- - Sunday, August 4, 2019

TORONTO — Canada’s view of Huawei is far different from that of the Trump administration, which sees the Chinese telecommunications giant as a potential security threat that U.S. companies and foreign governments should shun.

Despite concerns about Huawei’s links to China’s military and intelligence services, and despite the arrest of a top Huawei executive in Vancouver last year and fight of extradition to the U.S., the Chinese company will help expand high-speed internet access in Canada’s far north.

Critics say the move is part of China’s expanding presence in the polar region as it seeks a stake in the estimated $30 trillion in untapped resources in the Arctic Ocean.


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Despite a strong pressure campaign from Washington, officials in Ottawa said last week that they were putting off a decision on whether to ban Huawei from participating in Canada’s next-generation 5G wireless networks.

The size of the Huawei deal in the far north is not large but has raised fears that the Chinese company will effectively have a monopoly on communication services in the vast but sparsely populated regions. Huawei Canada said last month that it was working with Canadian partners to connect more than 70 rural and remote communities in the next five years, including communities in the Arctic, northeastern Quebec, Newfoundland and Labrador.



“Everyone deserves to be connected,” Alykhan Velshi, a Huawei Canada vice president, told reporters in Ottawa.

The Canadian contract is just one more sign that Huawei, the world’s biggest maker of telephone equipment and the No. 2 smartphone brand, has been able to absorb the U.S. pressure campaign.

The company announced last week that global sales were up 23% in the first half of the year despite the Trump administration’s blacklist and a blockade on access to key American-made components and technology. Liang Hua, chairman of Huawei Technologies Ltd., told a news conference in the company’s Shenzhen headquarters that U.S. pressure had “galvanized our people” but acknowledged that the company could face difficulties in the second half of the year.

Huawei’s ability to operate north of the U.S. border is all the more remarkable given Canadian officials’ sensational Dec. 1 arrest of Meng Wanzhou, the company’s chief financial officer and one of the best-known female executives in China. The Canadian government said it was acting at the request of the Trump administration in an investigation of Huawei’s business ties with Iran, but Beijing’s reaction was furious. It protested the arrest and detained two prominent Canadians working in China in apparent retaliation.

In what is perhaps an olive branch to Beijing, Ottawa has signed a deal to let Huawei provide high-speed internet access to 70 communities across Canada’s Arctic region. Though Huawei’s role in the project is small, critics worry about China’s growing presence across the polar region.

Mr. Velshi said of the two men held by the Chinese government, “Obviously we’re concerned, like all Canadians are concerned, about their well-being.

“This is a time of real tension between Canada and China, and it can only be solved by governments,” Mr. Velshi added.

Michael Byers, who teaches global politics and international law at the University of British Columbia in Vancouver, said Huawei’s role in the wiring of Canada’s north is not a current security risk. The fear is that, if Huawei gains a foothold as the only high-speed internet provider in the area, it could turn off internet access to those Canadians in the event of a Canadian-Chinese trade war.

“This deal is not necessarily a bad thing,” he said, but it plants a new vulnerability in Canada’s communications and security apparatus.

Huawei fears

Some Canadians share the U.S. government’s fear about Huawei’s background and intentions.

Member of Parliament John McKay of the ruling Liberal Party of Prime Minister Justin Trudeau said the issue with Huawei is that this foothold could give China leverage to use against Canada in the future.

“I don’t think Canada is monitoring this,” said Mr. McKay*, chairman of the Canada-United States Permanent Joint Board on Defense.

Mr. Velshi rejects assertions that Huawei is too closely aligned with the Chinese government and is obliged to cooperate with Chinese intelligence agencies. Every Huawei employee in Canada follows Canadian laws, he said.

The perception that Huawei’s Canadian offices resemble “Dr. Evil’s lair,” where employees toil away “at the latest world-ending scheme, is false,” he added.

Australia and New Zealand have banned Huawei from having any role in their 5G networks, and the Trump administration is pressing Canada and European governments to follow suit. But the pressure campaign has been mixed, in part because of the quality and price competitiveness of Huawei’s network products.

President Trump further muddied the water by suggesting that the U.S. pressure campaign against Huawei could be eased if Beijing agrees to a major bilateral trade deal. Some Canadians said that offer undercuts U.S. claims that the opposition to Huawei is based on security concerns.

Under the deal for the far north, Huawei will build the radio and antenna infrastructure to supply high-speed internet to about 200,000 people as part of Mr. Trudeau’s multibillion-dollar commitment to upgrade high-speed communications across Canada.

Huawei’s project in Northern Canada is part of China’s long-range plan to expand its presence in the Arctic and join in the management and exploitation of the natural resources and transport routes in the rapidly warming polar sea.

China’s role as an international actor in Arctic affairs and treaties dates back almost 100 years. In 2013, China became an official observer at the Arctic Council and in 2018 described itself as a “near-Arctic State.”

China is building a nuclear-powered icebreaking cargo vessel, and the country maintains polar research stations in Iceland and Norway. In 2017, China’s icebreaking research ship the Xue Long (Snow Dragon) became the first official Chinese vessel to cross the Arctic Sea by way of Canada’s Northwest Passage.

The U.S. and Russia have been expanding their presence in the far north, and now China is increasing its “navy activity in the Arctic waters,” University of Calgary political science professor Robert Huebert told CBC Radio.

Mr. Byers said fears of Chinese activities in the north are overstated. China asked for and Canada gave permission for the Snow Dragon to transit through Canada, he said.

Mr. McKay, however, said he thinks China plans to expand its claims in the north, and many worry that Canada and the U.S. are not prepared to push back.

“I have sufficient respect for the Chinese security establishment that they could find a way around any of our controls within five years,” said Richard Fadden, a former director of Canada’s Security Intelligence Service who served as an adviser to Conservative Prime Minister Stephen Harper. “So once they are in, they are in for good.”

 

* The original version of this story incorrectly said that Mr. McKay no longer held the post. It has been corrected.

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