Dialing up a New Cold War

Mathew Preston
December 21, 2018
Huawei makes great smartphones with the potential to be weapons of cyberwar between China and the West. That may partly explain why Canada arrested Huawei executive Meng Wanzhou for possible extradition to the U.S. As Mathew Preston reports, we’re being forced to take sides.

Dialing up a New Cold War

Mathew Preston
December 21, 2018
Huawei makes great smartphones with the potential to be weapons of cyberwar between China and the West. That may partly explain why Canada arrested Huawei executive Meng Wanzhou for possible extradition to the U.S. As Mathew Preston reports, we’re being forced to take sides.
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The revelation that an unknown Soviet embassy cipher clerk had defected in Ottawa just after the Second World War jolted millions of Canadians and Americans who believed the Soviet Union remained the friend and ally it had been during the epic struggle to crush fascism. While the trove of secrets Igor Gouzenko brought with him – including proof of Soviet spy rings in Canada, the U.S. and Great Britain aimed at stealing the West’s nuclear secrets – formed just one bundle of evidence that the benign view of the Soviets was sorely mistaken, Gouzenko’s brave act had an outsized influence as a popular wakeup call. Coming months before Winston Churchill’s famous “Iron Curtain” speech in 1946, the Gouzenko Affair would be credited with marking the beginning of the Cold War.

Although history doesn’t truly repeat itself, it has been noted to rhyme at times, and there are signs the Huawei Affair, which erupted in early December with Canada’s arrest of the Chinese telecommunications giant’s Chief Financial Officer, Meng Wanzhou, may have a similar effect on Canadian sensibilities. Akin to the Gouzenko Affair it highlights the stark reality, right on Canadian soil, that China’s intentions are anything but benign and that its values conflict with the West in the fundamental areas of human rights and the rule of law. In so doing, the Huawei Affair could amplify concerns among intelligence and security officials that were heretofore only dimly recognized in Canadian public opinion.

Like the USSR following the Second World War, today’s China is expanding its political, economic, ideological and military influence throughout the world – from Greece to Pakistan to Djibouti, as well as across the G7 countries and Australia. It is also intimidating or coercing its neighbours, most notably through building and militarizing islands in the South China Sea. Its human rights abuses, while not on the same scale as the Soviets’ or those of China itself under Mao, are deeply worrisome, with the gulags of Siberia finding a modern-day equivalent in Xinjiang’s concentration camps.

In Vancouver a small group of protestors demonstrated against Canada’s arrest of Meng Wanzhou.

The Soviets were fanatical practitioners of the surveillance state, as is China’s current Communist government, which is exploiting the full panoply of advanced technology to comprehensively keep watch on its 1.4 billion subjects. The many measures include millions of cameras and listening devices and the perfection of facial recognition software to almost continuously track the movements of its citizens, combined with its “social credit” system of coercion and reward designed not only to deter lawbreaking but also to provide points for “good” behaviour. Police officers aren’t even needed; technology can catch a person jaywalking or criticizing the state and issue them a ticket – or constrain their freedom to move or communicate. The Economist has called what is happening in China “hyper-surveillance”.

While this information has been trickling into the West for years, most of it was ignored, downplayed or ridiculed as exaggerated by China’s many apologists and appeasers – similar to how anti-communist Cold Warriors were marginalized as extreme, paranoid or plain déclassé. But the Chinese government’s bombastic and extreme rhetoric of revenge upon Canada’s arrest of Meng could hardly be ignored. Canadian authorities detained her in Vancouver to comply with an American extradition request. U.S. authorities want her to stand trial on charges of bank fraud related to her alleged involvement in subterfuge that allowed Huawei to skirt sanctions against Iran.

The world’s largest telecom equipment manufacturer, the second-largest maker of smartphones, and a leader in 5G technology, Huawei Technologies Company, Ltd. is based in Shenzhen, Guangdong province. Active in 170 countries with an estimated 170,000 employees and projected 2018 sales of over US$100 billion, it was founded and remains led by a businessman named Ren Zhengfei and his family, including Meng, Ren’s daughter. Although frequently described in Western media as “employee-owned”, Huawei appears to in fact be controlled by a body owned by the local or perhaps provincial government – which means, ultimately, the Communist Party. Until 2010, even the membership of the company’s board of directors was secret. The Chinese meaning of Huawei’s name suggests it is part of the country’s long-term program to modernize and expand on all fronts.

Although unusual, Meng’s arrest did not seem the stuff of international crisis until the Chinese government loudly proclaimed it as such. Denouncing Canada’s action as “unreasonable, unconscionable, and vile in nature”, it warned of “grave consequences” were she not released. Within days Chinese authorities proved true to their word, arresting two Canadians for “engaging in activities that endanger the national security” of the country. Initially their abrupt and mysterious arrests appeared typical of disappearances that occur in police states – although consular officials were soon granted access to them.

Michael Kovrig is described as a former Canadian diplomat who since 2017 has worked for the International Crisis Group. Its website says Kovrig “conducts research and provides analysis on foreign affairs and global security issues in North East Asia, particularly on China, Japan and the Korean peninsula”. The more unusual figure, Michael Spavor, is described as an “entrepreneur” whose life’s work is to “bring together” east and west. Among other things, Spavor is said to be a friend of the deeply weird former professional basketball player Dennis Rodman, who in turn has a bizarre personal relationship with North Korea’s dictator, Kim Jong Un.

Either way, the Chinese state responded to the reasonable U.S.-Canada actions under international law with brusque and seemingly reflexive arrests that had little apparent basis in law or fact. Its actions, attitude and underlying assumptions illustrate the differences in worldview between it and the West. Publicly, the Chinese Ambassador insisted that Canada did not comply with the U.S. request due to its treaty obligations, but for its own nefarious political reasons. The ambassador’s words also revealed that he assumes a prime minister of a Western country can simply call a judge and have a prisoner released.

Of course it didn’t help that President Donald Trump trampled all over legal and diplomatic conventions by publicly musing that he might decide to trade Meng’s freedom for a better trade deal with China. This seriously undermined Prime Minister Justin Trudeau’s claims that politics are not involved. Trudeau showed some welcome backbone in repeating that Meng’s arrest was non-political. Foreign Minister Chrystia Freeland and Defence Minister Harjit Sajjan met with their American counterparts on December 14 to discuss the issue.

The Huawei Affair has also exposed deep divisions over China in Canadian political and business circles. One side is comprised of those counselling caution when dealing with China, such as Richard Fadden, former director of the Canadian Security Intelligence Service (CSIS). The other side believes that diversifying Canada’s exports beyond the United States is so urgent that concerns about Chinese authoritarianism can be overlooked. This view is epitomized by John Manley, former deputy prime minister in Jean Chretien’s Liberal government and current President and CEO of the Business Council of Canada. He argues that Canada should have let Meng slip away through “creative incompetence”.

Until now, Canadians have been mostly immune or oblivious to the national security issues regarding China and its major companies, such as Huawei. These are often state-owned and, if not, almost invariably state-connected. Chinese companies are bound by law to aid security officials whenever asked, which is especially concerning when it comes to telecommunications. “Trap doors” and other means of access secretly built into telecom devices and infrastructure exported worldwide has been used for industrial espionage and, it is feared, would be central to China’s cyberwarfare in any major confrontation with the West. But instead of being exposed to discussions of Chinese espionage, intellectual property theft or the funding of Canadian research (the IP of which is then lost to China), Canadians were more likely to see flashy Huawei commercials on Hockey Night in Canada.

Huawei is of particular concern because only one other company worldwide has leading-edge 5G technology – Nokia of Finland. This next-gen is essential to the mass bandwidth needed for driverless cars and the internet of things. There have been credible allegations (later disputed as false, though Bloomberg Newsweek is standing by its story) that Chinese intelligence has infiltrated the supply chain of Supermicro, one of the world’s largest suppliers of motherboards, to install a chip for illicit backdoor access. The national security implications surrounding the hardware and software suppliers to national telecoms have caused New Zealand, Australia, Japan and the U.S. to bar Huawei from being part of the new 5G network; France and Canada are said to be considering similar moves. In the U.S., military commissaries are barred from selling Huawei phones, while commercial providers like AT&T, Verizon, and Best Buy have voluntarily stopped carrying Huawei devices.

Like the Gouzenko Affair, Meng’s detention and possible extradition will not be a deciding factor in the competition between East and West. What it has done, like its predecessor, is show the broader Canadian and American publics what those paying close attention to the issue have known for quite some time: there is a competition between China and the West, it is serious, and the value systems are in stark contrast if not outright conflict. Huawei’s reach, its connection to the Chinese state and its legal obligations make Huawei emblematic of Chinese geopolitical competition with the West. Already, sales of Huawei devices are said to be collapsing, and European countries have announced they are cancelling or revisiting multi-billion-dollar telecommunications equipment purchases. China, meanwhile, appeared to be doubling down, just before Christmas arresting Sarah McIver, a young teacher from Alberta, for alleged work visa irregularities and almost instantly sentencing her to unexplained “administrative punishment”. China’s menacing actions in the wake of Meng’s arrest, like Soviet espionage operations unveiled by Igor Gouzenko in the twilight of the Second World War, have, hopefully, shown Canadians which side we ought to be on.

Mathew Preston is a writer based in Alberta. He holds a Master of Strategic Studies from the Centre for Military and Strategic Studies at the University of Calgary and has worked in the defence industry in Ottawa.

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