THE BLOG
02/28/2019 14:49 EST | Updated 02/28/2019 15:43 EST

Huawei's Security Risks Outweigh Its Investment In Canada

The company announced it will create 200 jobs, but that doesn't mean it has Canada's best interests in mind.

Huawei's Chief Executive Officer Liang Hua recently announced a plan to increase the company's investment in Canada. According to Liang, the Chinese telecom hegemon will expand its number of employees by 20 per cent and add another 200 jobs in research and development. In addition, Huawei will add another 15 per cent to its existing investments in Canada.

The announcement came as tensions between the company and Canada reached an all-time high.

SOPA Images via Getty Images

The federal government has yet to make a decision on the company's participation in the Canadian 5G network, leaving Huawei's future in Canada unclear. For Prime Minister Justin Trudeau and the Minister of Public Safety Ralph Goodale, the decision is not an easy one to make.

Then there's Huawei CFO Meng Wanzhou, currently awaiting an extradition hearing after being arrested in Vancouver under the terms of a Canada-U.S. extradition treaty. Liang has stopped short of implying that the arrest was politically motivated, adding that it is rare for the U.S government to indict and arrest corporate executives.

In addition to the potential threats to national security that Huawei may pose, several detained Canadians' fates may rest on how their own government proceeds, including one Canadian citizen who was sentenced to death earlier in China.

Huawei's government ties cannot be overlooked

It seems Huawei's cash bait is its most recent attempt to motivate the Canadian government to improve its position in securing future infrastructure projects, such as 5G and expanding Canadian rural networks.

With Huawei at the centre of these controversies, it has made several attempts to reform its image in Canada. It had denied all allegations regarding claims that it poses a national security threat to Canada or took part in espionage activities. Liang has insisted that the Chinese government does not require companies to leave backdoors to their devices. Liang further argued that Huawei has been in Canada for 10 years and maintained a good record in abiding with local regulations and legal requirements.

The Chinese telecommunication company is also making an effort to distance itself from the aggressive and predatory Chinese government, which is complicated by rising nationalism in China and Huawei's position in the middle of a U.S.-China trade war.

However lucrative and attractive Huawei's investment may seem, it would still not be in Canada's best interest to overlook the risks that Huawei poses.

Huawei is the "single largest espionage threat" against Canada.

While Huawei argues that the company has no ties with the Chinese government, there is evidence suggesting otherwise. Like many other companies in China, Huawei also has an internal Communist Party committee (required by Chinese law) that oversees the conduct of party members in the company. This means the Communist Party has a leading role in influencing Huawei's operation through both external and internal channels, which is less desirable for the company's future on Canadian soil.

It rather common for the Chinese government to use Chinese companies to conduct espionage and spying activities. Last month in Poland, a Huawei executive was charged with espionage. U.S intelligence suggests that Huawei is the "single largest espionage threat" against Canada.

In December 2018, two Chinese nationals were indicted by the U.S. Department of Justice for committing cyber intrusion targeting American intellectual properties and confidential documents. The two spies worked for companies that allegedly have ties with China's ministry of state security.

Bloomberg via Getty Images
Meng Wanzhou, chief financial officer of Huawei, right, leaves her home.

In 2016, a Chinese national named Su Bin pleaded guilty to conspiring to steal U.S. military secrets. Su used his business to cover up his real intention of conducting spying tasks for the Chinese communist regime.

When facing government pressure, Chinese companies tend to fall in line in order to receive preferential treatment. For instance, Bytedance and Tencent have carried government propaganda campaigns on their social media platforms. Chinese e-commerce hegemon Alibaba is believed to have helped the Chinese government develop a powerful propaganda app. These tasks may have nothing to do with the company's stream of income or their essential business. However, this is how Chinese companies maintain positive relations with the Chinese government. And here, Huawei is adopting the same technique to sway Canada's government.

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Investing in Canada would create jobs and spur innovation — these are indeed goals that the Canadian federal government wants to achieve. However, Huawei's potential ties to the Chinese government, which now has a notorious record of conducting mass surveillance and monitoring its citizens, cannot be overlooked.

As we do not have a final verdict on the company's 5G project, it remains unclear whether Huawei's investments will save the company from suffering significant losses. Yet through Huawei's open comments and actions, one thing remains crystal clear: Huawei behaves just like any other large Chinese corporation, and does not necessarily share the values that many Canadians have at home.

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