Posts Tagged ‘U.K.’

Huawei CEO Says Company Doesn’t Spy for China, Praises Trump in Charm Offensive

January 15, 2019

Image result for Xi Jinping and Huawei founder Ren Zhengfei, photos

Photo: Xi Jinping and Huawei founder Ren Zhengfei


Ren Zhengfei, founder of the Chinese tech giant, says no law forces companies in China to install ‘mandatory back doors’

Huawei founder and CEO Ren Zhengfei in Shenzhen, China, on Tuesday.
Huawei founder and CEO Ren Zhengfei in Shenzhen, China, on Tuesday. PHOTO: THEODORE KAYE FOR THE WALL STREET JOURNAL

SHENZHEN, China—The founder and CEO of Huawei Technologies Co. said his company has never spied for the Chinese government—and never would—as he made a rare public appearance following the arrest of his daughter in Canada.

“No law requires any company in China to install mandatory back doors,” Ren Zhengfei said Tuesday. “I personally would never harm the interest of my customers and me and my company would not answer to such requests.”

Mr. Ren’s public comments at Huawei’s campus are his first in years and come as the telecom giant faces challenges on multiple fronts. His daughter, Huawei CFO Meng Wanzhou, is fighting extradition to the U.S., where prosecutors accuse her of lying about the company’s business with Iran, Huawei has been blocked from several key markets and last week one of its employees was arrested in Poland and charged with espionage.

Mr. Ren didn’t say what specifically he would do to resist requests from the Chinese government. All companies doing business in China are required by law to hand over customer data to the government in cases that touch on national security. In China, national-security threats are broadly defined and can include speech critical of the Communist Party.

Mr. Ren said he missed his daughter, but was optimistic justice would prevail. Ms. Meng was arrested on Dec. 1 in Vancouver at the request of U.S. authorities. She denies the charges.

Huawei’s reclusive 74-year-old founder, a former army engineer, also praised President Trump as a “great president” and maintained Huawei is owned by its employees. The U.S. has raised concerns about Huawei’s ties to the Chinese state and that its telecom equipment could be used by Beijing to spy.

Mr. Ren’s public appearance comes days after the arrest of a Huawei employee in Poland who was charged with spying on the state on behalf of China. Huawei has fired the employee, Wang Weijing, and said his alleged actions have nothing to do with the company.

The events have rocked China, set back efforts toward a Beijing-Washington trade detente and dealt a direct blow to one of the country’s most successful global corporations. A Chinese court on Monday ordered the death penalty for a Canadian national convicted of drug smuggling, the latest example of how Canada has become caught up in the battle between the U.S. and China following the detention of Ms. Meng.

With 180,000 employees, Huawei is the world’s largest maker of telecommunications equipment, where it competes with Sweden’s Ericsson AB and Finland’s Nokia Corp. in making gear like routers, switches and base stations. It overtook Apple Inc. to become the world’s No. 2 global smartphone vendor, behind Samsung Electronics Co. , through the third quarter of last year.

Ren’s Rise

Huawei founder Ren Zhengfei rose from an army engineer to lead one of China’s tech champions.

1944 — Mr. Ren is born in a rural village in China’s Guizhou Province.
1963 — He attends the Chongqing Institute of Civil Engineering and Architecture.
1974 — Mr. Ren joins the People’s Liberation Army’s engineering corps. He is sent to Liaoyang near the North Korean border to help build a synthetic fiber factory.
1982 — Mr. Ren attends the 12th National Congress of the Chinese Communist Party as a reward for his contributions in the army.
1983 — He retires from the military after the engineering corps is disbanded and later joins a Shenzhen state-owned oil corporation.
1087 — Mr. Ren establishes Huawei in Shenzhen with 21,000 yuan (about $5,600 at the time).
2001 — Huawei establishes its U.S. subsidiary Futurewei in Plano, Texas.
Huawei discloses Mr. Ren’s daughter Meng Wanzhou had been appointed as CFO and to the board of directors.
2012 — The U.S. House Permanent Select Committee on Intelligence releases a report that says Huawei is a national security threat and recommends U.S. companies not use its equipment.
Mr. Ren attends the World Economic Forum at Davos and rebuts charges Huawei is a national security threat.
2018 — AT&T backs out of a deal to sell Huawei smartphones in the U.S. The American campaign against Huawei escalates.
2018 — Ms. Meng is arrested in Canada on U.S. charges that she lied to banks about Huawei’s business dealings in Iran.

Source: staff reports

In addition to hitting back against claims that Huawei is national-security threat, Mr. Ren reiterated that Huawei is purely owned by its employees, with its shareholders numbering nearly 97,000, and said no outside entity holds any stake in the company.

“There is no external institution that owns our shares—even 1 cent,” Mr. Ren said.

Speaking with reporters under a green and gold chandelier in an opulent meeting room on Huawei’s Shenzhen campus, Mr. Ren also praised President Trump’s tax-cutting agenda, but said a trade war between the U.S. and China would harm the world.

“In the information society, interdependence between one another is very significant,” he said. “That interdependence is what’s driving human progress forward more rapidly.”

Huawei has been dogged for years by allegations that is a security threat. It has been effectively locked out of the U.S. telecom market since a 2012 Congressional report raised concerns that its gear could be used by Beijing to spy on Americans, which Huawei has forcefully denied.

Spy chiefs from Australia to the U.K. have signaled concern that China could use Huawei for espionage, though no evidence of back doors or hacks related to the company has been produced. The U.S. has been pressing allies to shun Huawei gear in advance of an expected rollout of next-generation 5G networks, expected to allow faster connection speeds and a fuel a boom in connected devices, from autonomous vehicles to remote-controlled medical equipment.

Australia and New Zealand, key U.S. allies, have banned Huawei from their 5G network upgrades. Japan has excluded it from government purchasing while the U.K. and Canada have said they are reviewing their telecom supply chains.

Mr. Ren spoke with reporters under a green and gold chandelier in an opulent meeting room on Huawei’s Shenzhen campus.
Mr. Ren spoke with reporters under a green and gold chandelier in an opulent meeting room on Huawei’s Shenzhen campus. PHOTO: QILAI SHEN/BLOOMBERG NEWS

Despite the barriers, Huawei said last month it expected to report that 2018 revenue rose 21% to $108.5 billion. Mr. Ren said the company has already signed 30 5G commercial contracts and shipped 25,000 5G base stations out of China.

“We’re not a public company. We don’t care so much about beautiful balance sheets,” said Mr. Ren, who alternated between reading from prepared remarks and casually holding forth on the company’s history and vision. “As long as we can keep our employees fed I believe there will be a future for Huawei.”

Much of the suspicion around Huawei has centered on Mr. Ren himself—in particular his years spent in the Chinese military before founding the telecom giant. In their 2012 report, Congressional investigators said Huawei refused to describe Mr. Ren’s full military background, and that they “struggled to get answers” about whether his military ties played any role in the company’s development.

Mr. Ren maintains a tight grip on the company, but avoids the spotlight—rarely giving interviews and delegating public appearances to deputies. One of his last major public addresses was in 2015 at the World Economic Forum in Davos, where he discussed his military days and Huawei’s origins and rebutted spying charges.

On Tuesday Mr. Ren returned to the subject of his military experience, explaining that as an engineer he helped establish a synthetic-textile factory in the northeastern city of Liaoyang. Mr. Ren left the military in 1983, four years before founding Huawei.

He also addressed another sticking point in his background: his attendance at a 1982 National Congress of the Chinese Communist Party. He said he was invited as a reward for a widely publicized device he invented while in the military.

“Today, I still love my country,” Mr. Ren said. “I support the Communist Party of China, but I will never do anything to harm any other nation.”

Write to Dan Strumpf at and Josh Chin at


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.

Image result for zte corp, photos

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.

 Image result for Huawei, 5G, photos

“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

2018’s Biggest Loser Was the Liberal International Order

December 31, 2018

The runners-up are China, the U.K., France’s Macron and Saudi Arabia’s Crown Prince Mohammed.

2018's Biggest Loser Was the Liberal International Order


It’s been a year of tumult and chaos in world politics. In Japan, a national poll selected the kanji character sai, meaning disaster, as best reflecting the national mood. Perhaps 2019 will bring better news. In the meantime, here are the states, individuals, institutions and ideas that were 2018’s biggest losers. Next week: the winners.

• China’s Belt and Road Initiative. In 2018 Beijing began to learn how hard it is to build an international system. The BRI isn’t only a massive infrastructure project intended to build an integrated commercial area centered on China; it is an attempt to translate China’s economic might into geopolitical power.

After Beijing forced Sri Lanka to hand over control of its Hambantota port facilities for 99 years to satisfy its debt in late 2017, this year saw China’s most important BRI targets cancel existing agreements (Malaysia), demand better terms (Pakistan)and scale back projects (Myanmar). Chinese ties to South Africa’s Gupta family (widely blamed for facilitating the corruption of the former president Jacob Zuma) and other corrupt figures have contributed to a more  skeptical view of Beijing’s intentions in Asia and Africa. The pushback has only begun. China’s debt-trap diplomacy will face more obstacles in 2019.

Britain. The United Kingdom slowly twisted in the wind in 2018….

Mohammad Bin Salman. The crown prince of Saudi Arabia…..

President Trump’s sudden decision to pull U.S. troops from Syria was good news for the two powers Saudi Arabia fears most — Iran and Turkey …

Emmanuel Macron. The French President, whose 2017 election animated hopes of a “new political center” in the West, had a horrible year…

Liberal International Order.

A modern Voltaire might quip that the old system was neither liberal nor international nor an order, but its absence will be felt if it disintegrates.

Read the rest:

US indicts Chinese govt hackers over attacks in 12 countries

December 20, 2018

The US Justice Department on Thursday announced the indictment of two Chinese government hackers who allegedly targeted 45 companies and agencies in a dozen countries, which US officials said showed Beijing had not fulfilled its pledge to stop such actions.

In an operation coordinated with US allies in Europe and Asia, Deputy Attorney General Rod Rosenstein said the move was being made to rebuff “China’s economic aggression.”

US Deputy Attorney General Rod Rosenstein said the indictment of the two Chinese hackers was meant to rebuff “China’s economic aggression”

The Justice Department said the hackers had targeted numerous managed service providers (MSPs), specialist firms which help other companies manage their information technology systems — potentially giving hackers an entry into the computer networks of dozens of companies.

Rosenstein slammed Beijing for repeatedly violating a pledge made by Chinese President Xi Jinping to then-president Barack Obama in 2015 to halt cyber attacks on US companies and commercial infrastructure.

“These defendants allegedly compromised MSP clients in at least a dozen countries,” Rosenstein said. “It is unacceptable that we continue to uncover cybercrime committed by China against other nations.”

“We want China to cease its illegal cyber activities and honor its commitment to the international community,” he said.

“But the evidence suggests that China may not intend to live up to its promises.”

The Justice Department said the two hackers, Zhu Hua and Zhang Shilong, worked for the so-called APT10 hacker group allegedly backed by China’s Ministry of State Security.

The two worked with the ministry’s Tianjin State Security Bureau, it said.

“From at least in or about 2006 up to and including in or about 2018, members of the APT10 Group, including Zhu and Zhang, conducted extensive campaigns of intrusions into computer systems around the world,” it said.

The Justice Department said that one of the managed service providers hacked was a New York company that gave the Chinese nationals access to data from the company’s clients involved in banking, telecommunications, medical equipment, manufacturing, health care, biotechnology, oil and gas exploration, and others.

The indictments came amid heightened tensions over trade, hacking and geopolitical issues between Washington and Beijing.

On October 30, the US indicted 10 Chinese nationals, including two intelligence officers, over a five-year scheme to steal engine technology from US and French aerospace firms by hacking into their computers.

Earlier that month, the Department of Justice obtained the unprecedented extradition of a senior Chinese intelligence official from Belgium to stand trial in the United States for running the alleged state-sponsored effort to steal US aviation industry secrets.

In early December, Canada arrested an executive of China’s leading Huawei telecommunications company at Washington’s request.

The US plans to charge her with fraud charges related to sanctions-breaking business dealings with Iran.

Since then, China has detained three Canadians, in an apparent bid to pressure Ottawa into fully releasing the Huawei executive, who is now out on bail.

And, according to reports, US officials believe Chinese government-linked hackers were behind the theft of data on some 500 million guests of hotel giant Marriott, first reported on November 30.



US and UK accuse China-backed hackers of ‘widespread intrusions’

December 20, 2018

America, Britain and allies in co-ordinated push against Beijing sponsored espionage

Image result for china cyber, pictures

By Demetri Sevastopulo and David Bond

The US justice department on Thursday charged two Chinese nationals with conducting a global hacking campaign, in a co-ordinated move with US allies designed to send a stark warning to China to stop stealing technology around the world.

Rod Rosenstein, deputy attorney-general, and Christopher Wray, the FBI director who earlier this year warned Congress about the growing threat from Chinese espionage, unveiled the action which is part of a new justice department “China initiative” aimed at tackling rising Chinese cyber espionage.

Image result for Rod Rosenstein, Christopher Wray, pictures

Christopher Wray, left, and Rod Rosenstein

The threat is increasingly raising alarm bells from the US, UK and Canada to Japan, New Zealand and Australia. In the UK, the British government said Chinese state sponsored hackers had been running one of the most “significant and widespread cyber intrusions” against the UK and its allies, targeting trade secrets and economies around the world.

The move to publicly attribute the two year campaign to a hacking group known as APT10 is part of a co-ordinated push back by the US and western allies against Beijing backed espionage and intellectual property theft.

UK Foreign Secretary Jeremy Hunt said: “These activities must stop. Our message to governments prepared to enable these activities is clear: together with our allies, we will expose your actions.”

Mr Rosenstein said the Chinese nationals were charged with conspiracy to commit “computer intrusion” against dozens of companies in the US and around the world.

He said they helped the Chinese government target and penetrate managed service providers that store data on servers around the world. “It is unacceptable that we continue to uncover cyber crimes by China,” said Mr Rosenstein.

“We want China to cease its illegal cyber activities.” One official familiar with the move told the Financial Times that it would “further demonstrate the depths that China has gone to in their quest to cheat their way up the global economic ladder”.

The action comes as the Trump administration steps up pressure on China across the board. In addition to attempts to reduce its trade deficit with China, the administration is increasing efforts to tackle everything from the theft of intellectual property to Chinese spying and “influence operations” in the US. In a speech in October, US vice-president Mike Pence put China on notice that the Trump administration believed that previous administrations had been too soft.

See also:

Rod Rosenstein, Chris Wray announce indictment of Chinese hackers


U.S. DOJ Unseals Criminal Charges Against Chinese Intelligence Officers

December 20, 2018

Allies including the U.K., Japan, and Australia expected to issue statements supporting the U.S. action



Image result for U.S., China, flags

The U.S. Justice Department is expected to unseal criminal charges Thursday against Chinese intelligence officers allegedly tied to a persistent campaign to hack into technology-service providers, according to people familiar with the matter.

The Trump administration will also formally accuse China of violating a 2015 bilateral agreement under which both countries vowed to not engage in state-sponsored hacking for economic gain, people involved in the process said.

The moves mark the latest push by the Trump administration to punish Beijing for its alleged cyberattacks on American companies.

Several allied countries, including the U.K., Japan, and Australia, are expected to issue statements supporting the action by the U.S. government. Some of those countries have also seen companies victimized by this cyber campaign, the people said.

Federal prosecutors are expected to allege that several of the indicted individuals are affiliated with a bureau of the Ministry of State Security, China’s main intelligence agency, located in the coastal city of Tianjin, the people said.

Current and former U.S. officials have described the hacking campaign against technology-service providers as one of the most audacious and potentially damaging of all the hacking campaigns waged by Chinese hackers in recent years against American interests, one intended to steal intellectual property and support Beijing’s espionage goals.

Thursday’s indictments draw direct links between the alleged hackers and the Ministry of State Security. They also state unequivocally that Chinese authorities approved of and directed the campaign. The Wall Street Journal first reported on the expected charges in October.

China’s Ministry of State Security doesn’t accept media inquiries. Chinese Foreign Ministry officials have consistently said that Beijing doesn’t condone computer hacking in any form, and frequently say China is one of the world’s biggest victims of cyberattacks.

Thursday’s moves mark the latest in a flurry of actions taken by the Justice Department and other agencies to publicly shame and punish China for what officials have described as years of cyberattacks against U.S. companies that cost the American economy as much as hundreds of billions of dollars annually, according to some government estimates. Top federal investigators last week told the U.S. Senate that Chinese corporate espionage had metastasized into a pre-eminent national and economic security threat.

In October, federal prosecutors unsealed charges against 10 Chinese intelligence officers with a different regional bureau of the Ministry of State Security, accusing them of hacking U.S. aviation companies.

The Justice Department followed days later with more charges against a Chinese state-owned firm and its Taiwan partner for allegedly stealing trade secrets from the U.S.’s largest memory-chip maker, Micron Technology Inc. There have also been renewed worries about Chinese hackers breaking into U.S. Navy contractors to steal advanced military technology.

Write to Dustin Volz at and Josh Chin at

See also:

China slammed by US and more than a dozen allies for ‘massive hacking campaign to steal trade secrets and technologies’


U.S. to Unseal Criminal Charges Against Chinese Intelligence Officers

December 20, 2018

Allies including the U.K., Japan, and Australia expected to issue statements supporting the U.S. action

Related image


The U.S. Justice Department is expected to unseal criminal charges Thursday against Chinese intelligence officers allegedly tied to a persistent campaign to hack into technology-service providers, according to people familiar with the matter.

The Trump administration will also formally accuse China of violating a 2015 bilateral agreement under which both countries vowed to not engage in state-sponsored hacking for economic gain, people involved in the process said.

The moves mark the latest push by the Trump administration to punish Beijing for its alleged cyberattacks on American companies.

Several allied countries, including the U.K., Japan, and Australia, are expected to issue statements supporting the action by the U.S. government. Some of those countries have also seen companies victimized by this cyber campaign, the people said.

Read the rest:

See also:

Chinese Intelligence Officers and Their Recruited Hackers and Insiders Conspired to Steal Sensitive Commercial Aviation and Technological Data for Years

The Education of Huawei

December 7, 2018

The telecom giant pays a price for China’s abuse of global trade norms

The Wall Street Journal

Image result for Ren Zhengfei, Xi Jinping, pictures

Photo: Xi Jinping and Huawei founder Ren Zhengfei

Another day, another China drama in world markets. Thursday’s jolt was news that Huawei CFO Meng Wanzhou was arrested in Vancouver at the request of U.S. officials for allegedly violating Iran sanctions. The press corps is focusing on the arrest’s timing amid new trade talks. But the arrest is best understood as an attempt to get Beijing to stop abusing global trade norms.

Huawei is the world’s largest telecom equipment manufacturer and second biggest supplier of handsets. Ms. Meng is the daughter of Huawei founder Ren Zhengfei and has helped to steer its colossal growth. Her arrest occurs amid heightened worries about the Chinese telecom giant’s cyber threat.

The concerns go back at least to 2012 when the House Intelligence Committee warned that Huawei and its smaller competitor ZTE were violating U.S. laws and could be used for spying and theft. Huawei “likely remains dependent on the Chinese government for support” and the Chinese Communist Party maintains a “Party Committee within the company,” said the committee report that also implied Huawei wasn’t complying with Iran sanctions.

The Trump Administration and its intelligence counterparts in the Five Eyes—Australia, Canada, New Zealand and the U.K.—have been briefing allies about Huawei’s cyber risks and encouraging foreign carriers to use other suppliers in their 5G networks, which will enable interconnected home devices, smart grids and self-driving cars.

5G could also make it easier for the Chinese to conduct corporate espionage, disrupt commerce and steal secrets. Damage from security breaches may be harder to identify and contain. In a speech this week, Canadian Security Intelligence Service director David Vigneault cited a “trend of state-sponsored espionage” through 5G networks.

These warnings have spooked U.S. carriers into spurning Huawei equipment. Australia blocked Huawei and ZTE from its 5G networks in August, and New Zealand followed last month. Britain’s largest wireless carrier, BT Group , this week pulled Huawei from its network core, which is used to transfer calls and internet traffic. The head of Britain’s MI6 intelligence service, Alex Younger, says cell towers may be vulnerable.

San Jose-based CNEX Labs in October alleged that Huawei sought to lift its semiconductor technology. The Justice Department in October charged a Chinese Ministry of State Security director with conspiring to steal GE Aviation trade secrets and Fujian Jinhua Integrated Circuit Co. with pilfering IP from America’s Micron Technology .

These sanctions are a better way to punish Chinese abuses than blunderbuss tariffs, which also hurt Americans. Yet President Trump this year let ZTE off easy after it was caught repeatedly violating U.S. sanctions. An export ban that Commerce had proposed could have put ZTE out of business. China repaid Mr. Trump by blocking Qualcomm ’s acquisition of NXP Semiconductors , which posed a competitive threat to Huawei.

News reports say U.S. intelligence suspected in 2016 that Huawei was skirting sanctions, and one question is why the U.S. didn’t act sooner to send Beijing a message. The charges against Ms. Meng haven’t been published, and she and Huawei deny wrongdoing. But the South China Morning Post reported that during an internal talk on compliance in October, Ms. Meng told employees that in cases “the company is totally unable to comply with in actual operations . . . after a reasonable decision-making process, one may accept the risk of temporary non-compliance.” That risk now includes arrest.

Beijing might counter by arresting U.S. CEOs in China, and trade talks could break down. But enforcing laws and negotiating a trade deal aren’t incompatible. The U.S. has to enforce its laws or they’re meaningless, and China has to see there is a price for violating norms in pursuit of economic and security dominance. Play by the rules, and everyone can prosper.

Appeared in the December 7, 2018, print edition.

New U.S.-Led Coalition to Track Illicit Fuel Shipments to North Korea

September 14, 2018

Surveillance efforts until now have been a hodgepodge of intelligence-sharing, U.S. officials said

The USS Blue Ridge, here visiting Shanghai in 2016, will host more than 50 personnel from allied countries as part of the expanded surveillance effort.
The USS Blue Ridge, here visiting Shanghai in 2016, will host more than 50 personnel from allied countries as part of the expanded surveillance effort. PHOTO: CHEN FEI/ZUMA PRESS

WASHINGTON—The U.S. is putting together a multinational coalition to significantly expand surveillance operations seeking ships smuggling fuel to North Korea in violation of United Nations sanctions, American military officials said.

The coalition is the first international effort to monitor the ship traffic in the year since the Trump administration launched its “maximum-pressure” sanctions campaign, aimed at strong-arming North Korea into abandoning its nuclear and missile programs. Surveillance efforts until now have been a hodgepodge of intelligence-sharing, U.S. officials said.

More than 50 personnel from allied countries will be hosted aboard the USS Blue Ridge, an American command ship stationed in Yokosuka, Japan. Special quarters, called the Enforcement Coordination Center, have been created on the ship for the operations.

The coalition will include the U.K., Australia, New Zealand and Canada—the U.S.’s partners in the Five-Eyes intelligence alliance—as well as Japan and South Korea. France is also contributing a small number of personnel, officials said.

Coalition countries are also contributing warships and military surveillance aircraft to better spot illicit shipments.

The expanded surveillance will allow for more “bridge-to-bridge” communications between allied ships and suspected smuggling ships—known jokingly inside the military as having “scarlet letters” for their alleged misdeeds. Sanctions violators will no longer be able to plead ignorance, another military official said: “‘I didn’t know’ is no longer an excuse.”

Ships confirmed to be smuggling goods to North Korea are blacklisted by the U.N. Security Council, denying them access to ports of any U.N.-member country.

While most sanctions-busting surveillance focuses on Pyongyang’s revenue-generating exports of coalweapons and labor and its illicit cyber activities, imports of refined petroleum are among Washington’s biggest North Korea worries. A critical lubricant for the North Korean economy, they also drive its military.

The Security Council, led by the U.S., late last year capped annual imports at 500,000 barrels. But North Korea exceeded the cap within the first five months of 2018, according to U.S. intelligence.

The sanctions evasion was aided by Russian and Chinese ships that transferred black-market fuel into North Korean vessels on the high seas to avoid detection, according to U.S. intelligence. Between January and May, two dozen North Korean ships made 89 deliveries of refined petroleum into North Korean ports, according to U.S. intelligence provided to the U.N. and reviewed by The Wall Street Journal. The deliveries were from high-seas transfers, most from either Russian or Chinese ships, U.S. officials said.

The route of the North Korean ship Chon Myong 1 from Vladivostok to Nampo port, North Korea, shown on an Eikon ship-tracking screen last year. The ship delivered up to 190,000 barrels of refined petroleum to North Korea’s Wonsan port in May, two months after being sanctioned by the U.N.
The route of the North Korean ship Chon Myong 1 from Vladivostok to Nampo port, North Korea, shown on an Eikon ship-tracking screen last year. The ship delivered up to 190,000 barrels of refined petroleum to North Korea’s Wonsan port in May, two months after being sanctioned by the U.N. PHOTO: THOMAS WHITE/REUTERS

Some of those deliveries may have carried volumes allowed under the U.N. sanctions. But many of the ships, according to the Journal’s review of U.S. intelligence and public information, loaded their fuel on the high seas in violation of international bans, had been blacklisted by the Security Council before the deliveries were made, and would be violating the sanctions by carrying volumes that put North Korea over its quota.

The North Korean ship Chon Myong 1, for example, delivered up to 190,000 barrels of refined petroleum to North Korea’s Wonsan port in May, two months after being sanctioned by the U.N. The blacklisted Nam San 8 delivered up to 218,000 barrels of fuel into the Nampo port in May. That vessel was later caught by Japan’s Ministry of Defense conducting a midnight fuel transfer in the East China Sea in July 31.

The new coalition isn’t necessarily a precursor to more aggressive interdictions, such as boarding suspected ships or forcing vessels into allied ports, officials said. Some critics have lobbied for more-assertive enforcement as denuclearization talks between Washington and Pyongyang have stalled.

Sharing intelligence data will be a challenge, given that the countries’ goals align on North Korea but may differ widely otherwise. Japan and South Korea, for example, share a mutual distrust, and the U.S. has sometimes struggled to get the two to coordinate. And South Korea is subject to the competing tugs of the U.S., which stations thousands of troops there, and China, whose economic might holds sway.

To help coordinate sensitive intelligence sharing, the Pentagon’s intelligence arm, the Defense Intelligence Agency, and the undersecretary of defense for intelligence created a new agreement—the Pacific Security Monitoring Exchange—to define what can and can’t be shared with each of the coalition countries, officials said.

Another challenge is that the U.S. Indo-Pacific Command has relatively little experience maintaining multilateral relationships, unlike U.S. Central Command, which has hosted coalitions in Iraq, Afghanistan, Syria, Yemen and in other conflicts.

“Those challenges exist inherently in all multinational exercises and events,” said one military official. “The good thing is that you can work on those challenges and you can learn from them. There are always obstacles to overcome.”

Write to Gordon Lubold at and Ian Talley at

U.K. and EU Drop October Deadline for Brexit Deal

August 29, 2018
  • Both sides see mid-November as new end date for divorce talks
  • Theresa May’s spokesman says pace of negotiations accelerating

The U.K. and the European Union still say in public they want a Brexit deal wrapped up in the next seven weeks. Behind the scenes, though, senior officials on both sides admit this is unlikely.

They now aim to finalize divorce terms by the middle of November at the latest, according to people familiar with the British and European positions, who spoke on condition of anonymity as the discussions are private.

The longer timeframe is another indication that negotiators are struggling to make headway, and the risk is that the closer talks run to the U.K.’s exit on March 29, the greater the chance that there won’t be a deal. The EU summit beginning Oct. 18 had been earmarked as the deadline, after earlier hopes of resolving the divorce by June faded away.

If the deadline is pushed back again into December or January, both sides would face perilous choices over whether to give ground or give up on talks.

Negotiations have been painfully slow since an agreement on a transitional period was reached in March. The two sides remain far apart on the thorniest subject: how to guarantee there will never be a hard border between the U.K. province of Northern Ireland and the Republic of Ireland. Even so, British officials insist they’re “confident” of getting a deal.

“We’re working to the October deadline,” Prime Minister Theresa May’s spokesman, Greg Swift, told reporters in London on Tuesday. “Both sides have agreed to increase the pace of negotiations. That’s what we’re doing.”

Speaking after a meeting with U.K. Brexit Secretary Dominic Raab last week, the EU’s chief negotiator, Michel Barnier, wouldn’t commit to October as the deadline for the completion of the accord. But he reiterated it couldn’t be much later than that — “well before the end of the year.”

No-Deal Brexit May Mean Higher Prices, More Red Tape, Less Sperm

Achieving a divorce deal in the fall is seen as vital to allow enough time for the British and European parliaments to ratify the accord before Britain legally leaves the bloc. The lack of progress has weighed on the pound in recent weeks, amid warnings from senior ministers that Britain risks crashing out of the EU without any agreement.