by the Chinese National Offshore Oil Company (CNOOC). Some critics of the deal suggest Nexen could be used as a window into other parts of the economy.
The federal government is considering whether or not to approve the CNOOC bid, based on its “net benefit to Canada.” That gives Ottawa an exit if it really doesn’t trust the Chinese. By the way, it doesn’t.
CSIS has repeatedly warned the cabinet about Chinese political and economic espionage. Trouble is, the government is also trying to encourage business and trade with China, with billions of dollars on the line.
It’s a delicate problem. Canadian officials scramble around trying to deflect or block Chinese interference in our internal affairs, without overtly offending Beijing. CSIS and other elements of the national security apparatus must be vigilant, but discreet.
The threat feels new because it’s the Chinese now, not the Americans. It used to be that America was our friend and, officially, we didn’t care much what it did elsewhere in the world. We knew the Americans meddled in our affairs too, but there wasn’t much we could do about it, at least not publicly.