The arrest of Meng Wanzhou, CFO of Huawei Technologies, in Vancouver, Canada, at the instance of US authorities on December 1, is sensational, and has set back China’s relations with the US and Canada several notches. It has raised a bigger question too, one that President Donald Trump has been amplifying: whether Chinese companies are part of cyber hacker groups being used by the Chinese government to steal technology?
From court hearings, it appears Meng is being accused of helping Huawei circumvent US sanctions against Iran by posing a Huawei subsidiary as a separate corporate entity. On the other hand, the Chinese media and government have condemned the arrest and asked for Meng’s release, claiming it is a bid to snuff out competition from Huawei.
There’s no doubt that Huawei is big competition. Headquartered in Shenzhen, China, it sells smartphones and telecom equipment to 170 countries, including to India. After Samsung, but ahead of Apple, it is the world’s second largest smartphone maker. In calendar year 2017, it shipped 153 million units and reported a revenue of over $36 billion. It is China’s tech leader and is driving 5G technology.
the US HITS BACK
But security issues now threaten to derail Huawei’s growth. US government alerts have advised US citizens against Huawei phones, and the US government agencies are banned from using Huawei equipment. New Zealand and Australia too have imposed a ban on the company participating in the development of 5G telecom systems. Justifying the ban in August this year, the Australian government said Huawei, ZTE and others were “likely to be subject to extrajudicial directions from a foreign government” and could present a security risk.
Western security agencies cite a Chinese law, which states that companies must cooperate with intelligence services. The US and its allies havegone a step ahead to accusing the Chinese government of using the corporate veil of neutrality to break in and steal copyrighted technology and undermine security. “China’s goal, simply put, is to replace the US as the world’s largest global superpower,” said Christopher Wray, FBI Director.
In India, though there have been oft rumblings about ‘national security’ issues about Chinese companies, there is no legal bar as yet. In November this year, Wally Yang, director at Huawei Consumer Group, announced a $100 million marketing initiative involving setting up over 100 stores in India to sell its flagship Mate 20 Pro smartphone and other devices. The tech company said it had 3,000 employees pursuing R&D in Bangalore, and together with its sub-brand Honor, it was hoping to grab around 5-10 per cent of the Indian smartphone market.
Two Indian IT companies had been successfully targeted in 2015 by Chinese cyber hackers, and a US cyber monitoring firm, FireEye, said that Chinese cyber rings over 10 years had broken into Indian aerospace, military and maritime computers. The Chinese are in the firing line today. Some weeks ago, there was surprise and shock in the corporate world because it turned out that Jack Ma, head of the $400 billion Alibaba empire, was revealed to be a card-holding ‘Communist’.
CORPORATE COLLUSION
But corporations through history have participated or extended the programmes and ideologies of their home governments. Hundreds of German companies who we respect today were one-time allies of Adolf Hitler’s regime providing armaments, holocaust support and using slave labour in their factories. These include big names such as armaments maker Krupp (now Thyssen Krupp), chemicals giant Bayer, equipment manufacturer Siemens AG and Hugo Boss, which stitched Nazi uniforms using slave labour.
Or, more recently, Edward Snowden, former employee of a defence contractor, leaked out classified information on how the US and its allies were running numerous global surveillance programmes including one called ‘Prism’ that tapped directly into the servers of nine Internet firms, with their consent, including Facebook, Google, Microsoft and Yahoo. It’s now China’s turn at imperialism riding its successful corporations, and the Old Order does not like it! Trade bans with Iran have been drawn up by the US, so why should India, a poor country, define its interests in line with US’ ‘national’ interests?
It’s a complex world out there of cyber snooping and corporate theft. Without doubt, every country, including India, must safeguard its national assets. China is an aggressive threat today; but there are others too. We need not buy into the ‘national security’ definitions of the old colonialists, who have had their day.