The threats of surveillance and potential cyberattacks from Huawei's equipment to the telecommunications infrastructure of other nations have long been known. It is essential for business leaders to understand this: there is no such thing as a private company in China.... all Chinese companies and individuals must assist with intelligence efforts if asked. Pictured: Huawei headquarters in Shenzhen, China. (Photo by STR/AFP via Getty Images)
In late September, Meng Wanzhou stepped off the Air China plane in Shenzhen to a hero's welcome. It was the triumphant return of an innocent Chinese tech executive from wrongful imprisonment by the West. The truth is far different.
Meng, a Chinese national, was on Canadian soil in 2018 when the Trump administration began extradition procedures against her as part of a fraud case against both her and her employer, Huawei, for potentially violating U.S. trade sanctions on Iran. In Canada, the imprisonment which she called "an abyss" amounted to wearing an ankle bracelet and enjoying an extended stay in the city of Vancouver, where she, Huawei's CFO, was free to explore the city by day, while living in her own home there, taking classes in painting and lessons in English.
As a Chinese company with great strategic and commercial importance to Beijing, Huawei has long been regarded with suspicion by western nations for its attempts to dominate the emergence of 5G networking. Its networking products and services compete against those of western firms that are not under the control of their governments. The threats of surveillance and potential cyberattacks from Huawei's equipment to the telecommunications infrastructure of other nations have long been known. Back in 2013, Britain's Joint Intelligence Committee explained to Parliament the risk of cyberattack:
"It would be very difficult to detect or prevent and could enable the Chinese to intercept covertly or disrupt traffic passing through Huawei-supplied networks."
U.S. concerns with Huawei are that using equipment made by a Chinese company, with such close ties to China's government, for critical infrastructure is an unacceptable security risk, but also that by slowing acceptance of Huawei's technology it will maintain American leadership in 5G technology. Given the statements of the company's colorful founder, Ren Zhengfei, it is not hard to see why the U.S. might be suspicious. "Surge forward, killing as you go, to blaze us a trail of blood," he exhorted company employees a month after his daughter's arrest in Canada, according to a transcript seen by The Wall Street Journal. The Chinese would later claim the translation of those fiery words was "overly literal."
Literally or figuratively, though, the company's actions and closeness to China's regime and military were enough for the Australians, whose government banned Huawei from the Australian telecommunications market. The issue is trust between nations in cyberspace, wrote Simeon Gilding, former head of the Australian Signals Directorate's signals intelligence and offensive cyber missions. "It's simply not reasonable to expect that Huawei would refuse a direction from the Chinese Communist Party,"
Exactly. It is essential for business leaders to understand this: there is no such thing as a private company in China. Gilding's point underscores the law in China: that all Chinese companies and individuals must assist with intelligence efforts if asked.
Two days after Weng Wanzhou's arrest in Vancouver, Beijing played hardball with Canada, arresting two Canadians in China for "espionage." One, Michael Spavor, was an entrepreneur who led tours into North Korea. The other, Michael Kovrig, was a former Canadian diplomat at its embassy in Beijing before joining a think tank called the International Crisis Group. The two men were held, often in solitary confinement and subjected to interrogations lasting eight hours with no legal counsel. In a miracle of coincidence, both men were released from prison the very same day Meng made her triumphal return to the cheers of her Huawei colleagues in Shenzhen.
Huawei is hardly slowing down. Despite still being under telecom restrictions imposed by the Trump administration, Huawei was granted hundreds of applications to purchase chips for its automotive supply business by the Biden administration. The company aims to be a component provider for "intelligent connected vehicles," according to a spokesman.
The Chinese telecom giant has been playing both sides of the street in Washington for several years, hiring lobbyists and law firms to plead for its interests. Among others, former Republican House Speaker John Boehner's law firm, Squire Patton Boggs, does so. The company hired former congressmen Don Bonker, a Democrat, and Republican Cliff Stearns after their time in office. In July, Democratic super-lobbyist Tony Podesta signed up as a "consultant" for Huawei. A Huawei company message board posting noted that the hiring was part of an "expanded U.S. influence operation."
Huawei also employs a white shoe Washington law firm, Sidley Austin, to handle its interests in the capital. This firm was also representing Meng Wanzhou in her successful battle to avoid extradition to the US. Christopher Fonzone, a partner in that law firm, was recently confirmed over Republican objections as the Biden administration's choice to be the top lawyer for the office of the Director of National Intelligence. An Obama administration veteran, Fonzone had spent the Trump years advising clients on "cybersecurity and data protection, military and intelligence operations, litigation and other forms of dispute resolution, foreign trade sanctions, and Committee on Foreign Investment in the United States (CFIUS) matters," according to his LinkedIn profile, which goes on to note, "He also has particular experience assisting clients in the management of crisis situations."
Peter Schweizer, President of the Governmental Accountability Institute, is a Gatestone Institute Distinguished Senior Fellow and author of the best-selling books Profiles in Corruption, Secret Empires and Clinton Cash, among others.