Archive for ‘Huawei’

15/02/2019

Seizing on Huawei’s troubles, Samsung bets big on network gear

SEOUL (Reuters) – Samsung Electronics is pouring resources into its telecom network equipment business, aiming to capitalize on the security fears hobbling China’s Huawei, according to company officials and other industry executives.

Those efforts include moving high-performing managers and numerous employees to the network division from its handset unit, two Samsung sources said.
Potential customers are taking notice of Samsung’s efforts to reinvent itself as a top-tier supplier for 5G wireless networks and bridge a big gap with market leader Huawei and industry heavyweights Ericsson and Nokia.
French carrier Orange’s chief technology officer, Mari-Noëlle Jégo-Laveissière, visited Japan last year and was impressed with the pace of 5G preparations using alternative equipment makers including Samsung, a company representative told Reuters.

Orange, which operates in 27 markets and counts Huawei as its top equipment supplier, will run its first French 5G tests with Samsung this year.

Underscoring the growing importance of the business, South Korean Prime Minister Lee Nak-yeon visited Samsung’s network division in January. In a closed-door meeting during that visit, Samsung heir Jay Y. Lee asked for government help with recruiting high-level engineers.
Huawei is battling allegations by the United States and some other Western countries that its equipment could enable Chinese spying and should not be used in 5G networks, which will offer higher speeds and a host of new services.
Australia and New Zealand have joined the United States in effectively barring Huawei from 5G, and many other countries, especially in Europe, are considering a ban. Huawei denies that its gear presents any security risk.
Its woes have presented Samsung with a rare opportunity. Telecom firms would ordinarily stick with their 4G providers for 5G upgrades as they can use existing gear to minimize costs, but many firms may now be under political pressure to switch.

“We’re bolstering our network business to seize market opportunities arising at a time when Huawei is the subject of warnings about security,” said one of the Samsung sources.

The sources, who did not disclose specific figures for the employee moves, declined to be identified as they were not authorized to speak on the matter.

Keen to seek new growth, particularly as sales of its mainstay chips and smartphones have begun to drop, Samsung plans to invest $22 billion in 5G mobile technology and other fields over three years. It declined to break down how much will go to 5G and the other areas – artificial intelligence, biopharma and automotive electronic parts.

“Samsung is focused on building trust with our partners and leading the global 5G markets, regardless of other companies,” it said in an emailed statement to Reuters.

Asked about Samsung’s big push into network equipment, Huawei said in a statement that it welcomed competition in the market.

INDIA OPPORTUNITY

In India, Samsung is now in talks with Reliance Jio to upgrade its network to 5G, looking to build on what has perhaps been its biggest network success – becoming the key supplier for the upstart carrier.

“We don’t think 5G is far away in India,” a Samsung official with direct knowledge of the matter told Reuters. He declined to be named due to the sensitivity of the matter.

Samsung’s clients include U.S. firms AT&T Inc, Verizon Communications Inc and Sprint Corp and it has 5G network contracts with all three, though it was not clear how extensive those contracts are. It also sells to South Korean carriers and has partnered with Japanese mobile carriers to test its 5G equipment.

In many cases, Samsung supplies only small pieces of networks. According to market tracker Dell’Oro Group, the South Korean firm holds just 3 percent of the global telecom infrastructure market compared with 28 percent for Huawei.

Its network business made 870 billion won ($775 million) in operating profit last year, according to Eugene Investment & Securities. Filings show Nokia’s network business made about 1.2 billion euros ($1.4 billion) while Ericsson’s network operations made 19.4 billion Swedish crowns ($2.1 billion). Figures for Huawei were not available.

FINDING THE PEOPLE

One major hurdle for Samsung will be attracting talent amid a dearth of software engineers in South Korea.

“We need more software engineers and want to work with the government to find that talent,” Lee was quoted as saying by government officials at his meeting with the prime minister.

Samsung’s network business unit employs roughly 5,000 people, according to a government official in the southern city of Gumi where Samsung operates its manufacturing plants.

Kim Young-woo, an analyst at SK Securities, expects Samsung to hire 1,000-1,500 people for 5G network equipment this year. Samsung declined to comment on network employee levels and hiring plans.

But Samsung’s bet remains risky as the long-term nature of telecom network investment means change comes slowly.

Sweden’s Ericsson and Finland’s Nokia, which acquired the remnants of once-powerful network equipment companies Alcatel-Lucent and Nortel, have as yet seen little sales growth from Huawei’s problems, company executives said.

Both are in cost-cutting mode, even in the face of the 5G opportunity and the problems confronting their biggest rival.

Indeed, some network operators in Europe are warning that a Huawei ban – now under consideration in France, the UK, Germany and other countries – could push back deployment of 5G by as much as three years.

Others warn Samsung may struggle to develop a global sales and support organization.

“The way telcos purchase products and services from their suppliers demand a lot of time and resources, which is why Ericsson and Nokia have around 100,000 employees and Huawei almost twice as many,” said Bengt Nordstrom, CEO of telecom consultancy Northstream.

But Samsung is taking the long view. In December, it agreed to extend its Olympic partnership with the International Olympic Committee through to 2028 and expand its sponsorship to 5G technology.

The company did not want to leave its sponsorship spot open to Chinese rivals, a separate source with knowledge of the matter said.

“If Samsung dropped the top mobile sponsorship for the Olympic games beyond 2020, then who would have taken that spot? It would only have been China, Huawei.”

($1 = 1,122.8000 won)

Source: Reuters

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13/02/2019

China, UK should handle differences properly, enhance strategic mutual trust: Ambassador

LONDON, Feb. 12 (Xinhua) — China and UK should keep the long-term interests and larger picture in mind, look at each other’s development as opportunities, respect each other’s sovereignty, security and right to development, handle our differences properly and enhance strategic mutual trust, Chinese Ambassador to Britain Liu Xiaoming has said.

The Chinese diplomat made the remarks while attending the Chinese New Year Dinner by the Cities of London and Westminster Conservative Association on Monday night.

“If we compare China-UK relations to a building, it could not stand tall without a solid foundation. This foundation is the mutual confidence between our two countries,” he said.

Recalling that the world economy is under downward pressure, with surging protectionism and unilateralism making things doubly difficult. Against this situation, Liu said it is all the more important that China and the UK advocate free trade, oppose protectionism and promote open cooperation.

“We hope that the UK would continue to provide a fair, transparent and non-discriminatory business environment for Chinese companies. We hope you will make successful Chinese companies such as Huawei feel welcome here in Britain, and convince them that the UK is a trustworthy place to put their money,” said the Chinese ambassador.

Liu said both China and the UK are known for their profound cultural heritage and important contribution to the progress of human civilization.

“I hope that in the new year our two countries will continue to enhance cultural and people-to-people exchanges, and deepen mutual understanding and strengthen friendship.”

The ambassador also hoped that people from all walks of life in both China and UK will join hands to cement the foundation for a solid and magnificent edifice of bilateral relations.

British Prime Minister Theresa May sent a congratulatory message to the event, saying that it is an important moment to recognize the contribution of the Chinese community in London and across the whole of the United Kingdom.

“The Chinese community’s expanding business expertise, scientific inquiry and cultural heritage and traditions are of immense value to our country – not least here in London, where the vibrancy of Chinatown stands as a strong beacon for the Chinese community and a reminder of all that they have contributed to our society,” she said.

Source: Xinhua

27/01/2019

Trudeau fires Canada’s ambassador to China amid Huawei controversy

Canada's Prime Minister Justin Trudeau (R) shakes hands with former Immigration Minister John McCallumImage copyrightREUTERS
Image captionJustin Trudeau (R) appointed John McCallum ambassador to China in 2017

Prime Minister Justin Trudeau has fired Canada’s ambassador to China, John McCallum.

It follows controversial comments Mr McCallum made about an extradition case involving a senior executive from the Chinese telecoms giant Huawei.

Mr Trudeau said in a statement he had asked John McCallum to step down, but did not offer a reason.

The detention of Meng Wanzhou, at the request of the US, angered China and soured Canada’s relations with Beijing.

Ms Meng, Huawei’s chief financial officer, is accused by the US of evading sanctions on Iran. Both she and Huawei deny those allegations.

What did Justin Trudeau say?

In a statement, the Canadian prime minister said: “Last night I asked for and accepted John McCallum’s resignation as Canada’s ambassador to China.”

The veteran diplomat, Mr Trudeau added, had served Canadians honourably and with distinction with many positions in cabinet.

He also thanked the diplomat and his family for their service.

What about the ambassador’s remarks?

Mr McCallum caused controversy on Tuesday when he publicly argued that the US extradition request for Ms Meng was seriously flawed.

The next day he issued a statement saying that he “misspoke” and regretted that his comments had created “confusion”.

But on Friday he was quoted as saying it would be “great for Canada” if the US dropped the request.

Mr McCallum was appointed Canada’s ambassador to China in 2017, stepping down as the immigration minister.

Canadian media say he was eager to take over the posting because of his strong personal connection to China.

Mr McCallum’s wife is ethnically Chinese, and he had a large Chinese-Canadian population in his former constituency in Ontario.

Mr McCallum also served as Canada’s defence minister in 2002-03.

What’s the latest on Meng Wanzhou’s case?

She was arrested on 1 December in Canada’s western city of Vancouver at the request of the US.

She was later granted a C$10m (£5.7m; $7.6m) bail by a local court. But she is under surveillance 24 hours a day and must wear an electronic ankle tag.

Huawei's Meng WanzhouImage copyrightREUTERS
Image captionMeng Wanzhou denies all the allegations against her

Earlier this month, US officials confirmed they planned to pursue the extradition of Ms Wanzhou.

Washington has 60 days to file a formal demand for extradition, a deadline that will be reached 30 January.

China’s foreign ministry has urged US officials to withdraw the arrest order and refrain from moving ahead with the extradition request.

Ms Meng’s case has led to rising diplomatic tensions between Canada and China.

Michael Spavor (L) and Michael Kovrig (composite image)Image copyrightAFP
Image captionCanadian nationals Michael Spavor (left) and Michael Kovrig have been put under “compulsory measures”

Earlier this month, a Canadian man was sentenced to death in China after a court said a jail term of 15 years was too lenient.

Two other Canadians – businessman Michael Spavor and former diplomat Michael Kovrg – were arrested following the detention of Ms Meng.

Some China analysts believe that the arrests were a tit-for-tat response to her detention, a claim Chinese officials have denied.

Source: The BBC

26/01/2019

Huawei’s treatment by foreign countries ‘unfair and immoral’, China’s foreign minister say

  • Boycott of Chinese telecom giant’s products has ‘obvious political intentions’, Wang Yi says
  • Comments come as Britain’s Vodafone becomes latest Western firm to suspend purchases
PUBLISHED : Saturday, 26 January, 2019, 4:20pm
UPDATED : Saturday, 26 January, 2019, 4:20pm

The use of state power to smear or discredit a legitimate business is “not only unfair but also immoral”, China’s Foreign Minister Wang Yi said in Rome on Friday when asked to comment on the recent problems faced by Huawei Technologies.

“Considering the obvious political intentions and manipulation behind it, it is even more unacceptable,” he said, without naming the Chinese telecom equipment giant.

“I believe that all countries should be vigilant and resist this unreasonable practice, and such bullying,” he told reporters from China’s state media at the end of a three-day trip to France and Italy, according to an article on the ministry’s website.

“Of course, every country is entitled to protect their right to maintain information security, but they cannot use security as an excuse to damage or even strangle legitimate business operations,” he said.

“Companies are just companies, and the survival and development of companies must ultimately be determined by market competition. What governments have to do is to provide them with a fair, just and transparent business environment.”

Wang’s comments came after Vodafone Group became the latest Western company to boycott Huawei products. The British telecom conglomerate said on Friday it had suspended its purchases of the Chinese firm’s equipment for the core of its wireless networks.

Huawei is the world’s largest telecom equipment supplier and has been the subject of intense international scrutiny since its chief financial officer Sabrina Meng Wanzhou was arrested in Canada on December 1, pending extradition to the United States.

The US has sought to persuade its allies, including Japan, Australia and New Zealand, not to use Huawei products in their fifth-generation wireless networks, on the grounds Beijing could use them for spying. The telecom giant has denied any such links to the Chinese government.

During his low-key European tour, Wang met French President Emmanuel Macron on Wednesday before attending a ceremony with his opposite number Jean-Yves Le Drian to mark the 55th anniversary of the two countries establishing diplomatic ties on Thursday.

Wang ended his trip on Friday with a meeting in Rome with Italian Prime Minister Giuseppe Conte.

Source: SCMP

25/01/2019

Alibaba slams U.S. treatment of Huawei, efforts to curb China’s rise

HONG KONG (Reuters) – A senior Alibaba executive slammed the United States’ treatment of China’s Huawei Technologies [HWT.UL] as “extremely unfair”, saying measures by the country to curb the firm’s access to their markets was “very politically motivated”.

Joe Tsai, the e-commerce giant’s executive vice-chairman, also sharply criticised what he called an attempt by the U.S. government to curb China’s rise via a trade war.

He struck an optimistic note about China’s economy, saying it remained fundamentally strong despite a slowdown, and added that stimulus such as tax cuts needed to be imposed to prop it up even as it battles U.S. efforts to dent its businesses.

U.S. President Donald Trump’s administration has not only slapped crippling tariffs on Chinese imports, it has also stepped up scrutiny of Chinese investments in the country and torpedoed many deals citing national security concerns.

Huawei, the world’s biggest network equipment maker, has been caught up in the crosshairs, with the United States alleging its products could be used by Beijing for espionage.

SPONSORED

Huawei has repeatedly denied the allegation.

“I think what the American government and together with the Five Eyes Alliance – what they’re trying to do with Huawei – is a bit unfair, there’s definitely a political agenda behind it,” Tsai said at a Reuters BreakingViews event in Hong Kong.

The United States and its allies, Australia and New Zealand, have restricted Huawei’s access to their markers, while Canada and the United Kingdom are reviewing whether to curb access.

Last month, Meng Wanzhou, Huawei’s finance chief, was arrested in Canada, sparking a diplomatic row between Canada and China. She faces extradition to the United States.

Tsai, a Canadian passport holder, said he hoped the relationship between Canada and China would improve.

“I love Canadians, they’re great,” Tsai joked when asked about Meng’s arrest, calling it a politically charged question.

“ANTI-CHINA PROBLEM”

Relations between Washington and Beijing have deteriorated rapidly amid a tit-for-tat escalation in tariffs that has roiled financial markets and raised fears over the impact on global supply chains and investment plans.

“President Trump may have started it focussing on the trade deficit itself … but over the course of the last nine months it was blown into a bigger anti-China problem,” Tsai said, adding the trade war has spurred anti-China sentiment.

“It worries everybody.”

Alibaba has been previously critical of the trade war as well, with founder Jack Ma calling the spat the “most stupid thing in the world.”

The company, which promised in 2017 to create a million U.S. jobs, backed out last year, blaming the trade war.

Tsai said U.S. regulators had made it very difficult for Alibaba to make investments in the country, adding that the company would look at other parts of the world for investment.

Just last year, a U.S. government panel rejected a bid by Ant Financial, which Ma owns together with Alibaba executives, to buy U.S. money transfer company MoneyGram International Inc on national security concerns.

Among the most high-profile Chinese deals to be scuttled under the Trump administration, the $1.2 billion deal’s failure was a major blow for Ma, who was looking to expand Ant’s footprint amid fierce competition back home from rival Tencent Holdings Ltd’s WeChat.

CHINA OPTIMISM

Brushing aside the pains of the trade war, Tsai said people were over worried about China’s economy. Chinese consumers are still fundamentally very strong and consumption in China is going to grow over the next 5-10 years, he said.

Comments from Tsai come at a time when China’s economic growth has slowed to its weakest pace in nearly three decades amid faltering domestic demand and bruising U.S. tariffs.

Growth is expected to ease further this year.

Tsai said Alibaba will continue to invest aggressively despite the uncertain business environment.

Asia’s second most valuable public company has been investing heavily in offline retail and rural e-commerce to win new customers as China’s urban market shows signs of saturation.

24/01/2019

China blasts U.S. “technology bullying” with Huawei CFO extradition

BEIJING, Jan. 23 (Xinhua) — China on Wednesday said the U.S. plan to extradite Meng Wanzhou, Huawei chief financial officer, from Canada did not comply with international law or have legitimacy.

The remarks came as Foreign Ministry spokesperson Hua Chunying reiterated China’s position on the Meng Wanzhou case at a press briefing.

Hua said the U.S. request for Meng’s extradition was essentially related to U.S. sanctions against Iran.

“Huawei has stated for many times that it has complied with all laws and regulations of the country in which it operates,” Hua said.

She stressed that China had consistently opposed the U.S. unilateral sanctions against Iran and unilateral sanctions against Iran outside the framework of the UN Security Council, which are not in line with international law and are opposed by the world, including U.S. allies.

“Canada is also opposed to this issue,” Hua said. “The U.S. act is highly political which is essentially technology bullying, and its purpose is to do everything in its power to suppress Chinese high-tech enterprises and contain China’s legitimate development rights.”

She said people of insight and a sense of justice in the international community should resolutely oppose it.

Source: Xinhua

22/01/2019

U.S. to formally seek extradition of Huawei executive Meng Wanzhou – Globe and Mail

(Reuters) – The United States will proceed with the formal extradition from Canada of Huawei executive Meng Wanzhou, Canada’s ambassador to the United States told the Globe and Mail, as Beijing vowed to respond to Washington’s actions.

The deadline for filing is Jan. 30, or 60 days after Meng was arrested on Dec. 1 in Vancouver.

Meng, the daughter of Huawei Technologies Co Ltd founder Ren Zhengfei, was arrested at the request of the United States over alleged violations of U.S. sanctions on Iran. She was released on bail last month and is due in court in Vancouver on Feb. 6.

Relations between China and Canada turned frosty after the arrest, with China detaining two Canadian citizens and sentencing to death a Canadian man previously found guilty of drug smuggling.

Beijing has not tied any of the three Canadians’ cases to Meng’s arrest, but has warned of severe consequences if she was not immediately released. Western and former Canadian diplomats have said they have no doubt the cases are linked.

Huawei, the world’s biggest maker of telecommunications equipment, said it had no comment on ongoing legal proceedings when contacted by Reuters on Tuesday. A U.S. Justice Department spokesman said: “We will comment through our filings.”

The Canadian Justice Department did not immediately respond to a request for comment outside regular business hours.

China’s Foreign Ministry on Tuesday reiterated calls for Meng’s immediate release and said her case clearly was “not a regular judicial case”.

Anyone with fair judgment would determine that Canada made a “serious mistake” in this matter, ministry spokeswoman Hua Chunying told a regular news briefing.

“Canada and the United States arbitrarily abused their bilateral extradition treaty to seriously infringe upon a Chinese citizen’s security and legal rights,” Hua said.

China “strongly urges” the United States to correct its “mistake”, cancel the arrest order for Meng, and not make a formal extradition request, she added.

Asked if China would retaliate against the United States if Meng is extradited, Hua said, “China will, of course, respond to U.S. actions.” She did not elaborate.

“PAYING THE PRICE”

Canada is one of over 100 countries with which the United States has extradition treaties.

Once a formal request is received, a Canadian court must determine within 30 days if there is sufficient evidence to support extradition, and Canada’s Minister of Justice must give a formal order.

In an article published on Monday, a former Canadian spy chief said Canada should ban Huawei from supplying equipment for next-generation telecoms networks, while Canada’s government is studying any security implications.

Some of Canada’s allies such as the United States and Australia have already imposed restrictions on using Huawei equipment, citing the risk of it being used for espionage.

Huawei has repeatedly said such concerns are unfounded, while China’s ambassador to Canada last week said there would be repercussions if Ottawa blocked Huawei.

In Monday’s interview, MacNaughton said he had complained to the United States that Canada was suffering from Chinese revenge for an arrest made at the U.S.’s request.

“We don’t like that it is our citizens who are being punished,” the Globe and Mail cited MacNaughton as saying. “(The Americans) are the ones seeking to have the full force of American law brought against (Ms. Meng) and yet we are the ones who are paying the price. Our citizens are.”

Canadian Prime Minister Justin Trudeau previously said China was arbitrarily using the death penalty and called on world leaders to raise concerns about the detained Canadians.

Source: Reuters

15/01/2019

Canadian’s death sentence in China ‘horrific’, family says

Robert Lloyd Schellenberg (centre) listens during his retrial in Dalian's court. Photo: 14 January 2019Image copyrightAFP/GETTY IMAGES
Image captionRobert Lloyd Schellenberg was sentenced to jail last year but had his case suddenly reviewed

The family of a Canadian man who has been sentenced to death in China say their “worst fears” have been realised.

Robert Lloyd Schellenberg was given a 15-year jail term in November but, on Monday, a court said the sentence for drug smuggling was too lenient.

The ruling is likely to worsen a diplomatic row between the countries.

Last month, Canada arrested a top official at the Chinese telecoms giant Huawei, Meng Wanzhou, on a request from the United States.

The detention of Ms Meng, 46, last month angered China and soured its relations with both Canada and the US.

Following Schellenberg’s death sentence, Canada has updated its travel advice for China, urging citizens to “exercise a high degree of caution due to the risk of arbitrary enforcement of local laws”.

Schellenberg’s aunt, Lauri Nelson-Jones said the death sentence was “a horrific, unfortunate, heartbreaking situation”.

“It is our worst case fear confirmed,” she added. “It is rather unimaginable what he must be feeling and thinking.”

Canadian Prime Minister Justin Trudeau condemned the ruling.

“It is of extreme concern to us as a government, as it should be to all our international friends and allies, that China has chosen to begin to arbitrarily apply the death penalty,” he said in a statement.

China’s foreign ministry said it was “strongly dissatisfied” with Mr Trudeau’s remarks, and said Canada should respect China’s sovereignty.

Schellenberg has 10 days to launch an appeal and his lawyer told Reuters news agency that he would probably do so.

What is Schellenberg’s case about?

The Canadian, who is believed to be 36, was arrested in 2014 and accused of planning to smuggle almost 500lb (227kg) of methamphetamine from China to Australia.

He was sentenced to 15 years in prison in November but, following an appeal, a high court in the north-eastern city of Dalian on Monday sentenced him to death.

The Dalian Intermediate People's CourtImage copyrightGETTY IMAGES
Image captionThe court in north-eastern China where Schellenberg’s case was reviewed

“I am not a drug smuggler. I came to China as a tourist,” Schellenberg said just before the verdict was announced, the AFP news agency reports.

China is believed to execute more people annually than any other country, but is highly secretive about the number.

Human rights group Amnesty International puts the figure in the thousands – more than the rest of the world’s nations put together.

A number of foreigners have been executed for drug-related offenses in the past, including British man Akmal Shaikh, who was executed in 2009 despite claims he was mentally ill, and an appeal for clemency from the UK prime minister.

What’s the bigger picture?

Relations between China and Canada have deteriorated rapidly since the arrest of Ms Meng in Vancouver on 1 December.

She was granted bail by a Canadian court several days later but remains under constant surveillance and must wear an electronic ankle tag.

Ms Meng, who is the daughter of Huawei’s founder, is accused in the US of using a subsidiary of the company called Skycom to evade sanctions on Iran between 2009 and 2014.

She denies any wrongdoing and says she will contest the allegations.

Huawei executive Meng Wanzhou. File photoImage copyrightREUTERS
Image captionMeng Wanzhou is the daughter of Huawei’s founder

In the weeks that followed her arrest China detained two other Canadian citizens.

Former diplomat Michael Kovrig and businessman Michael Spavor face accusations of harming national security.

China has denied the detention of the two men is tied to Ms Meng’s arrest, but many analysts believe it is a tit-for-tat action.

Donald Clarke, a specialist in Chinese law at George Washington University, said that Schellenberg’s death sentence appeared to be “an unprecedented step in China’s diplomacy”.

“I have seen cases I considered unjust before, but I cannot recall a previous case that looked so clearly unconnected to the defendant’s guilt or innocence,” Prof Clarke told the BBC’s Chinese service.

China began working hard to push Schellenberg’s case to international prominence, taking the highly unusual step of inviting foreign journalists into the court, the BBC’s John Sudworth in Beijing reports.

And despite the Canadian’s insistence that he is innocent, his retrial lasted just a day, with his death sentence being announced barely an hour after its conclusion, our correspondent says.

An editorial in the nationalist state-backed Chinese newspaper Global Timeson Tuesday said “unreasonable speculation” in Western media linking his case to Ms Meng’s showed “rude contempt toward Chinese law”.

“The trial will also send the message that China won’t yield to outside pressure in implementing its law,” it said.

However, back in December, the editor of the Global Times warned that China would “definitely take retaliatory measures against Canada” if Ms Meng were not released.

Hu Xijin said in a video posted on the Global Times website: “If Canada extradites Meng to the US, China’s revenge will be far worse than detaining a Canadian.”

13/12/2018

Canadian Michael Spavor detained in China as Huawei row continues

Michael Spavor with North Korean leader Kim Jong-un (2013)Image copyrightAFP
Image captionMr Spavor met North Korea’s Kim Jong-un during his 2013 visit to Pyongyang

A second Canadian has been detained in China on the same accusation of harming national security, as tension continues between the two countries.

It was confirmed on Thursday that Michael Spavor, a businessman, had been detained in addition to former diplomat Michael Kovrig.

Canada drew Chinese protests after it arrested an executive at telecoms giant Huawei at the request of the US.

Meng Wanzhou has been bailed but may face extradition for fraud.

She denies violating US sanctions on Iran through Huawei’s business dealings and China has threatened unspecified consequences if she is not released.

So high-profile is the case that US President Donald Trump has said he could intervene if it helps to avoid a further decline in US relations with China.

Who are the two Canadians?

Michael Spavor is a businessman based in Dandong, near the Chinese border with North Korea. He has deep ties to the North Korean government.

Ex-diplomat Michael Kovrig currently works for a think tank, the International Crisis Group (ICG), which has said it is concerned for his health and safety.

Presentational grey line

Timeline of events

1 December: Meng Wanzhou arrested in Canadian city of Vancouver at the request of the US as part of an inquiry into alleged sanctions-busting by her company Huawei

10 December: Canadian former diplomat Michael Kovrig arrested in Beijing “on suspicion of engaging in activities that harm China’s state security”

11 December: Meng Wanzhou released on bail but still faces the prospect of extradition to the US

12 December: China confirms the detention of businessman Michael Spavor for “activities that endanger China’s national security”, saying the investigation began on 10 December

Presentational grey line

He is being held officially “on suspicion of engaging in activities that harm China’s state security”.

Michael KovrigImage copyrightAFP
Image captionMichael Kovrig was working for a think tank that focuses on conflict reduction research

However, a Chinese foreign ministry spokesman, Lu Kang, suggested another reason, saying the ICG had not been registered as a non-governmental organisation in China and therefore it was unlawful for its staff to work there.

Canadian Foreign Minister Chrystia Freeland has said Mr Kovrig’s case was raised directly with Chinese officials.

Foreign ministry spokesman Guillaume Bérubé confirmed that Mr Spavor had contacted them earlier in the week because “he was being asked questions by Chinese authorities”.

Canada is working hard to determine Mr Spavor’s whereabouts, Mr Bérubé said.

Michael Spavor (L) in North Korea with former NBA star Dennis Rodman (right) (3 Sept 2013)Image copyrightAFP
Image captionMichael Spavor (left) helped arrange ex-NBA star Dennis Rodman’s trip to North Korea in 2013

China state media confirmed on Thursday that, as with the previous arrest, Mr Spavor was under investigation on suspicion of “engaging in activities that endanger China’s national security”.

Mr Spavor runs an organisation called Paektu Cultural Exchange, which organises business, culture and tourism trips to North Korea.

He is a regular visitor to North Korea and regularly comments in the media on Korean issues. He is particularly well known for helping to arrange the visit by former NBA star Dennis Rodman to North Korea in 2013.

Rodman is a personal friend of North Korean leader Kim Jong-un.

One of Mr Spavor’s last tweets, on Sunday, said he was about to travel to Seoul in South Korea, but he did not arrive on Monday as planned.

Why was Meng arrested?

The former Canadian resident was detained in Vancouver where she has family and property connections.

She was granted bail of C$10m (£6m; $7.4m) on Tuesday but could still be extradited to the US.

Court sketch of Meng Wanzhou during her bail hearing in Vancouver, British Columbia, Canada 7 December 2018Image copyrightREUTERS

The US has been investigating Huawei, one of the world’s largest smartphone makers, since 2016, believing that it used a subsidiary to bring US manufacturing equipment and millions of dollars in transactions to Iran illegally.

The Supreme Court of British Columbia was told Ms Meng had used a Huawei subsidiary called Skycom to evade sanctions on Iran between 2009 and 2014.

She had allegedly misrepresented Skycom as being a separate company.

Ms Meng faces up to 30 years in prison in the US if found guilty of the charges, the Canadian court heard.

Are the arrests in China an act of retaliation?

After the detention of Mr Kovrig, Canada said there was no “explicit indication” of any link to the Meng case but China experts doubted that it was just a coincidence.

Guy Saint-Jacques, Canada’s former ambassador to China, told Canadian broadcaster CBC: “In China there are no coincidences… If they want to send you a message, they will send you a message.”

Speaking on condition of anonymity, a Western diplomat in China told Reuters news agency: “This is a political kidnapping.”

Asked if the detention of the two Canadians was in response to Ms Meng’s arrest, China’s foreign ministry spokesman described it as an “operation taken by China’s relevant national security authorities in accordance with the laws”.

Lu Kang said Ms Meng’s arrest was “wrong practice”, adding: “I can point out that, since the Canadian government took the wrong action at the request of the US and took Meng Wanzhou into custody, many Chinese are wondering if their trips to Canada are safe.”

Related Topics

More on this story

  • Huawei: The life of Chinese tech heiress Meng Wanzhou
    11 December 2018
  • Canada is seeking consular access to ex-diplomat detained in China
    12 December 2018
  • Huawei arrest puts ‘bullseye’ on Apple
    11 December 2018

China

07/12/2018

Japan government to shun Huawei, ZTE equipment

TOKYO (Reuters) – Japan plans to ban government purchases of equipment from China’s Huawei Technologies Co Ltd [HWT.UL] and ZTE Corp (0763.HK) (000063.SZ) to beef up its defences against intelligence leaks and cyber attacks, sources told Reuters.

FILE PHOTO: A security guard walks past a building of ZTE Beijing research and development center in Beijing, China June 13, 2018. REUTERS/Jason Lee

Chinese tech companies are under intense scrutiny from Washington and some prominent allies over ties to the Chinese government, driven by concerns they could be used by Beijing for spying.

A government ban in Japan will come after Huawei has already been locked out of the U.S. market and after Australia and New Zealand have blocked it from building 5G networks. Huawei has repeatedly insisted Beijing has no influence over it.

The Yomiuri newspaper, which first reported the news of Japan’s planned ban earlier on Friday, said the government was expected to revise its internal rules on procurement as early as Monday.

The government does not plan to specifically name Huawei and ZTE in the revision, but will put in place measures aimed at strengthening security that apply to the companies, a person with direct knowledge and a person briefed on the matter said.

Japan’s chief government spokesman, Yoshihide Suga, declined to comment. But he noted that the country has been in close communication with the United States on a wide range of areas, including cybersecurity.

“Cybersecurity is becoming an important issue in Japan,” he told a regular news conference. “We’ll take firm measures looking at it from a variety of perspectives.”

ZTE declined to comment. Huawei did not immediately comment.

Huawei supplies some network equipment to private Japanese telcos NTT Docomo (9437.T) and KDDI Corp (9433.T).

And SoftBank Group Corp (9984.T) has a long relationship with Huawei – which in 2011 became the first Chinese firm to join Japan’s conservative Keidanren business lobby – and has partnered with it on 5G trials.

“The government will not buy where there are security concerns but it is difficult to restrict procurement by private companies,” one of the sources said.

Docomo and SoftBank did not immediately respond to a request for comment.

“While closely observing changes we will consider appropriate steps,” a KDDI spokeswoman said.

Some private companies elsewhere, though, have distanced themselves from the Chinese firms.

In the United States, SoftBank’s wireless subsidiary Sprint Corp (S.N) said it no longer sources equipment from Huawei or ZTE. SoftBank is trying to complete the unit’s sale to T-Mobile US Inc TMUS.N.

And Britain’s BT Group (BT.L) said on Wednesday it was removing Huawei’s equipment from the core of its existing 3G and 4G mobile operations and would not use the company in central parts of the next network.

ZTE’s Shenzhen-listed shares rose 1.4 percent on Friday after sliding 5.7 percent the previous day amid a global stocks sell-off sparked by the arrest in Canada of Huawei’s top executive at the behest of the United States. Huawei is unlisted.

Reporting by Yoshiyasu Shida and Yoshifumi Takemoto; Additional reporting by Kaori Kaneko and Sijia Jiang; Writing by Sam Nussey and Chris Gallagher; Editing by Himani Sarkar and Muralikumar Anantharaman

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