Archive for ‘spy’

16/05/2019

Trump administration hits China’s Huawei with one-two punch

WASHINGTON/NEW YORK (Reuters) – The Trump administration on Wednesday took aim at China’s Huawei Technologies Co Ltd, banning the firm from buying vital U.S. technology without special approval and effectively barring its equipment from U.S. telecom networks on national security grounds.

Taken together, the two moves threaten Huawei’s ability to continue to sell many products because of its reliance on American suppliers, and represents a significant escalation in the U.S. government’s worldwide campaign against the company.

The steps also come at a delicate time in relations between China and the United States as the world’s two largest economies ratchet up tariffs in a battle over what U.S. officials call China’s unfair trade practices.

Washington believes the handsets and network equipment for telecommunications companies made by Huawei could be used by the Chinese state to spy on Americans.

Huawei, which has repeatedly denied the allegations, said in a statement that “restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger; instead, this will only serve to limit the U.S. to inferior yet more expensive alternatives, leaving the U.S. lagging behind in 5G deployment.”

“In addition, unreasonable restrictions will infringe upon Huawei’s rights and raise other serious legal issues.”

The ban on U.S. suppliers, which appears similar to one on Huawei rival ZTE Corp. last year, could hit the shares of Huawei’s biggest U.S. suppliers, including chipmakers Qualcomm Inc and Broadcom Inc (AVGO.O).

In the first action taken on Wednesday, President Donald Trump signed a long-awaited executive order declaring a national emergency and barring U.S. companies from using telecommunications equipment made by firms posing a national security risk.

The order invoked the International Emergency Economic Powers Act, which gives the president the authority to regulate commerce in response to a national emergency that threatens the United States. It directs the Commerce Department, working with other government agencies, to draw up an enforcement plan by October.

Members of Congress said Trump’s order was squarely aimed at Chinese companies like Huawei, which generated $93 billion in revenue last year and is seen as a national champion in China.

“China’s main export is espionage, and the distinction between the Chinese Communist Party and Chinese ‘private-sector’ businesses like Huawei is imaginary,” Republican Senator Ben Sasse said.

ENTITY LIST

Soon after the White House announced the order had been signed, the Commerce Department said it had added Huawei and 70 affiliates to its so-called Entity List – a move that bans the telecom giant from buying parts and components from U.S. companies without U.S. government approval.

U.S. officials told Reuters the decision would make it difficult, if not impossible, for Huawei, the largest telecommunications equipment producer in the world, to sell some products because of its reliance on U.S. suppliers. It will take effect in the coming days.

Commerce Secretary Wilbur Ross said in a statement Trump backed the decision that will “prevent American technology from being used by foreign owned entities in ways that potentially undermine U.S. national security or foreign policy interests.”

With Huawei on the Entity List, U.S. suppliers will need to apply for licenses to provide the Chinese company with anything subject to U.S. export control regulations. Obtaining such licenses will be difficult because they will have to show the transfer of items will not harm U.S. national security, said John Larkin, a former export control officer in Beijing for the Commerce Department.

The United States in January unsealed a 13-count indictment against Huawei accusing the company and its chief financial officer of conspiring to defraud global financial institutions by misrepresenting Huawei’s relationship with a suspected front company that operated in Iran.

The indictment was unsealed a month after CFO Meng Wanzhou was arrested in Canada on a U.S. warrant for her role in the alleged fraud. Meng, who maintains her innocence, is fighting extradition.

5G NETWORKS

Reuters reported on Tuesday that Trump was expected to sign his long-awaited executive order this week. The order does not specifically name any country or company, but U.S. officials have previously labeled Huawei a “threat”.

The United States has been actively pushing other countries not to use the Chinese company’s equipment in next-generation 5G networks that it calls “untrustworthy.” In August, Trump signed a bill that barred the U.S. government from using equipment from Huawei and another Chinese provider, ZTE Corp.

ZTE was added to the Commerce Department’s Entity List in March 2016 over allegations it organised an elaborate scheme to hide its re-export of U.S. items to sanctioned countries in violation of U.S. law.

The restrictions prevented suppliers from providing ZTE with U.S. equipment, potentially freezing the company’s supply chain, but the restrictions were suspended in a series of temporary reprieves, allowing the company to maintain ties to U.S. suppliers until it agreed to a plea deal a year later.

The status of Huawei and ZTE has taken on new urgency as U.S. wireless carriers rollout 5G networks.

While the big wireless companies have already cut ties with Huawei, small rural carriers continue to rely on both Huawei and ZTE switches and other equipment because they tend to be cheaper. Trump’s order applies to future purchases and does not address existing hardware, officials said Wednesday.

Source: Reuters

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15/03/2019

Li Keqiang says decoupling from US ‘not realistic’, denies China would ask tech firms to spy

  • Premier refutes spying suggestion, saying it is ‘not how China behaves’ and that Beijing would never require Chinese companies to do so
  • He says ‘the whole world would like to see’ resolution to tariff war with mutually beneficial outcomes
Premier Li Keqiang admitted relations between China and the US had seen some “twists and turns”, particularly over trade. Photo: Simon Song
Premier Li Keqiang on Friday said economic decoupling from the United States was “not realistic”, while refuting claims that Beijing would ever require Chinese tech companies to spy on foreign governments or individuals.
During a news conference in Beijing at the end of the annual legislative meetings, Li admitted relations between China and the US had recently seen “twists and turns”, particularly over trade, but said he hoped ongoing negotiations to resolve the tariff war would deliver mutually beneficial outcomes.
“I believe that result is also what the whole world would like to see,” he said. “As two large economies, China and the US have become closely entwined through years of growing their relationship and years of cooperation. It is neither realistic nor possible to decouple the two economies.”
While the world’s two largest economies have held off on applying further tariffs this year, multiple rounds of discussion in Beijing and Washington have yet to yield a trade deal to resolve the dispute – one the US hopes will be address issues including its trade deficit with China, market access, industrial subsidies, intellectual property protection, forced technology transfers, and cybertheft. Chinese Vice-Premier Liu He spoke by phone with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday and they made “concrete progress” towards a deal, according to state news agency Xinhua.
But as trade tensions have played out, Washington’s hawks have pushed for a “decoupling” between the two economies or at least a “partial decoupling” in the hi-tech sphere.
Premier Li Keqiang reassures Hong Kong over mainland China’s foreign investment law

Li on Friday also rejected the claim that Beijing had or would mandate Chinese tech companies to assist in spying on foreign governments or individuals, a key concern for countries considering using hi-tech equipment from China in sensitive sectors.

The premier initially sidestepped a question about Chinese technology spying, but later made a point to go back and “very explicitly respond” to it after taking a separate question about China’s economic reform.

“Let me tell you explicitly that this is not consistent with Chinese law. This is not how China behaves,” Li said. “We did not do that, and we will not do that in the future.”

His comments come as the US has been pushing for a ban on the use of Chinese telecoms giant Huawei’s technology in critical 5G networks over national security concerns, with US Secretary of State Mike Pompeo warning European countries in February that using the company’s equipment could hurt their ties with Washington.
In recent months, Huawei has come under growing scrutiny and pressure, with the US levelling serious fraud charges against the company and its executive Sabrina Meng Wanzhou related to alleged violations of US sanctions on Iran. Washington has ordered Meng be extradited from Canada, where she remains awaiting extradition proceedings.
Huawei pleads not guilty to US charges of bank fraud and violating Iran sanctions in case that triggered a global firestorm
Huawei’s founder and president Ren Zhengfei, who is also Meng’s father, has claimed in interviews that he would “definitely” refuse any requests by the Chinese government to hand over user data. But observers have been sceptical that the tech giant would be able to refuse these requests from Beijing, which has responded strongly to the actions taken against Huawei, including with what has been seen as the reciprocal detentions of two Canadians in China – former diplomat Michael Kovrig and businessman Michael Spavor.
Li’s annual press conference on Friday – an event where questions are carefully screened and planned in advance – comes after the conclusion of the yearly gathering for the National People’s Congress, a largely rubber-stamp legislative body. National delegates also voted to approve a new foreign investment law that touched on intellectual property and technology transfer concerns raised by the US, although foreign business bodies warned that the legislation was vague and pushed through quickly in light of the trade war.
As businesses and market watchers look to a proposed summit between Chinese President Xi Jinping and his US counterpart Donald Trump at the Mar-a-Lago estate in Florida to clinch a trade deal, Li stressed that China was seeking cooperation rather than confrontation.
“We need to continue to follow the principles of cooperation before confrontation, mutual respect, equality, and mutual benefit to continue to grow the China-US relationship, including their economic and trade ties,” Li said. “As for their differences and disagreements, we have confidence that people of the two countries have the wisdom and the capability to defuse their differences and manage them properly to pursue steady and sound growth of the US-China relationship.”
Source: SCMP
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