Posts Tagged ‘New Zealand’

Germany looks to ban Huawei from 5G

January 17, 2019

Berlin turns against Chinese telecoms supplier over security concerns

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By Guy Chazan in Berlin

Germany is looking at how to stop the use of Huawei products in the build of its 5G network, making it the latest western country to clamp down on the company over mounting security concerns.

The German government is considering introducing security requirements for 5G, the next generation of mobile communications, that would be harder for Huawei to meet. The initiative was first reported by the German daily Handelsblatt. A statement from the economics ministry said the security of the future 5G network and the safety of products offered by different telecommunications suppliers was “highly relevant” for the German government, and it would be “guided” by such concerns in its buildout of the network. But it also stressed that no decision had yet been taken on concrete measures.

The German move came at a time when the US has been actively lobbying countries to ban Huawei from developing 5G mobile phone networks on national security grounds, arguing that its technology can be used by the Chinese government for spying or cyber attacks. The tough new position is a shift from Berlin’s previous view of the company.

In October, Günter Krings, deputy interior minister, wrote to the Green MP Katharina Dröge that there was “no concrete legal basis” for excluding any particular equipment supplier from the 5G buildout in Germany “and none is being planned”. He said the German law on telecommunications was contained provisions that were “sufficient . . . to address possible security concerns”.

But as the deadline for Germany’s 5G buildout approaches, the government’s position has hardened. The 5G spectrum licences are to be auctioned this spring, and telecoms companies need clarity by then as to which suppliers they can work with.

Last month Deutsche Telekom said it would reassess its system for procuring network equipment. A spokesman told Handelsblatt that the company “takes the global discussion about the security of network elements made by Chinese producers very seriously”. Opposition MPs said they were pleased that the German government was finally taking security concerns over Huawei seriously.

“For too long, the government underestimated the explosive nature of this issue,” said Katharina Dröge. She called on ministers “to finally say publicly what they think of Huawei being involved in the 5G buildout.” The EU is also increasingly concerned about Huawei.

Andrus Ansip, the senior Brussels official on tech policy, recently warned that Chinese groups could be ordered by Beijing’s intelligence services to build “back doors” into their systems. Australia and New Zealand, which are members of the “Five Eyes” intelligence sharing network with Canada, the US and the UK, have already blocked Huawei from forming partnerships with local telecoms carriers.

The UK and Japan have also publicly distanced themselves from Huawei’s plans to supply 5G telecoms, a breakthrough technology that will allow objects such as fridges, cars and smartphones to “talk” to each other. This week Huawei’s founder and president Ren Zhengfei broke his silence over the allegations against the company, saying it had “never received any request from any government to provide improper information”.

The 74-year-old former Chinese army engineer also denied that China’s new national security law obliged Huawei to build back doors into its telecoms equipment in order to gather electronic intelligence. Huawei has also been thrown into crisis by the arrest of Meng Wanzhou, its chief financial officer and Ren Zhengfei’s daughter, on charges of breaking US sanctions against Iran as she tried to change planes in Canada.



U.S. Calls Canadian’s Death Sentence in China ‘Politically Motivated’

January 17, 2019
Beijing’s action poses global threat, Trudeau minister warns
Tensions escalate further in feud over Huawei executive
Robert Lloyd Schellenberg is seen at the Dalian Intermediate People’s Court in Dalian, China, in this photograph made available on Jan. 14, 2019.Source: Dalian Intermediate People’s Court

The U.S. State Department said a death sentence issued to a Canadian this week in China was a political decision, with Justin Trudeau’s top diplomat calling the detention of two other men a threat to all nations.

Foreign Minister Chrystia Freeland, speaking to reporters near Montreal, said Canada is in a “difficult moment” after the arrest of a top Huawei Technologies Co. executive last month in Vancouver on a U.S. extradition request. Nine days after that, a Canadian diplomat and a businessman were seized separately by state security officers in China.

Chrystia Freeland

Photographer: David Kawai/Bloomberg

“Our government has been energetically reaching out to our allies and explaining that the arbitrary detentions of Canadians aren’t just about Canada,” Freeland said Wednesday. “They represent a way of behaving which is a threat to all countries.’’

On Tuesday, she spoke about the escalating tensions with her U.S. counterpart, Secretary of State Mike Pompeo. His office backed Canada’s effort to increase international pressure on China in a summary of the call issued Wednesday morning.

Freeland and Pompeo shared their concerns over the detentions and the “politically motivated sentencing of Canadian nationals,” a State Department spokesman said in the statement. They also reiterated their “commitment to Canada’s conduct of a fair, unbiased, and transparent legal proceeding” in response to the American request to extradite Meng Wanzhou, Huawei’s chief financial officer and daughter of the Chinese telecom giant’s founder.

Meng Wanzhou in Vancouver on Jan. 10.

Photographer: Ben Nelms/Bloomberg

Death Penalty

Meng is free on bail pending her next court hearing. But Michael Kovrig, who was on leave from his foreign service posting in Hong Kong, and Michael Spavor, an entrepreneur who ran tours into North Korea, remain in Chinese custody. The third Canadian, Robert Schellenberg, had an earlier 15-year sentence on drug smuggling charges increased to execution after a Chinese court ruled on his appeal Monday.

Michael Kovrig

Source: International Crisis Group

“My first priority by far is to do everything in my capacity to secure the release of the two Michaels as quickly as possible, and to help to save the life of Mr. Schellenberg,” John McCallum, Canada’s ambassador to China, told reporters Wednesday evening before a meeting with Trudeau’s cabinet in Sherbrooke, Quebec.

“I have visited all three of them, I have spoken to all of their families, I will be speaking tomorrow to Mr. Schellenberg’s father, so I am determined to do what I can — and there are various things we are doing — to secure their release and his life. Our work is consumed every day by these priorities.”

Read more about Huawei’s founder breaking his silence on the case

Freeland and Trudeau have also sought support from President Donald Trump and leaders of other nations including Germany, Argentina and New Zealand. Those efforts have drawn fresh rebukes from Chinese officials.

The foreign minister is also talking with Canadian executives with operations in China about how to handle new tensions around international travel. China earlier this week matched a Canadian travel warning about the risk of arbitrary law enforcement.

Another sign of frayed relations came Wednesday with the Globe and Mail newspaper reporting that Canada has protested China’s questioning of Kovrig over his past diplomatic work in that country. Canada brought in Chinese Ambassador Lu Shaye to discuss the case, the newspaper said, citing unnamed officials.

Trudeau accused China last week of violating the principles of diplomatic immunity, and Freeland mentioned international support for that idea too. “Some of the statements from our partners have said that it’s very important that the Vienna Convention be upheld,’’ she said.

Chinese Foreign Ministry spokesman Hua Chunying has said repeatedly the immunity claim makes Canada a “laughing stock’’ because Kovrig entered the country on a business visa.


Strike by thousands of junior New Zealand doctors cripples hospitals

January 15, 2019

Nearly 80 percent of junior doctors across New Zealand walked off the job at public hospitals on Tuesday after a breakdown in union talks with the government over working conditions and wages.

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The strike spotlights the difficulties Prime Minister Jacinda Ardern’s government faces in delivering on its promise to pour money into social services and rein in economic inequality when it took office in 2017.

The center-left government’s traditional union support base says sluggish wage growth and soaring living costs have left workers struggling, with teachers, nurses and court officials taking action last year to demand pay hikes.

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Prime Minister Jacinda Ardern

“They want to have control over when we work, how we work and where we work,” said Dr Deborah Powell, national secretary of the junior doctors’ union. “We tried to resolve this without a strike but we were left with no choice.”

More than 3,300 government-employed junior doctors, of a national tally of 3,700, are staying away from hospitals and clinics after the talks broke down last week.

doctor with stethoscope

Some gathered at street corners holding placards calling for better working hours but there were no major demonstrations.

Thousands of surgeries, non-essential appointments, and other services have been canceled, although emergency and life-saving services will continue as senior doctors are asked to step in.

Government hospitals asked people to limit visits only to emergencies.

Junior doctors, or resident medical officers, want to stick with existing employment contracts because they say new terms the government proposes would mean longer shifts and allow doctors to be moved to other hospitals without notice.

Their union said it had been in talks with the District Health Board (DHB) for more than a year in which payment for overtime, weekend and night shifts were also discussed.

DHB spokesman Dr Peter Bramley disputed claims that the agency wanted to move doctors around the country at will.

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“DHBs are committed to being good employers supporting safe care and safe working conditions,” Bramley said. All DHBs would implement contingency plans to provide essential services during the strike, he said.

The union has already called for a second 48-hour strike for Jan. 29-30 in the hope of increasing pressure on the government.

The government is also holding talks to avert another strike this year by tens of thousands of school teachers after they rejected a pay offer.

Reporting by Praveen Menon; Editing by Clarence Fernandez and Paul Tait


Why Trump’s America is rethinking engagement with China

January 15, 2019

The more aggressive US approach is part of a strategic shift that goes well beyond the trade war

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By Demetri Sevastopulo in Washington

When Donald Trump sat down to dinner with Xi Jinping last month at the G20 summit in Buenos Aires, the US president did not know about the diplomatic bomb that was about to explode. At about the same time, police in Canada arrested a Chinese telecoms executive after an extradition request from Washington.

The detention of Meng Wanzhou, chief financial officer of Huawei, was extraordinary because the US justice department had not told the White House about the warrant to arrest the daughter of the founder of the telecoms group, one of China’s most successful and influential companies.

Donald Trump and Xi Jinping at a dinner meeting on Dec. 1 Photographer: Pablo Martinez Monsivais/AP

But the importance of the arrest went well beyond the immediate circumstances. It is the most striking symbol yet of the dramatic deterioration in relations between China and a US that is increasingly suspicious of Beijing’s motives and actions. Reinforcing the rupture, the US several weeks later charged two Chinese nationals with conducting a global hacking campaign to assist the Chinese intelligence services.

While the trade war has received the most attention, the economic tussle is part of a much more profound shift in the US that has seen Washington reverse important elements of the strategy of engaging with its Asian rival that was first introduced more than 40 years ago by Richard Nixon.

East meets West.  Photographer: Bloomberg/Bloomberg

Support for this change in approach has a broad base in the US. Officials across the US government have become significantly more hawkish towards China— over everything from human rights, politics and business to national security. At the same time, US companies and academics who once acted as a buffer against the harshest views are now far less sanguine.

“China has for some time underestimated the extent to which the mood in the US has shifted,” says Hank Paulson, the former US Treasury secretary. “

The attitude that they would implement reforms at a timetable that made sense to them missed the fact that this was no longer sustainable if they wanted the US to keep its markets open to them. And the US business community now supports a harder line.”

Hank Paulson at the Bloomberg New Economy Forum in Singapore on Nov. 7.
Photographer: Justin Chin/Bloomberg


While Mr Trump likes to describe China’s president Mr Xi as his friend, his White House signalled a major shift away from China when it labelled the nation a “revisionist power” in its December 2017 National Security Strategy.

In October, Mike Pence, vice-president, hammered home that message in a speech at the Hudson Institute that charged China with a litany of offences — from political repression at home to coercive diplomacy abroad. The rhetoric has been matched with action.

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U.S. Vice President Mike Pence at the Hudson Institute,  October 4, 2018

In the South China Sea, the US Navy is now conducting frequent freedom of navigation operations to push back against Chinese sovereignty claims over disputed reefs and islands. Meanwhile, the justice department created a “China initiative” task force to crack down on espionage.

While Ms Meng was arrested for allegedly helping her telecoms company violate US sanctions on Iran, US officials have long worried that Huawei could help China spy on rivals.

Those concerns escalated last year, culminating in the US convincing its Five Eyes intelligence-sharing partners — Canada, Australia, New Zealand and Britain — that they needed to take a much tougher line on Huawei, according to one person familiar with the situation.

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While concerns about China have risen in parallel with its emergence as a rival to the US, Washington has concluded that it has underestimated the speed at which it has caught up with the US in terms of technology — particularly technology with military applications.

Dennis Wilder, former head of China analysis at the CIA, says that as the US war on terror has receded in urgency, intelligence and national security officials have now woken up to the fact that China was using a “whole-of-society” approach to collecting intelligence, and that the openness of the west to Chinese scientists, students and business people had become an “Achilles heel”.

“The Chinese intelligence operations were astoundingly successful in providing the military and other state-owned enterprises with the secrets to enable technological leaps that could only be possible with the theft of advanced critical technology from the US, Japan and Europe,” Mr Wilder says.

Mr Trump and his trade war have done a lot to change the mood but many experts say China would have faced a harsher climate regardless of whether he had won the 2016 election. One of the few areas where Democrats and Republicans are united is over the need to adopt a tougher stance towards Beijing.

Lindsey Ford, a former Pentagon official under Barack Obama, says US military officials started to become much more concerned about China in the second half of his administration, when it appeared that Mr Xi was abandoning the “hide and bide” low-profile approach espoused by former leader Deng Xiaoping.

This was most striking in the rapid land reclamation in the South China Sea, where it installed weapons systems on some islands despite Mr Xi having pledged to Mr Obama in 2015 that China had “no intention to militarise” them.

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U.S. President Donald Trump with his guest Xi Jinping at Mar-a-Lago, April 2017

Ms Ford says the South China Sea activity was “the clearest signal that the game seemed to have shifted and that China’s own calculations about how much risk it was willing to accept . . . was no longer the same”.

At the same time that its navy has become more assertive, China has developed weapons-related technologies at a much faster pace than many US analysts once thought likely. Underscoring how the gap between the US and China has shrunk, General Paul Selva, vice-chairman of the joint chiefs of staff, warned in June that “if we sit back and don’t react, we will lose our technological superiority in 2020”.

The Pentagon is also concerned about the vulnerability of its military supply chains because of components made in China. Washington is raising red flags about activities aimed at stealing US technology — whether via Chinese nationals working in American university labs or cyber espionage.

One person familiar with the situation says US officials realised how much more vigilant they needed to become when they discovered just how much similarity there was between the Chinese J-20 stealth fighter jet and the American F-35. To tackle the threat, the US has significantly stepped up the vetting of Chinese nationals who apply to study sensitive subjects in America.

Christopher Wray, FBI director, last year warned Congress that US universities were naive about the potential for Chinese nationals to collect intelligence on their campuses.

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John Demers, assistant attorney-general for national security at the justice department, says 90% of economic espionage cases against the US in the past seven years have involved China © Bloomberg

John Demers, head of the justice department’s China Initiative, recently told the Senate judiciary committee that 90 per cent of economic espionage cases over the past seven years involved China. When the US charged the hackers in December, it said Beijing had breached a 2015 deal that neither nation would steal intellectual property for commercial advantages.

The US is also concerned about China trying to recruit American spies. In his testimony, Mr Demers said the justice department had an “unprecedented” three cases against former US intelligence officers accused of spying for China. In May, the US charged a former CIA operative named Jerry Lee with illegally possessing secret information.

The CIA believes he provided Beijing with details about its spying operation in China. One person familiar with the situation says his actions dealt a catastrophic blow to the CIA’s network — as many spies were arrested or executed.

Mike Pence, US vice-president, has hammered home the American message that China is a ‘revisionist power’ © AP The US also believes that two suspected Chinese cyber attacks — one in 2015 on the Office of Personnel Management which maintains government employee records, and another later on the Marriott hotel group — were part of an operation designed to help China identify covert US intelligence operatives in the country.

As the US strikes a tougher tone, China is losing constituencies that once helped balance the more hawkish views in security circles. US academics who were seen as friendly to China are becoming warier as Beijing cracks down on human rights — such as the mass detention of Uighurs in Xinjiang, failures to follow through on economic pledges, pressures on US scholars to toe the party line and moves backwards in terms of political reform.

“People I’ve known for decades have given up on China,” says Susan Shirk, chair of the 21st century China Center at the University of California San Diego.

“There’s a widespread view in the academic community that the overreaching China has done both domestically and internationally is hard-baked into the system and that there’s no hope of getting them to adjust their behaviour to our interests and values.”

A turning point that alarmed Washington came in late 2017 when Mr Xi did not name a successor at the Communist party’s 19th congress. He also pledged that China would become a fully modern economy by 2035 — picking a date that some saw as another sign that he intended to remain in power following his second five-year term. In a further sign of centralising power, the National People’s Congress approved last March a change in the constitution to remove the two-term limit on the presidency.

More recently, Mr Xi reignited concerns that he was moving backwards on promised reforms when he used a speech commemorating China’s economic opening 40 years ago to stress the primacy of the party. “No one is in a position to dictate to the Chinese people what should or should not be done,” he said in December. One senior US administration official says China has misread the change of mood in the US, adding that “even more disturbingly, they just don’t care”.

The official says the fact that Mr Xi’s speech had focused on “the growing role of the Communist party in every aspect of economic, political and personal life in China” suggested that Beijing was not taking the US concerns seriously.

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F-35B stealth fighter

“I don’t see signs of a course shift by the top leadership,” says the official. “I never thought China would aspire to be a Jeffersonian democracy or espouse the western liberal order,” says Mr Paulson.

“I always thought the Communist party would be paramount, but I didn’t see the clock being turned back.” Ms Shirk says a major reason for the growing US backlash is that the business community has “really soured on China”. “Right now, it is totally out of balance because the national security concerns are completely dominating the process and the business community isn’t resisting,” she says.

Ryan Hass, a former White House official now at the Brookings Institution, says many US companies had “promise fatigue”. While many did not agree with the approach Mr Trump was taking on trade, they wanted him to be tough on China on market access and were “trying to use Trump’s instincts for disruption [to] their advantage”.

“The Chinese leadership has promised for years that reform was around the bend and then you see things like President Xi’s speech where he emphasised the central role of the party,” says Mr Hass. “Members of the business community see the Trump administration as an opportunity for the US to rattle the cage in Beijing.”

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Former state department official Susan Thornton says the wider relationship with China is being ignored inside the administration © Bloomberg

Susan Thornton, the top Asia official at the state department until last summer, says many of the grievances had existed for years but Mr Trump was giving them impetus because there was no one inside his administration who was weighing those concerns against the broader China relationship.

“There is no one imposing discipline right now. Everybody has now got a hunting licence. It is open season on China,” says Ms Thornton. One reason the Chinese may have been blindsided by the changing US approach is that Mr Trump rarely raises security issues.

“Trump never brings up any of that stuff in meetings with the Chinese,” she says. “He won’t bring up Taiwan or the South China Sea, or nuclear missiles or arms control, or espionage.”

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Mr Trump tweeted that he had spoken to his Chinese counterpart and that there had been “big progress” on trade.

But the landscape has changed so dramatically that most China experts believe the relationship will become much more rocky even if there is an agreement on trade. “I am cautiously optimistic that President Trump will be able to declare a trade victory and end the tariff war,” says Mr Paulson.

“But there will still be so many intractable economic and security issues that this will continue to be a very fraught relationship.”

Amid Growing Global Scrutiny of Huawei, Poland Makes An Arrest

January 11, 2019

“Poland is Huawei’s base camp in the region.”

Detention follows a U.S. push to dissuade allies around the world from using Huawei gear

The Huawei logo
Officers of Poland’s counterintelligence agency this week searched the local Huawei office. Above, a Huawei ad in Warsaw. PHOTO: JAAP ARRIENS/NURPHOTO/ZUMA PRESS

Polish authorities detained and charged a local sales director of Huawei Technologies Co., a Chinese national, with conducting high-level espionage on behalf of China, amid widening global scrutiny by Washington and its allies of the technology giant.

The arrest is another bombshell for Huawei, following the early December detention of the company’s chief financial officer in Canada, at the U.S.’s request, on charges related to Iranian sanctions. Unlike those allegations, the nature of the charges in Poland speak directly to suspicions by Washington and other Western governments that Huawei could be used by Beijing as a global spying tool.

For years, Washington has labeled Huawei a national security threat, saying it could be forced by China to use its knowledge of the telecommunications equipment it sells around the world to tap into, or disable, foreign communications networks. Huawei has denied that forcefully through the years. Part of its defense has been that it hadn’t been implicated in overseas spying allegations.

Officers of Poland’s counterintelligence agency this week searched the local Huawei office, leaving with documents and electronic data, as well as the home of the Chinese national, said Stanislaw Zaryn, a spokesman for Poland’s security coordination office. The Chinese individual wasn’t named, but was identified by Polish state television as a graduate of one of China’s top intelligence schools, as well as a former employee of the Chinese consulate in the port city of Gdansk.

People familiar with the matter identified him as Weijing Wang. He is known in Poland as Stanislaw Wang, according to these people and a public LinkedIn page that matches his biographical details.

A person who knew Mr. Wang described him as a well-known figure in local business circles, often spotted at events sponsored by Huawei in Poland. “He spoke great Polish,” this person said. “He was a really well-known Chinese guy in Poland and was always around.”

Before taking over as a Huawei sales director in the country, Mr. Wang was Huawei’s public-relations director in the country, according to this person and the LinkedIn page.

Why China's Huawei Matters

Why China’s Huawei Matters
Chinese telecom giant Huawei has long caused tension between Washington and Beijing. WSJ’s Shelby Holliday explains what the company does and why it’s significant. (Photo: Aly Song/Reuters)

In Poland, Mr. Wang worked in Huawei’s enterprise division, handling sales of information-technology and communications equipment to government customers, according to people familiar with the matter. That business area sometimes involves a higher level of scrutiny than others, given that the buyers are in the government, one of these people said.

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As part of the same investigation, Poland’s Internal Security Agency also detained one of its own former officials, a Polish citizen who was deputy head of the agency’s IT security department. That person, who wasn’t publicly identified, had knowledge of the inner workings of the Polish government’s encrypted communications network, which is used by its top officeholders, the state broadcaster said.

Both men have been charged with espionage, according to Mr. Zaryn. The crime carries up to 10 years’ imprisonment. They have pleaded not guilty.

“Huawei is aware of the situation, and we are looking into it,” a spokesman for the company said. Huawei said it complies with laws and regulations in the countries where it operates, and requires employees to do the same. A Chinese Foreign Ministry statement said Beijing “is highly concerned about it. We require relevant countries to handle relevant cases fairly and in accordance with law,” the statement said.

Polish counterintelligence officers also searched the offices of French telecommunications carrier Orange SA, said Mr. Zaryn.

Orange said it was aware of the search of its offices in Poland. In a statement, the company’s local unit said it had handed over belongings of one of its employees. “We have no knowledge if there is any relation of these actions to his professional duties,” it said. Orange said it was cooperating with the probe.

The Polish national who was arrested had previously worked for Orange, according to state-owned television. Mr. Zaryn declined to discuss the personal details of the Polish citizen, but said he was a veteran of the country’s intelligence and law-enforcement agencies who had held director-level positions in several.


“He was in many different institutions,” he said. That included the police and Poland’s secret services. The individuals were detained on suspicion of espionage earlier this week. A judge has ordered them detained for three months, Mr. Zaryn said.

Mr. Zaryn said Poland acted alone in the probe. “I do not think there was any international cooperation in this investigation.”

Last month, Canadian authorities, at the behest of U.S. officials, arrested Huawei CFO Meng Wanzhou on charges she lied to banks about the company’s business in Iran. Ms. Meng denies the charges.

In 2012, a U.S. congressional report labeled Huawei a national security threat, a finding the company said was politically motivated. Huawei has long denied that it is a spying threat, saying that it is owned by its employees and operates independently of Beijing.

The congressional report all but shut the telecom-gear and smartphone maker out of the U.S. market. Still, it flourished overseas, quickly eclipsing Western rivals like Nokia Corp.and Ericsson AB as the world’s biggest seller of telecom gear—equipment like cell towers and switches that enable mobile networks.

For much of last year, American officials redoubled efforts to limit sales of Huawei gear in the U.S. Some small American carriers, particularly rural ones, use the gear, partly because it is cheap.

Washington also started more recently to press allies aggressively to avoid using Huawei gear. Australia has also been out front raising public concern about Huawei equipment. A number of countries, including Australia, the U.K., Germany, New Zealand and Japan have agreed to review their telecom-gear supply chain, or have specifically restricted the sale of Chinese equipment, in the wake of the new scrutiny.

The push from Washington comes as many carriers around the world are starting to roll out 5G, the latest generation of mobile-telecom technology that promises faster connections and is envisioned to help enable internet connections for everything from factories to toothbrushes.

Last month, Germany’s Deutsche Telekom AG announced the launch of the country’s first fully functional 5G network using equipment from Huawei.

Poland has been Huawei’s top market in Central and Eastern Europe, and its ambitions to roll out 5G equipment in the region have gone farther in Poland than most places outside China. Last year, the government named the company an official partner of its 5G strategy. In September, Huawei and Orange’s local unit began installing the first test antennas of a 5G network the two companies hoped to launch together. In November, the prime minister’s office said Huawei would build a science-and-technology center in the capital. It already runs a research-and-development center there.

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“Poland is Huawei’s base camp in the region,” said Mo Jia, an analyst at Canalys. “And this market is very critical to Huawei’s smartphone business.”

Counterintelligence agencies elsewhere in the region, however, have issued unusually public warnings against Huawei for years, part of broader international scrutiny on cyber vulnerabilities in what is the North Atlantic Treaty Organization’s eastern flank, a front line for cyberattacks against U.S. allies. As far back as 2013, the Czech Security Information Service, a domestic security agency, suggested excluding Huawei from public tenders and said the company might be installing backdoors on its equipment to allow outsiders to log into government computers from elsewhere.

Besides telecom equipment, Huawei is also the world’s No. 2 smartphone maker, behind South Korea’s Samsung Electronics Co. , and has been a top player in Poland’s market for the devices. Until as recently as the first quarter of 2018, it was the top seller of smartphones there, though has more recently been edged out by Samsung, according to research firm IDC.

Hope for the best and prepare for the worst.   Photographer: JUNG YEON-JE/AFP

Write to Drew Hinshaw at and Dan Strumpf at

U.S. Blocks Some Exports From Huawei’s Silicon Valley Unit

January 10, 2019

R&D unit Futurewei is no longer able to send home some technologies developed in U.S.

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About 700 engineers and scientists work at Futurewei’s flagship R&D center in Santa Clara, Calif., which opened in 2011. PHOTO: YICHUAN CAO/SIPA USA/ASSOCIATED PRESS

Huawei Technologies Co. is contending with a new obstacle: getting technology it developed at a U.S. subsidiary back to China.

The Chinese telecommunications giant has been unable to send home certain technologies from its Silicon Valley research-and-development unit, Futurewei Technologies Inc., after the Commerce Department signaled it wouldn’t renew a Futurewei export license, according to people familiar with the matter and documents reviewed by The Wall Street Journal.

The department said in a June letter to Futurewei that it intends to deny its application to renew the license, citing national security concerns, according to the documents. Futurewei has contested the Commerce Department’s move, but in the meantime the export of the technologies in question has been prohibited, the people said.

The license covered the export of telecommunications technology and software, including high-speed data-transfer technology, according to the documents. The technology had an operating budget of more than $16 million and involved more than 40 full-time-equivalent personnel.

The Commerce Department’s move isn’t a death blow to Futurewei because the majority of technologies the unit exports from the U.S. don’t require an export license, according to people familiar with the matter. The company continues to operate in the U.S.

Still, the move is a setback for Huawei’s U.S. operations. About 700 engineers and scientists work at Futurewei’s flagship R&D center in Santa Clara, Calif., which opened in 2011. Huawei, the world’s largest maker of telecommunications equipment, is embroiled in a separate battle following the arrest of its chief financial officer, Meng Wanzhou, in Canada last month at the request of U.S. officials.

Futurewei told the Commerce Department in a July letter protesting the decision that it might have to move its R&D hub to a location outside the U.S. if its application isn’t approved, according to the documents reviewed by the Journal.

“The process for granting export licenses is independent from our ongoing trade discussions with China,” Commerce Secretary Wilbur Ross said in a statement to the Journal.

In its June letter to Futurewei, the Commerce Department’s Bureau of Security and Industry said it intended to deny an application to renew an export license that the Chinese company had held since 2014 that was set to expire in April 2018, according to the documents reviewed by the Journal.

In its July response, Huawei called the department’s national security rationale unfounded. It also said the technologies in question are already widely available outside the U.S.

Huawei still has avenues to appeal the decision, according to people familiar with the matter. Its timeline for doing so isn’t clear.

Huawei has been effectively blocked from selling its telecommunications equipment in the U.S. since a 2012 Congressional report labeled it a national security threat. Huawei has long denied that it is a threat, saying it is owned by its employees and operates independently of Beijing.

The company maintains a modest presence in the U.S., where it employs about 1,500 people. Many are involved in sales of telecom equipment to small carriers servicing rural areas. But the company has scaled back its public-relations outreach and curtailed efforts to communicate with Congress and federal agencies, people familiar with the matter have said. It has redirected its fight to the courts, hiring additional law firms to deal with potential challenges.

Recently, the U.S. has been pressuring allies to keep Huawei equipment out of their networks. Huawei faces a ban on its 5G equipment in several allied countries where it has long enjoyed access, including Australia and New Zealand.

The U.S. campaign against Huawei escalated in December with the arrest of Ms. Meng. Prosecutors want her to stand trial in the U.S. on charges of bank fraud related to Huawei’s business in Iran. Ms. Meng denies the charges, and Huawei says it follows the law in all countries where it operates.

Huawei has continued to post strong growth despite the challenges. Guo Ping, Huawei’s deputy chairman, said in a year-end letter that the company’s expected revenue grew 21% to $108.5 billion in 2018.

Write to Dan Strumpf at and Kate O’Keeffe at

Australia police examining suspicious packages at 10 consulates

January 9, 2019

Officials in Melbourne say they are responding to multiple ‘hazardous material’ events in the city

Hazmat and fire crews work outside the Indian and French Consulate in Melbourne, Australia Wednesday, Jan. 9, 2019. (Kaitlyn Offer/AAP Image via AP)

Hazmat and fire crews work outside the Indian and French Consulate in Melbourne, Australia Wednesday, Jan. 9, 2019. (Kaitlyn Offer/AAP Image via AP)

SYDNEY (AP) — Several foreign consulates were evacuated in the Australian cities of Melbourne and Canberra on Wednesday after they received suspicious packages.

Police, fire crews and ambulances were seen at a number of diplomatic offices in Melbourne, including those of India, Germany, Italy, Spain and South Korea. The government Vic Emergency website noted at least 10 “hazardous material” incidents in the city.

“The circumstances surrounding these incidents are being investigated,” the Australian Federal Police said in a statement.

The Australian Broadcasting Corp. reported suspicious packages were also found at the Melbourne consulates of the United States, Switzerland, Pakistan and New Zealand, and possibly those of Greece, France, and Hong Kong.

It was not immediately known which countries’ diplomatic missions in the national capital, Canberra, were affected.

The ABC reported one New Zealand consulate worker had said the packages in question were envelopes labelled “asbestos.” Inside were plastic sandwich bags containing a fibrous material.

Two firetrucks, a hazardous materials vehicle and police cars were seen at India’s consulate in Melbourne, where staff members had been evacuated, some wearing protective masks.

Staff were later allowed to re-enter the building, which was deemed safe by Vic Emergency, the collective body of emergency agencies in Victoria state, of which Melbourne is the capital.

The incidents come after Sydney’s Argentinian consulate was partially evacuated on Monday after reports of a suspicious substance. The powder, contained in clear plastic bags within an envelope, was subsequently deemed not dangerous.


Suspicious packages sent to several foreign embassies in Australia

January 9, 2019

Australian authorities are investigating several suspicious packages sent to some foreign embassies in Melbourne, including the U.S., British, Swiss and German diplomatic missions, domestic media reported on Wednesday.

Images taken by 9News showed firefighters and paramedics attending the Indian and U.S. missions in Melbourne, Australia’s second-largest city. There were no immediate reports of any harm to staff.

An office block with firefighter crews out front and a Greek flag waving.

Authorities are investigating after suspicious packages were found by several foreign consulates in Melbourne.

Authorities are investigating after suspicious packages were found by several foreign consulates in Melbourne.

Police in the southern state of Victoria, of which Melbourne is the capital, did not comment immediately when contacted.

A spokeswoman for the British High Commission confirmed its office in Melbourne had received a suspicious package.

“We are liaising closely with the AFP (Australian Federal Police) and the local authorities regarding the situation,” she said.

“All our staff are safe and accounted for,” she said.

Reporting by Swati Pandey and Colin Packham; Editing by Paul Tait



Footage showed emergency services workers attended the US, Greek, French, Italian, Hong Kong, Indian, New Zealand, Pakistan and Swiss consulates.

One official from Pakistan’s consulate told the ABC that she opened a suspicious envelope at 10:00am, which appeared to contain asbestos.

Emergency service vehicles on the street.

She told the ABC she was “scared of what might happen”.

The official said she was told by the authorities to wash her hands.

The Australian Federal Police (AFP) said it was aware of the incident.

“The packages are being examined by attending emergency services,” a spokeswoman said.

“The circumstances surrounding these incidents are being investigated.”

The Metropolitan Fire Brigade (MFB) said it was assisting police.

More than a dozen hazardous material alerts have been issued on the VicEmergency website.

Manuela Erb, the honorary consul of the Consulate of Switzerland in Melbourne, told the ABC that they had received a suspicious package at their Ashwood address.

“It’s believed to be non-hazardous, however they’re treating it as a hazardous,” she said.

More to come.

Topics: foreign-affairsgovernment-and-politicspolicecrimelaw-crime-and-justicemelbourne-3000,

EU eyes tougher scrutiny of China cyber security risks

January 2, 2019

Brussels wants to strengthen safeguards for companies as 5G auctions loom Huawei has pledged to invest $2bn to address serious security risks the UK believes exist in its equipment and software

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Michael Peel in Brussels

The EU is looking to toughen scrutiny of potential security risks with Chinese technology companies in the wake of growing concerns about cyber theft and cyber espionage allegedly linked to Beijing.  Brussels wants to step up efforts to map Chinese electronic infrastructure in the bloc, after pressure from Washington and growing unease in capitals from Berlin to Tokyo.

“A number of like-minded countries are increasingly concerned about China’s behaviour in this [cyber]sphere,” said one western diplomat, who pointed to the importance of upcoming 5G mobile communications spectrum auctions in Europe. “EU countries, including Spain, Italy and Finland, held 5G auctions in 2018, with a clutch of others scheduled for 2019. The sales can raise billions of euros for government. We are urging everyone to avoid making any hasty moves they might regret later.”

The US justice department charged two Chinese nationals late last month with conducting a global hacking campaign, on the heels of accusations that a group linked to the People’s Liberation Army had infiltrated the EU’s diplomatic communications system — an allegation that Beijing denies. We are urging everyone to avoid making any hasty moves [with 5G auctions] they might regret later Western diplomat Earlier in December, Meng Wanzhou, Huawei’s chief financial officer and daughter of the telecoms group’s founder, was detained at Vancouver airport after an extradition request by the US over alleged violations of Iran sanctions.

Huawei has said it is not aware of any wrongdoing by Ms Meng.

EU diplomats say that alarm raised by countries such as the US, Japan and Australia about growing Chinese business involvement in crucial technological infrastructure has dovetailed with rising European fears.

Concerns about growing Chinese dominance have been fuelled by corporate takeovers such as the €4.5bn acquisition of Kuka, a German maker of industrial robots, by China’s Midea in 2016.  But attempts to co-ordinate EU efforts have been hampered by the desire of governments to be free to manage tenders such as the lucrative auctions of 5G spectrum to mobile phone networks. Huawei is a leading candidate to supply 5G equipment to these networks.

“It’s quite a serious strategic problem for the EU and we haven’t properly mapped the exposure,” said one EU diplomat. “The problem is every country is interested in the 5G auction because it’s a massive payday.

Once these auctions have happened you need to avoid a situation where you end up with the entire continent being with one [equipment] provider.” The security fears around 5G stem from the possibility that the technology could become deeply embedded in societies through its use for applications ranging from road and rail management to controlling household devices.

Behind The Money podcast Behind The Money podcast Huawei and the fight for 5G

Diplomats say Brussels could also play a role in vetting and highlighting effective security measures in areas such as equipment supply chain transparency, monitoring and inspections.

They stress that taking reasonable precautions need not mean blanket bans on Chinese businesses — though some countries already favour a tough line. Germany last month toughened its rules on foreign investment in sensitive sectors including telecommunications.

The western diplomat acknowledged that finding the right way to deal with Huawei and other Chinese companies would be a “complicated matter”. There would not necessarily be a “cut and dried ready-made solution”, given Huawei’s offer of “a reasonably good kit at reasonably good prices”.

Andrus Ansip, the top European Commission official on technology policy, has warned that EU countries needed to be worried about Huawei and other Chinese companies, because they could be ordered by intelligence services in Beijing to carry out actions such as building electronic “back doors”.

Huawei, whose founder Ren Zhengfei is a former People’s Liberation Army officer, said it was “surprised and disappointed” by the comments. It rejected “any allegation that we might pose a security threat”.

Recommended Person in the News Ren Zhengfei: Huawei’s general musters for a fight

Huawei has pledged to invest $2bn to address serious security risks the UK believes exist in its equipment and software.

The US, Australia and New Zealand have also restricted the company’s activities on national security grounds.  The Chinese foreign ministry said last month that it would be “ridiculous” for foreign authorities to obstruct the “normal operations of businesses” because of “speculations” about security risks. It urged countries to “provide a fair, transparent and unbiased environment for Chinese enterprises seeking investment, operation and co-operation”.

Additional reporting by Mehreen Khan in Brussels

US urges Pacific allies to boost their military presence in South China Sea

December 29, 2018

The Pentagon is urging America’s Pacific allies to increase their military presence in the South China Sea in line with its own efforts to confront China.

Randy Schriver, the assistant secretary of defense for Asian and Pacific affairs, made the call during a recent interview with The Australian newspaper.

Chinese influence operations in the South Pacific, which have included donations to politicians and financing infrastructure projects in small island nations, have caught the attention of officials in Australia and New Zealand, and Schriver warned that the communists may want to establish military bases in the South Pacific.

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“I think what could potentially bring more pressure on the Chinese is other partners and allies joining in these activities [in the South China Sea],” he said. “If not freedom-of-navigation operations … just joint patrols, presence operations.

U.S. freedom-of-navigation operations are a challenge to Chinese territorial ambitions that have seen military facilities and equipment such as aircraft and missiles placed on artificial islands claimed by neighboring nations.

American ships involved in the operations have clashed with Chinese vessels. In August, for example, a Chinese warship almost collided with the USS Decatur, a destroyer, near the disputed Spratly Islands.

“There have been several public accounts of Australian activities in the South China Sea and some of the assertive challenges [to Australia] from China,” Schriver said.

In April, three Royal Australian ships transiting the South China Sea on their way to Vietnam were harassed by Chinese navy vessels.

In September, the HMAS Melbourne, a guided-missile frigate, traveled through the Taiwan Strait. The USS Mustin and the USS Benfold had passed through the strait two months earlier.

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Schriver told The Australian that other U.S. allies, including Britain, France and Canada, have enhanced their military activities in the South China Sea.

“We’ve seen a lot more activity from other interested parties because I think there is recognition that an erosion of international law and norms in the South China Sea has implications globally,” he said.

U.S. allies are likely to respond favorably to the call to get tougher on China, said Paul Buchanan, an American security analyst based in Auckland, New Zealand.

Australia and New Zealand, major trading partners of China, are balancing economic and defense relationships he said.

“[The Australians] have to walk a tightrope with the Chinese, but, as of late, they have been a lot more forceful in pushing back,” Buchanan said, noting the recent moves to establish a military base on Manus Island, off the coast of Papua New Guinea, and the ban on Chinese telecom company Huawei participating in new 5G services in Australia and New Zealand.

The moves haven’t been met with major blowback from China, Buchanan added.

In March 2018, the French Navy announced that Floréal-class surveillance frigate Vendémiaire conducted a patrol in the South China Sea to assert French presence in the region.

“China may realize that what is happening is that they are shoring up a defensive alliance, whereas before there were differences [between America and its allies],” he said. “Now there seems to be a coordinated effort to push back … particularly in the South China Sea [where China’s behavior] … is seen as egregious.”

In contrast to the Western powers, Japan’s relations with China are thawing.

Japanese Prime Minister Shinzo Abe agreed with Chinese President Xi Jinping in October to resume mutual naval visits.

Japan’s Maritime Self-Defense Force may join the Chinese navy’s fleet review in April, the Japan Times newspaper reported recently.

The visit to the city of Qingdao marking the 70th anniversary of the founding of China’s navy would be the first by a Japanese warship since 2011, the newspaper reported.

U.S. Navy officials did not indicate whether an American ship would participate.

“As a matter of policy, we do not discuss future operations,” Pacific Fleet spokeswoman Navy Lt. Rachel McMarr said in an email Friday.



South China Sea code of conduct talks may not all be plain sailing next year

Collin Koh says talks between Beijing and Asean on a code of conduct will continue, but while they do it may be well be business as usual for interested parties

PUBLISHED : Saturday, 29 December, 2018, 7:01am
UPDATED : Saturday, 29 December, 2018, 9:20am
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As 2018 draws to a close it is necessary to take stock of what happened this year with an eye on the next.

To be fair, much has been achieved as far as Asean and China are concerned, especially over the South China Sea disputes.

The single draft negotiating text for the proposed code of conduct was agreed and the inaugural Asean-China Maritime Exercise was held.

So far, since the September near miss between the Chinese and United States navies in the Spratlys, there have been no further reported incidents.

But what developments can we expect in the coming year? To be sure, Asean and China will proceed with the negotiations on the code of conduct in early 2019, a process Beijing had earlier proposed would take up to three years.

Much may happen throughout the course of the negotiations, and in the absence of a provisional agreement restraining each negotiating party from doing things that may stymie the talks, it is prudent not to expect drastic changes.

Without such a mechanism, much will depend on the goodwill exhibited by each party through the exercise of self-restraint.

This means that some, if not all, South China Sea claimants will continue more or less with business as usual in and around the disputed waters.

Naval, air and coastguard patrols will surely continue. One key issue is the lack of a commonly accepted definition of “militarisation”. Without this, each concerned party – both claimants and non-claimants, including extra-regional powers – will persist with their varying and often conflicting interpretations, and seek ways to consolidate, enhance and strengthen their interests in the waters.

China will continue with its military build-up, training exercises and surveillance in the South China Sea, citing domestic political legitimacy, whereas the US is expected to conduct military activities, including freedom of navigation operations, on the basis of showing its commitment to regional security.

Regarding the latter, the questions are how often such operations will be conducted and whether the frequency will be more or less or the same as previous years, which could be (mis)construed as a reflection of US commitment.

Probably there is a low possibility that both sides will back down and scale back their activities for the sake of facilitating the code of conduct talks. Moreover, Beijing knows that Asean is highly motivated to push the talks towards its desired conclusion.

While this may not have been often well acknowledged, the truth is that China, not Asean, is in the driving seat of this process.

It can choose to delay, stymie or accelerate this process pursuant to its own interests.

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Other concerned stakeholders, not least states whose economic and strategic interests depend very much on freedom of navigation through the waters, may also continue to operate their military forces in the area.

For example, the coming third iteration of the Australian Defence Force’s Indo-Pacific Endeavour will require its naval flotilla to pass through South and Southeast Asian waters.

The Japan Maritime Self-Defence Force, through its Indo-Southeast Asia Deployment, will also need to continue to sail around the region, including the South China Sea.

It also remains uncertain whether the code of conduct will eventually be promulgated with parties outside the 11 governments negotiating the agreement, with future participation in mind.

Chances are, these non-signatories will at best give support in principle for the mechanism but not participate as a signatory. It may not be in their interests to sign up to a pact in which they played no part in the initial negotiations.

The question is also whether Beijing will allow their participation, during and following the conclusion of the code of conduct talks, since this move will conflict with its long-standing policy of not internationalising the South China Sea.

Seen in another way, it may even conclude that allowing these external parties to sign onto the code would legitimise their continued presence there.

It would be as if signing up to the code gives a free pass to roaming about freely in the sea – a prospect that Beijing still does not appear to be keen on.

Hence anticipated developments in the SCS in the coming new year will plausibly present a mixed picture, one that is characterised by coexistent parallel tracks of diplomacy in all forms – revolving around dialogue – as well as the exercise of “gunboat diplomacy” for muscle-flexing purposes.

Asean would have much to lose if the talks flounder, and the costs would not accrue as much to China, especially since it has strengthened its physical control in the disputed waters.

Whether the talks continue or conclude, Beijing may have concluded that the international presence in the South China Sea will persist anyway, whether it likes it or not.

In fact, 2019 will see more reasons for a continued international presence in the area.

Asean and the US are planning to conduct their first multilateral exercise – which falls outside the usual slate of US defence and security engagements in the theatre. Another multilateral naval exercise under the Asean framework, organised by Singapore and South Korea and in which Russia is expected to take part, is also in the works.

Japan may also enhance its existing defence and security engagements with its Southeast Asian partners as per its Vientiane Vision road map.

This includes the possible elevation of the Japan-Asean Joint Exercise for Rescue Observation Programme to a table-top exercise.

As such, we may expect talks on the code of conduct to go on, albeit as a process fraught with much uncertainty.

The contentious waters will continue to be crowded – with persistent military and coastguard activities continuing, including continued bilateral and multilateral engagements involving extra-regional players – and in the event of muscle-flexing, the risks of heightening tensions cannot be discounted for sure.

However, one thing we may expect is that following the near collision between the USS Decatur and the Lanzhou, and Asean leader’s open expression of concern, both Beijing and Washington (among others) should be cautious to avoid a repeat.

While the activities and counter-activities of the Chinese and US militaries continue in the South China Sea, both sides are likely to be careful to avoid inflaming matters – unless one overzealous commander decides to take matters into his own hands.

But even if that happens, the chances are that the parties involved in the incident would strive to de-escalate the situations and keep tensions from boiling over.

Collin Koh is research fellow with the Maritime Security Programme at the S Rajaratnam School of International Studies based in Nanyang Technological University, Singapore



Image result for china, south china sea, nine dash line, pictures

Above chart shows China’a “Nine Dash Line.” China says it owns all ocean territory north of the Nine Dash Line. There is no international legal precedent for this claim. On July 12, 2016, the Permanent Court of Arbitration in The Hague said this claim by China was not valid.