Posts Tagged ‘Ren Zhengfei’

One World, Two Internets: The Internet, Divided Between the U.S. and China, Has Become a Battleground

February 12, 2019

The global internet is splitting in two.

One side, championed in China, is a digital landscape where mobile payments have replaced cash. Smartphones are the devices that matter, and users can shop, chat, bank and surf the web with one app. The downsides: The government reigns absolute, and it is watching—you may have to communicate with friends in code. And don’t expect to access Google or Facebook.

On the other side, in much of the world, the internet is open to all. Users can say what they want, mostly, and web developers can roll out pretty much anything. People accustomed to China’s version complain this other internet can seem clunky. You must toggle among apps to chat, shop, bank and surf the web. Some websites still don’t seem to be designed with smartphones in mind.

The two zones are beginning to clash with the advent of the superfast new generation of mobile technology called 5G. China aims to be the biggest provider of gear underlying the networks, and along with that it is pushing client countries to adopt its approach to the web—essentially urging some to use versions of the “Great Firewall” that Beijing uses to control its internet and contain the West’s influence.

Battles are popping up around the world as Chinese tech giants try to use their market power at home to expand abroad, something they’ve largely failed to do so far.

New 5G networks may advance technologies such as driverless vehicles. Here, a video game aboard an autonomous 5G-connected bus at a South Korea media event.
New 5G networks may advance technologies such as driverless vehicles. Here, a video game aboard an autonomous 5G-connected bus at a South Korea media event. PHOTO: SEONGJOON CHO/BLOOMBERG NEWS

Some Silicon Valley executives worry the divergence risks giving Chinese companies an advantage in new technologies such as artificial intelligence, partly because they face fewer restrictions over privacy and data protection.

“The Chinese approach could well lead to some large-scale improvements like better health outcomes—benefits derived from the mass capture and analysis of data,” said Nick Clegg, the former British deputy prime minister whom Facebook Inc. hired to run its global policy and communications, in a Brussels speech last week. “But it could equally be put to more sinister surveillance ends.”

“The real choice,” he said, “is between an appropriately regulated tech sector, balancing the priorities of privacy, free speech, innovation and scale—and an alternative in which ingenuity runs roughshod over some basic guarantees of privacy and individual rights.” He and Facebook declined to comment further.

The divide is clear to people like Tom Pellman who straddle it. Mr. Pellman, a director in Washington, D.C., for an international risk advisory firm, spent a decade in Beijing from the mid-2000s. His company doesn’t use Slack, the messaging app, because China has blocked it. He circumvented the Great Firewall by cycling through virtual private networks, or VPNs, which can disguise activity from monitors until getting discovered and then blocked, he said. “It’s Whac-A-Mole.”

Beijing’s censorship is like its polluted air, he said: “You’re in it and it seems OK, then you leave and you realize how bad it was.”

Yet he loved WeChat, the app that can do multiple tasks, and missed it when he left China. “When I came back to the U.S. it was like coming back to the Stone Age,” he said. “Not being able to use WeChat , everything felt just old fashioned.”

Paying the metro fare using Tencent's WeChat in Shenzhen, China.
Paying the metro fare using Tencent’s WeChat in Shenzhen, China. PHOTO: ZHAO YANXIONG/VCG/GETTY IMAGES

These parallel universes have coexisted. In one, people buy goods on Amazon; in the other, it’s Alibaba. In the West, Alphabet Inc.’s Google is so popular it’s a verb, but you can’t Google in China—there’s Baidu for that. In London, Apple Pay can get you on the Tube; in Beijing, it’s Alipay. To do all this in one app in China, there’s WeChat, which lets a billion people also send texts, hail cabs and do many other tasks.

Beijing has blocked GoogleFacebook and other services, promoting domestic champions such as Alibaba Group Holding Ltd. and WeChat owner Tencent Holdings Ltd. Outside China, though, these giants haven’t had much success.

The 5G collision

The collision of these universes as 5G arrives is exacerbating conflict between the U.S. and China and could broaden the rift and drive more of the world into China’s cyberspace model.

Networks using 5G technology are expected to download movies on phones in seconds, help enable self-driving cars, and connect components ranging from pacemakers to factory machines to the internet. Military futurists say 5G may alter battlefields, connecting tanks and drones with artificial intelligence.

China is aiming to expand its zone with 5G. It is aggressively promoting 5G networks, establishing a body in 2013 composed of regulators, companies and scientists to design and control every aspect of the process. It built a state facility where anyone selling 5G equipment in China must test it.


A vehicle using 5G technology, displayed at a show in South Korea last year.
A vehicle using 5G technology, displayed at a show in South Korea last year. PHOTO: SEONGJOON CHO/BLOOMBERG NEWS

China’s 5G goal is to “win primacy,” said China’s leading proponent of the effort, Wu Hequan of the Chinese Academy of Engineering, last month, according to a transcript conference organizers posted. The government’s information office and the Cyberspace Administration, an internet regulator, didn’t respond to requests for comment.

That Chinese challenge has suddenly come to the fore because one giant has leapt the divide between the parallel universes. Huawei Technologies Co. is now the world’s biggest supplier of the equipment that goes into mobile-computing networks.

The 5G equipment itself won’t tilt the playing field—the gear is the plumbing of the internet, based on global standards that are agnostic as to what web developers and users run on it.

But many in Washington, from Congress to members of the national-security and intelligence communities, warn that Huawei’s Chinese ownership means Beijing could use the gear to spy on the world and more broadly be a camel’s nose under the tent to expand its influence.

Huawei has publicly rejected the accusations. Founder Ren Zhengfei in a media appearance last month said “I personally would never harm the interest of my customers…And my company would not answer to such requests.”

‘I personally would never harm the interest of my customers,’ says Huawei founder Ren Zhengfei, here at company headquarters last month.
‘I personally would never harm the interest of my customers,’ says Huawei founder Ren Zhengfei, here at company headquarters last month. PHOTO: QILAI SHEN/BLOOMBERG NEWS

Chinese officials and cybersecurity experts point to former National Security Agency contractor Edward Snowden’s allegations the agency installed surveillance backdoors in U.S.-made routers designated for export. The NSA didn’t respond to requests for comment. In the past, it has said in response that it takes care to ensure that innocent users of such technologies aren’t affected by U.S. intelligence gathering.

The U.S. has also accused Huawei of stealing trade secrets and violating sanctions, raising the possibility the Trump administration could cut its access to critical U.S.-made components. Huawei denies wrongdoing.

If that happens, said Paul Triolo, a former federal government analyst who heads up global technology research at risk consulting firm Eurasia Group, China could build a version of 5G that isn’t compatible with the U.S. network. “If the global supply chain for 5G really falls apart,” he said, “we would be in totally new territory.”

Huawei Deputy Chairman Ken Hu said it has amassed 13,000 suppliers and that: “If any link in this global industry chain is obstructed in an unusual way, that would have major impact on the development of the industry chain and even the economic development of countries involved.” Huawei declined to comment further for this article.

Deploying 5G widely at home before the West does could benefit Chinese tech companies, said David Chao, general partner at DCM Ventures, a Silicon Valley venture-capital firm that invests in China. Chinese companies could have a leg up by using their huge domestic market to develop new apps and hardware that flourish with the faster speeds. “It could sprout a whole generation of mobile services that take advantage of that,” he said, “and they may be exported to the western world.”

At the heart of the divide are differing views on how to manage the internet. The U.S. pushes the open model on which the internet was built. Beijing and like-minded countries such as Russia say states should be able to censor, spy on or otherwise control internet traffic within their borders.

A Huawei executive in Beijing at a launch of new 5G Huawei products.
A Huawei executive in Beijing at a launch of new 5G Huawei products. PHOTO: FRED DUFOUR/AGENCE FRANCE-PRESSE/GETTY IMAGES

Beijing has sold its internet model alongside Chinese-made telecom equipment in countries as distant as Vietnam and Tanzania as part of an effort to build what it calls a “Digital Silk Road.” Last year, Tanzanian officials followed up public praise for Chinese internet censorship by approving rules that threaten online content providers with fines and jail if they don’t take down “prohibited content” at government request.

Tanzanian information minister Harrison Mwakyembe said the government backs China’s vision of strict internet policing to protect national security and to prevent “moral degeneration.”

Government officials in India have been considering ways to shelter domestic tech firms from American companies such as Inc. and Facebook, much as China has protected its own startups. India’s telecom secretary, Aruna Sundararajan, said the idea is to promote Indian companies “to become global champions.”

Wang Huning, the Communist Party’s top official in charge of ideology and propaganda, at China’s annual conference for promoting ‘cyber sovereignty’ in 2017.
Wang Huning, the Communist Party’s top official in charge of ideology and propaganda, at China’s annual conference for promoting ‘cyber sovereignty’ in 2017. PHOTO: ALY SONG/REUTERS

To promote its notion of “cyber sovereignty,”China has lobbied at the United Nations for discussion of internet regulation to be limited to states, with industry and civil society relegated to the sidelines. In 2017 at a conference in China attended by Apple CEO Tim Cook and Google chief Sundar Pichai, the Communist Party’s top official in charge of ideology and propaganda, Wang Huning, praised Chinese President Xi Jinping for advancing China’s vision of the internet, saying it had “gained broad approval and positive responses from international society.”

Firewall rising

At first, with the internet’s spread, foreign companies were welcome in China and technology evolved faster than the government’s censorship capabilities. Google rolled out a censored Chinese-language version of its search engine. Amazon entered the market, and Chinese users flooded onto Facebook, YouTube and Twitter.

Chinese leaders took more control after the 2008 Beijing Olympics, reflecting fear of political dissent and concern Chinese businesses were struggling to compete online. Facebook, Twitter and YouTube were blocked in 2009. The next year, Google said it was no longer willing to censor search results, and it was blocked. The websites of several foreign news organizations, including The Wall Street Journal’s, are also blocked.

That left China’s search market to Baidu Inc. Alibaba vanquished eBay Inc., and its Alipay payment system gave it a lock on online payments, with foreign firms from PayPal Holdings Inc. to Visa Inc. blocked from providing payment services.

Outside China, Alibaba was an afterthought in many markets. Baidu shut down search engines in Japan and Egypt after investing in local-language products. An Alibaba spokeswoman said the company remains “fully committed to realizing our mission of making it easy to do business anywhere in this digital era.” A Baidu spokeswoman said the company still provides advertising and other services in Japan.

China's Huawei Indicted: Breaking Down the Charges

China’s Huawei Indicted: Breaking Down the Charges
The U.S. unveiled sweeping charges against Chinese tech firm Huawei in late January. WSJ’s Shelby Holliday breaks down the indictments.

Despite an aggressive marketing push featuring celebrities such as soccer star Lionel Messi, Tencent has struggled to expand WeChat overseas. Since January 2012, WeChat has been downloaded about 350 million times from Apple’s App store world-wide, according to research firm Sensor Tower Inc. About 83% of those downloads come from users in China and 17% from outside, according to Sensor Tower. Tencent didn’t respond to requests for comment.

Some Chinese tech champions have struggled overseas because they came late to markets where competitors such as Google and Facebook have a foothold.

Another factor is suspicion the companies may have links to the Communist Party. Ant Financial Services Group, owned by Alibaba founder Jack Ma, made a 2017 bid to enter North American financial services by acquiring Texas-based MoneyGram International Inc.The Committee on Foreign Investment in the U.S. rejected the deal last year. It also blockedBroadcom Inc.’s planned purchase of Qualcomm Inc., citing concerns it would weaken Qualcomm, a major competitor to Huawei in 5G patents.

In September, Mr. Ma recanted a pledge to create a million U.S. jobs, citing trade hostilities. He didn’t respond to a request for comment sent through Alibaba, which pointed to an interview Mr. Ma did in which he said “trade should be a propeller of peace.”

Washington’s effort to push back on the equipment side started years ago. It blacklisted Huawei and China’s rival ZTE Corp. in 2012, when the House intelligence committee concluded they weren’t free of Beijing’s influence. ZTE and Huawei have repeatedly said they aren’t a threat. The U.S. pushback escalated last month with a U.S. indictment against Huawei’s chief financial officer for allegedly playing a role in breaking Iran sanctions. Separately, prosecutors accused Huawei of stealing trade secrets. Huawei has denied wrongdoing in both cases and said it was unaware of any wrongdoing by the CFO, who has denied the allegations.


Czech Prime Minister Andrej Babis last month.
Czech Prime Minister Andrej Babis last month.PHOTO: MICHAL KAMARYT/CTK/ZUMA PRESS

Europe’s eastern flank is a particular battleground. In December, the Czech Republic’s top cybersecurity agency warned that sensitive data probably shouldn’t be carried over Huawei gear. But the country’s president, Milos Zeman, has criticized those findings. Last month, he took two senior Huawei executives on a tour of Prague’s castle and in a televised interview called Huawei spying allegations hysteria. His prime minister, Andrej Babis, has taken a differing view, saying Czech agencies and European Union leaders should take such allegations seriously. A spokesman for Mr. Babis confirmed his views. Mr. Zeman’s office declined to comment.

For now, motivated consumers in China can span the two internet worlds using workarounds such as smartphones with foreign SIM cards that connect to the outside internet, said Li Zhen, a Hong Kong market-research analyst who travels to China for business.

She senses the rift in the paranoia her Chinese contacts exhibit while talking on WeChat about potentially sensitive topics. “My friends in the government and media will talk in code, and it can take a long time to figure out what they’re saying,” she said. “Sometimes the topic is probably not so sensitive, but you never know.”

Write to Josh Chin at

Appeared in the February 9, 2019, print edition as ‘One World, Two Internets.’


Huawei Threatens US national Security — Newt Gingrich

February 3, 2019

The recent federal indictments of Chinese telecom giant Huawei and its affiliates lay out a frightening story of a foreign company illicitly manipulating and exploiting loopholes in the American business system.

By Newt Gingrich

The first indictment, filed in the Eastern District of New York, outlines 13 charges related to bank fraud, wire fraud, money laundering, violations of the International Emergency Economic Powers Act (IEEPA), and obstruction of justice. During Monday’s press conference about the indictments, Acting Attorney General Matthew Whitaker clearly described Huawei’s lies about its affiliations with an Iranian subsidiary, Skycom, which misled banks into conducting business that is illegal under US law. As Whitaker pointed out, Huawei has been allegedly deceiving and conducting illicit activities against the US government and global financial institutions for at least a decade, and this behavior “goes all the way to the top of the company.”

The second indictment was filed in Washington and details 10 charges related to theft of trade secrets, wire fraud, and obstruction of justice. This indictment describes how Huawei relentlessly attempted to steal the technology behind T-Mobile’s robot mobile phone testing system, Tappy. In this case, Huawei actually created an employee bonus program for those who engaged in stealing valuable and confidential information from their competitors.

Huawei 5G

Photographer: Visual China Group/Getty Images

These allegations are serious and alarming. Circumventing US sanctions against Iran—whose government chants “Death to America” and supports terrorist activities—undermines our national security interests. Engaging in activities that add to the estimated $225 billion to $600 billion that is lost every year to China through intellectual property theft is an attack on our economic interests.

As I describe in my upcoming book, Trump vs. China: Facing and Fighting America’s Biggest Threat, in order to comprehend the significance of these charges—and the substantial risks that Huawei’s alleged crimes pose to America’s national security and economic interests—we must look at the bigger picture.

Huawei was founded in 1987 by a former officer of the People’s Liberation Army—the Chinese Communist Party’s military arm. Since then, the company has become the world’s largest telecommunications equipment manufacturer—and the second largest smartphone maker.

Huawei has benefitted greatly from China’s subjectively discriminatory business policies and has raised significant security concerns among US government officials. In a hearing last February, intelligence officials, including the heads of the CIA, FBI, NSA, and the director of national intelligence, all agreed that they would not advise private American citizens to buy Huawei devices or services.

This week, FBI Director Christopher Wray said that America’s national security and economic security are threatened by “the immense influence that the Chinese government holds over Chinese corporations like Huawei.” According to Wray, “the potential for any company beholden to a foreign government, especially one that doesn’t share our values, to burrow into the American telecommunications market,” would allow “the foreign government the capacity to maliciously modify or steal information, to conduct undetected espionage or exert pressure or control.”

huawei, indictment, charges, newt, gingrich, chinaA pedestrian talks on the phone while walking past a Huawei Technologies Co. store on January 29, 2019. in Beijing, China.KEVIN FRAYER/GETTY IMAGES

It is also important to consider the worldwide rollout of 5G telecommunications infrastructure and Huawei’s current leading position in the development of this new revolutionary technology. A company exhibiting this type of illicit behavior and generating the level of concern that it has within the U.S. intelligence community should not be setting the global standards for the world’s telecommunications industry. Yet, Huawei is currently testing in, has memorandums of understanding with, or is a confirmed network or vendor for at least 80 countries around the world.

The reality is, whoever controls 5G ultimately controls the future. The emergence of this technology will be the cornerstone of the world’s advanced operational capabilities. It will be the key to connected infrastructure, autonomous vehicles, high tech factories, worldwide commerce, aircraft, and even our personal devices. This technology facilitates the ability to control critical infrastructure on a massive scale—which poses extraordinary security risks. It is not in the United States’ interest to have this emerging industry controlled by a foreign company or government which has already raised substantial security concerns.

Lastly, the emergence of 5G and these new connective capabilities will result in a massive influx of data. Already, China has a strict set of laws which force companies to cooperate with government surveillance initiatives. FBI Director Wray asserted that China’s cybersecurity law mandates that “Chinese companies, like Huawei, are required to provide essentially access upon demand [to the Chinese government] with little to no process to challenge that.” The Wall Street Journal reported that companies are “required to help China’s government hunt down criminal suspects and silence political dissent.”

So, imagine for a moment what could happen if companies, such as Huawei, operating in an increasingly surveillance-based state were allowed to dictate the rollout of the world’s global 5G network. What would it mean for Americans overseas, including our military men and women, intelligence operatives, diplomats, tourists, and students? What would happen if the United States did not press charges and allowed Huawei to continue on with their seemingly illegal activities in pursuit of profit and power?

The combined 23 charges in these indictments have made it clear that Huawei has threatened America’s national security and economic interests through illegal means.  Our justice system has to fully investigate and prosecute these allegations.

But the fight won’t end there.

Huawei is only one company that is closely connected to China’s communist government—which is fundamentally different from our own. Many others are currently positioning themselves to control the future of our technological world using unethical methods.

This is how America must start thinking about the challenge that the Communist Party of China poses to our national interests—this is not an isolated event. It is a part of a collective strategy where China’s government utilizes all available tools to advance its own agenda.

Therefore, the indictments against Huawei represent more than just the beginning of a legal trial. The United States has sent a bold message to Huawei, China, and to the world. It should continue to do so—especially with China.

Any attempt to cheat to advance an agenda that undermines our American values, security, or interests must not be tolerated. America must not idly watch as a company or government attempts to manipulate, control, and exploit American businesses and citizens for profit and power.

We must continue to actively promote and stand for a world order that is based on freedom, fairness, and honesty.

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Huawei Case Is a Shot From U.S. Directly At Chinese Elite

February 3, 2019

There’s an intriguing allegation contained in the 23-page U.S. criminal indictment unveiled this week against telecommunications giant Huawei and its chief financial officer, Meng Wanzhou.

It’s one of the “overt acts” alleged in count seven of 13 offences ranging from fraud to obstruction of justice: “Conspiracy to Defraud the United States.”

The indictment effectively accuses a senior vice president of the company of lying to U.S. Congress in September 2012 when he told an investigative committee “that Huawei’s business in Iran had not ‘violated any laws and regulations including sanction-related requirements.'”

That same House Intelligence Committee would go on to foreshadow the troubles currently facing Meng and the company her father built with a damning report on the activities and history of both Huawei and China’s other major telecommunications company: ZTE.

By Jason Proctor

The report included concerns both companies were violating international sanctions on Iran. In fact, last summer ZTE agreed to pay a billion dollar fine as part of a deal that saw it admit to selling equipment to both Iran and North Korea in defiance of the global community.

‘A personal shot at the Chinese elite’

So why no similar treatment for 46-year-old Meng, who is instead living under house arrest in Vancouver, facing the possibility of extradition to the U.S. and the prospect of up to 30 years in jail?

After all, it’s not like cash has never saved a top executive from punishment before.

U.S. justice officials held a news conference in Washington to announce indictments against Huawei and Meng Wanzhou for offences including bank and wire fraud. (Joshua Roberts/Reuters)

“This has become highly personal, when you start to go after the top leader and there’s jailings. I don’t think we’ve seen anything like that before in the case of sanctions evasions,” says Jonathan Schanzer, an author and analyst with the Washington D.C.-based Foundation for Defence of Democracies.

“In most cases, there is a deliberate attempt to avoid making this personal. To avoid going to the very top.”

Schanzer has written about the Manhattan trial of Turkish banker Mehmet Hakan Attila who was found guilty in 2018 of a range of financial crimes in a case that revealed that “tens of billions of dollars and gold moved from Turkey to Iran through a complex network of businesses, banks and front companies.”

He says it’s inconceivable top members of the Turkish government were not aware and complicit in Attila’s activities. And yet, none of them face the same kind of legal peril as Meng.

“This was done extremely publicly,” Schanzer says of her arrest. “This was done in a way that I think had to be seen as a personal shot at the Chinese elite. And I think as such, it has to be seen as a unique episode.”

‘Evasive, non-responsive, or incomplete answers’

As the indictment revealed, that episode dates back to at least 2007, when FBI agents interviewed Huawei founder Ren Zhengfei about his company’s activities in Iran.

Huawei is accused of fronting business in Iran with a “hidden” subsidiary called Skycom which it purported to sell to a third party. But U.S. prosecutors claim the whole affair was a shell game which ultimately saw Huawei retain remote control of Skycom while Meng induced bankers into moving money that should have been off-limits because of sanctions.

A U.S. congressional report found that Huawei gave “evasive, non-responsive or incomplete answers” to questions about the company’s activities. (Andy Wong/Associated Press)

It’s the same kind of smoke and mirrors obfuscation U.S. congressional investigators claimed they encountered in 2012 as they probed into Huawei’s history, in order to get a grip on the company’s plans for American expansion.

“The committee launched this investigation to seek answers to some persistent questions about the Chinese telecommunications companies, Huawei and ZTE, and their ties to the Chinese government,” the report reads.

“Huawei, in particular, provided evasive, non-responsive or incomplete answers to questions at the heart of the security issues posed.”

‘He will not describe his duties’

The mysteries revealed in the 2012 probe predate the foundation of Huawei in 1987 to a point five years earlier when Ren was asked to be a member of the National Congress of the Communist Party, a “once-in-a-decade forum through which the next leaders of the Chinese state are chosen.”

“Mr. Ren proudly admits that he was invited to that Congress, but he will not describe his duties,” the report reads. “Shortly after being given such a prestigious role, Mr. Ren successfully founded Huawei, though he asserts he did so without any government or Party assistance.”

Ren Zhengfei, founder and CEO of Huawei, was invited to be a member of the National Congress of China’s Communist Party in 1982. (Vincent Yu/Associated Press)

Likewise, the house committee found Huawei failed to explain how it could have received billions of dollars in support from Chinese state-owned banks without favouritism.

One executive claimed he had no knowledge of the phrase “national champion” — a term for companies selected by the state for success — despite the fact a slide show prepared for the committee by the company used the words several times.

‘An elite cyber-warfare unit’

Congress heard from former Huawei employees who claimed the company had disregarded patent law and violated immigration laws by having full time employees enter the U.S. on tourist visas.

“The committee also received internal Huawei documentation from former Huawei employees showing that Huawei provides special network services to an entity the employee believes to be an elite cyber-warfare unit within the (People’s Liberation Army),” the report reads.

According to a 2012 congressional report, a former Huawei employee provided documentation showing Huawei provides special network services to an alleged Chinese army cyber-warfare unit. (Joe Chan/Reuters)

Huawei has continuously denied all allegations — as have Meng’s lawyers denied any suggestion she was complicit in a scheme to violate sanctions against Iran.

The House Intelligence Committee concluded by recommending the U.S. “view with suspicion” the continued penetration of both Huawei and ZTE into the American telecommunications market.

‘The floodgates may have just opened’

Schanzer believes the indictment against Meng is a sign of frustration that — no matter how many damning reports and investigations — the Chinese state continues to act with impunity when it comes to business and .

“Something has fundamentally changed,” he says.”And I think the floodgates may have just opened here.”

Meng’s father, meanwhile, appears sanguine about the fate of both his babies: daughter and company.

In a rare round of media interviews in recent weeks, Ren told Chinese interviewers he believes the legal process will set Meng free. And he sees the fight to expand Huawei’s 5G network as a matter of “peaceful competition.”

He laughs with the air of a mogul who knows money talks. And hearing fellow (self-professed) billionaire President Donald Trump say he might intervene in Meng’s case is hardly likely to disabuse him of that notion.

But who knows, maybe U.S. prosecutors really are intent on sending an executive to jail.

And if she’s found guilty, they can put Meng right next to the bankers responsible for the 2008 economic crisis.

Huawei’s founder faces fight for company and family

January 30, 2019

Huawei founder Ren Zhengfei survived food shortages during China’s Cultural Revolution, but now the reclusive billionaire identified as “Individual-1” in a US indictment faces an existential fight for his family and company.

Ren, 74, founded Huawei in 1987 with just 21,000 yuan ($5,600) and watched it grow into a global behemoth with 180,000 employees operating in 170 countries, sales of 206 million smartphones last year, and revenue topping $100 billion.

Ren Zhengfei Ren founded Huawei in 1987 and watched it grow into a global behemoth

Ren Zhengfei Ren founded Huawei in 1987 and watched it grow into a global behemoth AFP/File

But broad criminal charges unveiled in the United States this week are now threatening to wreck his empire and put his daughter, Huawei’s chief financial officer Meng Wanzhou, behind bars.

The accusations dealt a blow to Huawei’s image just as the famously secretive company had mounted a media blitz to salvage its reputation, with Ren leading the charge to dispute espionage concerns.

Huawei’s PR department “says we’re at a stage of crisis transition, I need to make our customers understand us,” Ren told Chinese media this month.

“I’ve been forced” to speak out, he said.

Meng, who was arrested in Canada and faces a US extradition hearing in March, was charged with bank fraud and other crimes related to violations of Iran sanctions.

The company was also accused of stealing technology secrets from telecom operator T-Mobile USA.

While Meng’s father was not charged, the former Chinese army engineer also made an appearance in the indictment.

Identified as “Individual-1”, he “falsely stated” to FBI agents during an interview in July 2007 that Huawei did not conduct any activity in violation of US export laws or dealt directly with any Iranian company, according to the documents.

The US Justice Department says the indictment charges other individuals but they have not been apprehended and their names will remain concealed for now.

“The criminal activity alleged in this indictment goes back at least 10 years and goes all the way to the top of the company,” acting US Attorney General Matthew Whitaker said on Monday.

Ren — who is worth $3.4 billion, accordint to Forbes — was heading to Argentina at the same time as his daughter when she was detained in transit in Vancouver in December, but he took a different route.

“I left two days after her, and transferred in a different place,” he told Chinese media.

Avoiding countries with a US extradition treaty could be a problem for company executives just as Huawei battles to sell its telecom gear for the next generation 5G cellular networks.

Washington has mounted a fierce lobbying campaign to push allies to reconsider using the telecom giant’s equipment over security concerns.

– Cultural Revolution –

Distrust of Huawei stems in part from Ren’s background as a People’s Liberation Army engineer.

Ren joined the military during the Cultural Revolution years, when “complete chaos” reigned, he told international journalists at a roundtable this month.

His squad revamped a clothing factory in the northeastern city of Liaoyang, where they slept outside on the grass as temperatures dipped to minus 20 degrees Celcius, Ren said.

“There was no supply of fresh vegetables at all, so we had to pickle some vegetables like cabbages and radishes we got in autumn in large concrete pots, and rely on pickled foods for six months at a time,” he said.

His engineering talent in the military earned him praise and publicity and in 1978 a spot in the Communist Party. He was then selected to be a representative of the 12th National Congress of the Communist Party of China in 1982.

“As Meng Wanzhou’s father, I miss her very much,” Ren said. “Throughout her childhood, I was in the military, which means that each year I was away for 11 months, spending one month with my family.”

– Connections? –

Ren’s prestigious political chops has engendered questions about his connection to the Chinese state.

“The National Congress is the once-in-a-decade forum through which the next leaders of the Chinese state are chosen,” a US Congress panel wrote in 2012 investigative report on Huawei.

“Mr. Ren proudly admits that he was invited to that Congress, but he will not describe his duties.”

Ren has denied any close connection to Beijing, saying he was just a veteran without a military rank.

Huawei has long rejected such Western accusations, saying there was “no evidence” it poses a threat to the national security of any country.

But this month Poland arrested a Huawei employee suspected of spying for China. The firm swiftly sacked the employee and denied any connection to his actions.

Despite Washington’s campaign to blacklist the company, Ren has said he still hopes for “collaboration” with the US.

It will be difficult for Huawei to win back the trust of the United States after the indictment accused the company of stealing T-Mobile technology and running a programme to reward employees for stealing information from competitors.

Ren had insisted in his recent media interviews that his company needs to respect the intellectual property of others, “and get their permission, and pay for it.”


Leading Chinese academic predicts long, protracted trade war

January 30, 2019
  • Trade war is ‘inevitable’ and will be long and drawn-out, according to a leading Chinese government researcher
  • Huawei and other companies are not trusted in the West, according to a senior director at China’s state planner
PUBLISHED : Wednesday, 30 January, 2019, 12:01pm
UPDATED : Wednesday, 30 January, 2019, 12:32pm
South China Morning Post

As top level negotiators try to thrash out a deal to end the trade war between China and the United States, a leading Chinese government academic has predicted that the “irrational” conflict will be long and protracted.

China’s Vice-Premier Liu He is currently in the US, where he is expected to meet President Donald Trump on Thursday, in a break from negotiations with the top US trade official, Robert Lighthizer.

Liu He.    Photographer: Qilai Shen/Bloomberg

Liu is attempting to bring an end to a tit-for-tat trade war that has been waged since July 2018, with the US demanding that China opens its economy to foreign companies, reduce its trade deficit with the US and that it treats foreign companies operating in China fairly.

As well as slapping tariffs on billions worth of Chinese exports – which have been reciprocated in part by Beijing – Trump has demanded an end to forced technology transfer and intellectual property theft.

If these issues are not judged to have been addressed by March 1, tariffs on US$250 billion of Chinese goods will increase from 10 per cent to 25 per cent the following day.

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Robert Lighthizer

Zhang Yansheng, the chief research fellow at the China Centre for International Economic Exchanges (CCIEE) – a government-affiliated think tank – said that fundamental differences over economic issues, political systems and security will not be resolved by the March 1 deadline.

“I think the conflict [between China and the US] is inevitable and will carry on in the long term,” said Zhang, at a media briefing in Beijing on Wednesday. “It’s irrational now, but over time, after a lot of fights and talks, it will become rational and the two will collaborate again.”

He added: “If the tariffs go up to 25 per cent, it’s going to be insufferable for both US and Chinese firms.”

Zhang – who is also listed as a member of the Academic Committee of the National Development and Reform Commission (NDRC, China’s state planner) – said that the additional tariffs would have a wider negative effect on global trade.

His views on the challenges in resolving the trade war are in line with many top US officials, who have downplayed the chance of a quick solution.

“We do have another 30 days after this, so my expectation is that we’ll make significant progress at these meetings, but I would just emphasise these are complicated issues,” US Treasury Secretary Steven Mnuchin said on Monday.

The talks have been complicated by the ongoing legal battle between US prosecutors and Sabrina Meng Wanzhou, the chief financial officer at Chinese technology giant Huawei, and daughter of the company’s founder Ren Zhengfei.

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Xi Jinping with Ren Zhengfei

Meng was arrested in Canada in December and is fighting extradition to the US, where prosecutors have announced 23 criminal charges against Meng and Huawei, including money laundering, fraud, conspiracy and intellectual property theft.

Huawei has denied any wrongdoing and has also rejected criminal claims against Meng.

However, the company – considered the jewel in the crown of China’s tech industry – is being frozen out of bidding processes around the world for the roll-out of 5G technology, most notably among US allies such as Australia and the United Kingdom.

Pedestrians pass a Huawei Technologies store in Shanghai on Tuesday. (Qilai Shen/Bloomberg News)

The Huawei case shows the US’ distrust of China’s economic power, as well as its political system and culture, according to a senior figure at China’s state planner, who spoke at the same press briefing.

Sun Xuegong, a senior director and senior fellow of the Institute of Economic Research at the NDRC, said that the US’ distrust extended to Chinese companies in general.

“The Western media and politicians always think that China wants to challenge the status quo, and wants to change it,” said Sun. “There are many of us who have taken part in policy discussions, but we never thought about [changing it]. This is a big misunderstanding from the West.”

See also:

Critical China trade talks open amid tough U.S. action against Huawei

U.S. to Huawei: Don’t Lie to Your Bank

January 29, 2019

Prosecutors say the technology company lied about the ending of a banking relationship to maintain its accounts at other lenders

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Acting Attorney General Matthew Whitaker speaks beside U.S. Secretary of Commerce Wilbur Ross and U.S. Secretary of Homeland Security Kirstjen Nielsen during a news conference held to announce law enforcement action related to Huawei Technologies Co. PHOTO: MICHAEL REYNOLDS/SHUTTERSTOCK

The Trump administration’s charges against China’s Huawei Technologies Co., announced Monday, included a key message to other companies: You shouldn’t lie to your bank.

Prosecutors alleged that Huawei, its financial chief and other company employees engaged in a long-running scheme to deceive global banks and the U.S. government about its business ties to Iran, according to a 13-count indictment unsealed in Brooklyn, N.Y.

The Shenzhen, China, company, two affiliates and Chief Financial Officer Wanzhou Meng were charged in the case, which also highlights the approach taken by prosecutors to target individuals in corporate criminal cases.

Huawei Chief Financial OfficerMeng Wanzhou Out On Bail

Meng Wanzhou   Photographer: Ben Nelms/Bloomberg

Acting Attorney General Whitaker Speaks In Iowa


Acting U.S. Attorney General Matthew Whitaker

Photographer: Daniel Acker/Bloomberg


Huawei’s potential sanctions-risk exposure led one of its banks in 2017 to exit its relationship with the company, and the company lied about the ending of that relationship to maintain its accounts at other lenders, prosecutors said.

“When a bank’s customers lie to it about their sanctions-related business, that exposes the bank to the risk of violating the law, especially when they continue to provide those bad actors access to our U.S. financial system,” acting U.S. Attorney General Matthew Whitaker said when announcing the charges.

Global banks are increasingly nervous about doing business with Huawei, given the sanctions enforcement environment around Iran, according to Peter Harrell, a former U.S. State Department official who now is an adjunct senior fellow at the Center for a New American Security, a national security and defense policy think tank.

The company is too big to de-bank, said Mr. Harrell, suggesting that Chinese banks will service Huawei if global financial institutions distance themselves. But Huawei likely will face more questions from its bankers to ensure they don’t violate U.S. sanctions, he said.

The latest allegations come as Washington escalates its global campaign against the Chinese telecommunications giant, in which U.S. officials portray the company as a serial violator of U.S. laws and global business practices.

Huawei has denied the allegations. Last month, Canadian authorities arrested Ms. Meng, the daughter of company founder Ren Zhengfei, at the request of U.S. authorities. She was released on bail on Dec. 11, has denied the allegations against her and is fighting extradition.

The company effectively has been locked out of the U.S. market for years, but Washington has marshaled its allies, including the U.K., Australia and Japan, to look for potential risks associated with Huawei equipment in its supply chain.

The charges against Ms. Meng are also another example of the personal-liability approach the Justice Department has taken in its investigations in recent years.

Prosecutors alleged Ms. Meng personally made a presentation to one of Huawei’s major banking partners in August 2013 and repeatedly lied about the company’s relationship between Huawei and Skycom, its Iranian affiliate.

Her arrest and charges illustrate the increasing risk high-level executives at companies involved in alleged misconduct are facing, said Brian Fleming, an attorney at law firm Miller & Chevalier, who specializes in sanctions and white-collar defense.

Huawei’s case stands out from previous cases, including Chinese telecom company ZTE Corp. , where only the company was charged and there was no individual charges, he said.

“In the sanctions context, this is the most direct and powerful example of how senior executives engaged in these violations could truly have serious consequences, and even jail time,” Mr. Fleming said.

Write to Samuel Rubenfeld at and Mengqi Sun at

See also:

U.S. Charges Huawei With Stealing Trade Secrets, Bank Fraud

America Pushes Allies to Fight Huawei in New Arms Race With China

January 27, 2019

Jeremy Hunt, the British foreign minister, arrived in Washington last week for a whirlwind of meetings dominated by a critical question: Should Britain risk its relationship with Beijing and agree to the Trump administration’s request to ban Huawei, China’s leading telecommunications producer, from building its next-generation computer and phone networks?

Britain is not the only American ally feeling the heat. In Poland, officials are also under pressure from the United States to bar Huawei from building its fifth generation, or 5G, network. Trump officials suggested that future deployments of American troops — including the prospect of a permanent base labeled “Fort Trump” — could hinge on Poland’s decision.

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The U.S. says that Huawei’s very structure, with close ties to the Chinese government and role as a supplier of key telecom hardware, makes the company a potential tool for espionage, according to current and former U.S. security officials. Photo: Xi Jinping with Huawei founder Ren Zhengfei

And a delegation of American officials showed up last spring in Germany, where most of Europe’s giant fiber-optic lines connect and Huawei wants to build the switches that make the system hum. Their message: Any economic benefit of using cheaper Chinese telecom equipment is outweighed by the security threat to the NATO alliance.

Over the past year, the United States has embarked on a stealthy, occasionally threatening, global campaign to prevent Huawei and other Chinese firms from participating in the most dramatic remaking of the plumbing that controls the internet since it sputtered into being, in pieces, 35 years ago.

By  David E. SangerJulian E. BarnesRaymond Zhong and Marc Santora
The New York Times

A man lights a cigarette outside a Huawei retail shop in Beijing

The administration contends that the world is engaged in a new arms race — one that involves technology, rather than conventional weaponry, but poses just as much danger to America’s national security. In an age when the most powerful weapons, short of nuclear arms, are cyber-controlled, whichever country dominates 5G will gain an economic, intelligence and military edge for much of this century.

The transition to 5G — already beginning in prototype systems in cities from Dallas to Atlanta — is likely to be more revolutionary than evolutionary. What consumers will notice first is that the network is faster — data should download almost instantly, even over cellphone networks.

It is the first network built to serve the sensors, robots, autonomous vehicles and other devices that will continuously feed each other vast amounts of data, allowing factories, construction sites and even whole cities to be run with less moment-to-moment human intervention. It will also enable greater use of virtual reality and artificial intelligence tools.

But what is good for consumers is also good for intelligence services and cyberattackers. The 5G system is a physical network of switches and routers. But it is more reliant on layers of complex software that are far more adaptable, and constantly updating, in ways invisible to users — much as an iPhone automatically updates while charging overnight. That means whoever controls the networks controls the information flow — and may be able to change, reroute or copy data without users’ knowledge.

In interviews with current and former senior American government officials, intelligence officers and top telecommunications executives, it is clear that the potential of 5G has created a zero-sum calculus in the Trump White House — a conviction that there must be a single winner in this arms race, and the loser must be banished. For months, the White House has been drafting an executive order, expected in the coming weeks, that would effectively ban United States companies from using Chinese-origin equipment in critical telecommunications networks. That goes far beyond the existing rules, which ban such equipment only from government networks.


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Donald Trump and guest Xi Jinping at Mar-a-Lago, April, 2017

China’s ‘belt and road’ projects in Southeast Asia plunge as resistance grows

January 27, 2019
  • China’s investments in the region plunged by nearly half in 2018, to lowest level in four years
  • Asean member nations scrutinise Beijing’s strategy, though they still seek investment
  • Xi Jinping unable to fight off accusations of corruption, spying by Huawei, and China’s threatened ownership of South China Sea and Taiwan

South China Morning Post

PUBLISHED : Sunday, 27 January, 2019, 1:01pm
UPDATED : Sunday, 27 January, 2019, 3:58pm

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Chinese President Xi Jinping, right, shows the way to Philippine President Rodrigo Duterte during a welcome ceremony outside the Great Hall of the People in Beijing, China.   AP/Ng Han Guan, File

China is reshaping the approach of its flagship “Belt and Road Initiative” in Southeast Asia, as Chinese projects in the region plunged last year amid growing global scrutiny of Beijing’s development strategy.

The value of newly announced big-ticket deals in the region – investment commitments and construction contracts worth more than US$100 million – dropped 49.7 per cent in 2018 to US$19.2 billion, its lowest in four years, according to analysis by Citi Economics, using data amassed by the US think tank American Enterprise Institute.

For the 10 members of the Association of Southeast Asian Nations (Asean), new Chinese megaprojects slowed considerably in the second half of last year with only 12 recorded projects worth US$3.9 billion, down from 33 projects worth US$22 billion in the corresponding period 12 months earlier.

The value of those projects in Indonesia, Malaysia, Philippines and Singapore in the second half of 2018 was only a quarter of the full value in 2017, while no projects were logged in Thailand or Vietnam.

Despite the slump, analysts said China’s initiative in the region would be “reshaped but not redundant”, as the infrastructure heavy programme both aligned with the region’s development initiatives and was key to Beijing’s geostrategic aims.

“China’s overarching geostrategic imperatives suggest it will be incentivised to be more sensitive to Asean’s resistance going forward,” in order not to derail the belt and road plan, Citi analysts wrote, citing Beijing’s interest in co-financing projects with multilateral development banks as an example.

“US-China trade tensions could [also] prompt an increase in Chinese investments in Asean to circumvent tariffs on imports from China.”

China’s presence and influence in Southeast Asia has grown considerably since the 2013 launch of the belt and road plan, the centrepiece of Chinese President Xi Jinping’s economic diplomacy policy, fuelled Chinese investment in the region. Asean countries are now home to a third of China’s investment and construction commitments under it.

In the three years after the plan’s launch, Chinese committed investments to Asean surged 77 per cent compared to the three years before, Citi said. Similarly, construction contracts awarded to Chinese firms grew by 54 per cent in the period.

But there has also been growing resistance to China-funded mega projects in particular. Critics fear the geopolitical interests behind them, most notably in Malaysia, where Prime Minister Mahathir Mohamad’s government last week scrapped a US$20 billion railway project.

Myanmar also scaled back the Chinese-backed Kyaukpyu port on the coast of its Bay of Bengal, cutting costs considerably to address debt concerns.

Over 70 per cent of scholars in all 10 Asean nations said that their governments should be cautious about negotiating belt and road projects to avoid unsustainable debt, according to a survey published this month by the ISEAS-Yusof Ishak Institute in Singapore. The views were held most strongly by scholars in Malaysia, the Philippines and Thailand.

Other criticisms of projects in the region have included lax environmental standards, implementation difficulties, the lack of commercial viability, lingering questions of conflicting interests among local stakeholders, and public resentment to the rapid influx of Chinese people.

But the slowdown in new projects reflects China’s growing sensitivity to these Asean concerns, with greater interest from Beijing in approaches such as co-financing projects with multilateral development banks that “could create a more multilateral-looking BRI”, Citi said.

Thitinan Pongsudhirak, director of the Institute of Security and International Studies at Chulalongkorn University in Thailand, said the slowdown also coincided with the US-China trade war. While the hype of the initiative had died down, the belt and road concept itself and its projects had not been derailed, he said.

“It needs to be reconsidered and relaunched,” he said. “China is facing related challenges on multiple fronts. Its challenge will be how to pick and choose and prioritise which battles to fight first.

“If it wants to regain momentum, it may need to be softer and more accommodating with economic partners and may need to contain the trade war from deteriorating to the extent that it undermines the Chinese economy.”

Asian interest in the belt and road plan remains strong. In December, Indonesia’s deputy minister of maritime affairs Ridwan Djamaluddin said his country had been in “structural communication” with its Chinese counterparts for new projects worth between US$50 billion and US$60 billion.

In the Philippines, Xi’s visit to Manila in November saw the signing of 29 memorandums of understanding, including one related to the belt and road.

Citi said the region had benefited significantly from the initiative, which allows for diversification of capital from the US and Europe as well as infrastructure development.

Chinese companies met about 17 per cent of the region’s infrastructure needs between 2014 and 2017, conferring “structural benefits via higher productivity growth, build-up of export capacity and regional integration”, the report said.

While the rate of troubled projects in the region had been comparatively low and on the decline, the long-term financial risks from external debt remained, it said.

Sufian Jusoh, director and a professor of international trade and investment at the Universiti Kebangsaan Malaysia, said Beijing needed to change its approach.

“BRI applies a one-size-fits-all contract form,” he said. “China should differentiate countries where they work or are involved in.”

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Xi Jinping (R) is discussing ways to improve bilateral ties with Tanzanian President Jakaya

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President Xi Jinping met in Xiamen with President Jacob Zuma of South Africa

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George Soros

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Though not at Davos, China’s Xi Jinping and Huawei’s Ren Zhengfei were much talked about

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Nobody has worked harder for a successful business relationship with China than Apple’s Tim Cook

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Ti-Anna Wang

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

Meng Hongwei (picture-alliance/dpa/W. Maye-E)

Men Hongwei was as elected as Interpol’s chief in November 2016, becoming the first Chinese head of the agency. He is now one of “The Disappeared” in China….

Michael Spavor (L) and Michael Kovrig (composite image)
Michael Spavor (L) and Michael Kovrig are being accused of harming national security. AFP photos

Related image

China’s most successful film star Fan Bingbing has fallen foul of the authorities.


 (China blames Trump Tweets for Chinese economic downturn)

U.S. President Barack Obama and Chinese President Xi Jinping walk the grounds at Sunnylands in Rancho Mirage, California, June 2013 Kevin Lamarque/Reuters
U.S. President Barack Obama and Chinese President Xi Jinping walk the grounds at Sunnylands in Rancho Mirage, California, June 2013 (Kevin Lamarque/Reuters)

The two images were published side by side this week on the Twitter-like Chinese social media site Weibo.

The two images were published side by side this week on the Twitter-like Chinese social media site Weibo. Photo: REUTERS (These images are banned in China)
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A Chinese coast guard vessel guards a China oil rig in the South China Sea near Vietnam in 2014. Reuters photo
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Re-education of Uighurs in Xinjiang

China’s Davos: Gloomy, Fearful and the “We Wreck Ourselves” Theme — But plenty of money for a great party!

January 26, 2019

Democracy is not Working and China is Rising

Saving the planet becomes a growing part of the conversation at the World Economic Forum — But for Whom?

Roula Khalaf

A few hours into my first day at the World Economic Forum in Davos, I became a tree — virtually, I mean.

I planted a seed, donned virtual reality gear and was transplanted to the Amazon. I saw myself grow, my branches blossom and hug the twittering birds. Then I felt the wind blow and watched the fire sparks approach. Heat rose through my body as I was consumed by the flames.

The virtual reality experience was designed to raise awareness about deforestation among the global elite gathered in the Swiss resort. As one of its creators told me, if trees can’t speak for themselves, we humans must become them. Saving the planet is increasingly part of the Davos conversation.

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George Soros

More so this year perhaps because of a shortage of political noise. Many world leaders stayed away. Last year, US president Donald Trump’s appearance dominated the Davos shindig. This time the star was David Attenborough, the veteran naturalist and film-maker, who warned that if we wreck the natural world, “we wreck ourselves”.

There were repeated references to wreckage in my conversations at Davos, where the mood was distinctly gloomy, though not enough to prevent some extravagant partying (Sting performed at the Salesforce festivities).

From trade war to populist resistance, from the mercurial Trump presidency to Britain’s Brexit ordeal, the world order in which the Davos set has long thrived is slowly crumbling. I heard enriching discussions about a more responsible globalisation that would address the grievances of those left behind. Yet no one knew when or how the turbulence would be contained.

Those who know China and the US well were hopeful for a trade deal, but no one expected an end to an increasingly adversarial relationship.

“The trade war is not about a trade war, it’s about the rise of China,” an executive with ties in Beijing told me.

On the plus side, the late cancellations of many leaders (including Britain’s Theresa May and France’s Emmanuel Macron) were a relief. “All we talked about last year was Trump,” one European legislator reminded me.

But there was disappointment too, Davos being one of the few places on earth where you can rub shoulders with leading politicians and business figures, and occasionally even eavesdrop on their chats.

Some delegates expected Jair Bolsonaro, Brazil’s newly elected rightwing president, to cause a stir and inject excitement.

They were frustrated by a brief, overly scripted performance on stage. Sometimes Davos week feels like one long virtual reality experience, with thousands of people isolated on a mountain, hustling on a main street transformed into a corporate festival, all the while imagining they are changing the world.

Many attendees, however, travel to the Swiss mountains with a purpose.

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This year, for example, Russian businessmen under US sanctions were determined to assert their presence, after the WEF disinvited and then re-invited them. Still, they were warned they would be unable to interact with the forum’s American staff and would have to stay clear of US corporate receptions.

Big tech companies, meanwhile, were on a mission to prove they were “nothing like Facebook”, firmly committed to data privacy and transparency.

And then there was Huawei, the Chinese telecoms group under growing international suspicion that its equipment could be used for spying.

For the first time in years, the Davos programme included a Huawei dinner with journalists.

Over crab salad and baked salmon, company representatives insisted Huawei was independent and would never be at risk of government interference.

Finally, there was George Soros, whose annual dinner at the Hotel Seehof is his chance to reflect on the state of the world.

The billionaire philanthropist labours so much over his yearly speech that when I met him back in December he refused to discuss China because he was saving it for Davos.

It was certainly a big, bold message: China’s technological advance, warned Mr Soros, made President Xi Jinping the most dangerous opponent of open societies and he implored the US not to let up in challenging China.


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Though not at Davos, China’s Xi Jinping and Huawei’s Ren Zhengfei were much talked about

Vodafone “Pauses” Deployment of Huawei Equipment

January 25, 2019

Vodafone has “paused” the deployment of Huawei equipment in its core networks in Europe until Western governments resolve security concerns about the Chinese telecoms giant.

Huawei is under scrutiny over its ties with the Chinese government and allegations that its technology could be used for spying.

The Chinese firm has consistently denied those allegations.

Vodafone stoe

Vodafone chief executive Nick Read said that debate was “too simplistic”.

Nevertheless, he said: “We have decided to pause further Huawei in our core whilst we engage with the various agencies and governments and Huawei just to finalise the situation, of which I feel Huawei is really open and working hard.”

Important player

Vodafone will put on hold the rollout of Huawei equipment into its European core networks, including in the UK, until governments and security services clarify whether that equipment will be able to be used or whether there will be restrictions on using that technology.

The firm’s core networks are the data centres, equipment and software that Vodafone uses to connect customers to each other and the internet.

These are distinct from its radio networks, of masts and equipment, and its transmission networks, which connect the core and radio networks.

The greatest concentration of data lies in the core networks, which are more security-sensitive.

There are three big vendors which supply telecoms equipment in Europe: Huawei, Ericsson, and Nokia.

Huawei has about a 35% market share in Europe, making it an important player in the industry.

A Huawei spokesperson said: “Vodafone and Huawei are long-term strategic partners that have worked together since 2007.

“Huawei is focused on supporting Vodafone’s 5G network rollouts, of which the core is a small proportion.

“We are grateful to Vodafone for its support of Huawei and we will endeavour to live up to the trust placed in us.”

5G race

Governments and telecoms firms around the world are in a race to deploy so-called 5G or fifth generation networks, with commercial services already available in the US and South Korea.

However, since 2012 the US has been concerned about the security implications of letting a Chinese firm with links to the People’s Liberation Army and the Communist Party supply telecommunications equipment.

The US has taken an increasingly aggressive stance against the firm as the 5G race has gained momentum.

In August 2018, Australia said Huawei and Chinese rival ZTE would be excluded from its 5G networks, and in November 2018 New Zealand followed suit.

In December 2018, Huawei chief financial officer Meng Wanzhou was arrested in Vancouver.

In January this year, Huawei sacked an employee who had been arrested in Poland on suspicion of spying.

Reuters reported on Thursday that the arrest may have put Huawei out of the running to supply equipment for Poland’s future 5G network.