The Case Against Huawei and Chinese Technology Companies

The Chinese company Huawei has a huge public relations problem: article after article reveal more evidence and concerns about spying, industrial espionage, intellectual property theft, and threats if they are not awarded the next 5G contract.

Countries are slowly realising that Huawei is not independent of the Chinese government, but is an integral arm of Chinese state policy.

In August 2018, The Australian government banned Huawei from participation in the deployment of 5G networks in Australia. The Australian decision was influenced by the understanding that Huawei is required under Chinese law to co-operate with Chinese government directives; and the Australian government determined that China had the intent and capability to use Huawei to further Chinese national interests at the expense of Australia.

However, there is evidence associating Huawei with industrial espionage, intellectual property theft, and even spying extending back to the 1990s.

Huawei is not an isolated case: under Chinese law, all Chinese technology companies are required to co-operate with Chinese government directives, and are actively used to further China’s national interests; for years, China Telecom has been involved in illegal re-routing of global internet traffic through Chinese controlled networks; and many other Chinese technology companies are involved in surveillance and control systems deployed against ethnic minorities, and are involved in broadcasting pro-government propaganda.

Huawei - Spying, Industrial Espionage, and Theft of Intellectual Property:

Aug 2020, American Affairs Journal, vol. IV, number 3; in 2008, Hanjuan Jin, a former Motorola employee, was stopped at O’Hare Airport with over a thousand Motorola documents in her possession—she was traveling to China on a one-way ticket.

July 2020 Bloomberg;  in the late 1990s, the Canadian Security Intelligence Service suspected that hackers in China were stealing IP from Nortel. By 2004, hackers had stolen the password of Nortel’s CEO and those of six others from Nortel’s optical unit. Using a script called Il.browse, the hackers gained access to product development, research and development, design documents, minutes, and more. Using Nortel’s CEO's password they had transferred 800 commercially sensitive files to an IP address registered to Shanghai Faxian Corp., which was a front company with no known business dealings with Nortel.

When the Canadian Defence Department took over the Nortel building after it went bankrupt, they discovered that listening bugs had been planted. (Aug 2020, American Affairs Journal, vol. IV, number 3)

Concurrent with the attack on Nortel, Huawei poached Nortel’s biggest customers and, eventually, hired away the researchers who would give it the lead in 5G networks. Industrial espionage had bankrupted Nortel.

13th Feb, 2020 New York Times;  US charges Huawei with ‘Racketeering’ and conspiracy to steal trade secrets from six US companies: Cisco Systems; Motorola; Fujitsu; Quintel Technology; T-Mobile; CNEX Labs. 

The indictment states that in 2004, a Huawei employee secretly returned to a Chicago trade show to steal a competitor’s technology. The employee “was discovered in the middle of the night after the show had closed for the day in the booth of a technology company” and was found “removing the cover from a networking device and taking photographs of the circuitry inside.” The individual wore a badge listing his employer as “Weihua” — an anagram of Huawei. 

In another incident, mentioned in the indictment, Huawei invited a data storage technology company to give a presentation on its technology. Huawei took the presentation content and immediately shared it with engineers at its subsidiary working on a competing product. 

The NYT article also notes that Quintel sued Huawei in 2015, claiming it had stolen its antenna technology. The litigation was settled in 2018. Motorola settled intellectual-property lawsuits with Huawei in 2011.

11th Jan, 2019 The Guardian;  Poland arrested a Huawei employee on charges of spying for China.

14th Aug, 2019 CNBC;  Huawei employees helped African governments spy on political opponents by using cell data to track their location and intercept encrypted communications and social media, a Wall Street Journal investigation found.

29th Jan, 2019 NPR;  reported that in May 2017 Huawei was successfully sued by T Mobile US for industrial espionage. Huawei employees made several attempts to acquire information and covert photographs of T Mobile’s Tappy technology; in 2013, one Huawei employee stole part of the technology. NPR also reported that in July 2013, Huawei China launched a formal policy of awarding bonuses to employees who stole confidential information from competitors. It emphasized, the indictment noted, "that no employees would be punished for taking actions in accordance to the policy.”

13th Jan, 2013 Reuters;  reported on the connection between Huawei and Skycom. Skycom attempted to circumvent sanctions and sell embargoed HP equipment to Iran.

22nd July, 2010 Reuters;  in 2008, Motorola sued Huawei and Lemko Corp. for theft of trade secrets. Motorola claimed that engineers had shared trade secrets with Lemco, and an engineer shared information about a Motorola transceiver and other technology with Huawei’s founder. Further, email trails showed that “Huawei and its officers knew they were receiving stolen Motorola proprietary trade secrets and confidential information without Motorola’s authorization and consent.”

23rd Jan, 2003 Computerworld;  CISCO announces legal action against Huawei for IP theft. Within a few months of filing suit, Cisco obtained a worldwide injunction against sale by Huawei of products, including code for a Cisco-proprietary routing protocol called EIGRP, and Huawei publicly admitted that the code had been used in their products and they pledged to stop. (ZDNET; 12th Oct 2012)

China Telecom - Border Gate Protocol (BPG) Manipulation and Re-routing of Global Internet Traffic:

China and Russia collectively represent the most potent cyber and hybrid warfare threat against the west. China has military units dedicated to cyber espionage and IP theft.

Cyberwarfare has a completely different strategic risk profile to all forms of armed conflict. The Chinese PLA has dedicated cyberwarfare units that have been operating against many nations with impunity; it has largely focussed on IP theft, espionage, and re-routing global internet and Telco data traffic via Chinese servers. To China, cyberwarfare is a very productive, low level, and low risk form of attack without it actually being declared war!

20th Nov, 2018 Sydney Morning Herald;  researchers from Tel Aviv University, and the US Naval War College uncovered that between 6th and 13th of June 2017, China, through China Telecom, had illegally re-routed internet traffic from Europe and North America, destined for Australia, through Chinese mainland servers. The target of the attack was suspected to be a UK cyber-security company with offices in Australia.

Further, the researchers issued a report Titled ‘China’s Maxim–Leave No Access Point Unexploited: The Hidden Story of China Telecom’s BGP Hijacking’. in which they claimed the Chinese government has brazenly used China Telecom for years to divert large volumes of traffic to China-controlled networks before delivery to final destination. The report named four specific routes—Canada to South Korea, US to Italy, Scandinavia to Japan, and Italy to Thailand—that were reportedly manipulated between 2015 and 2017 as a result of BGP manipulation activities by China Telecom.

7th Nov, 2018 Ars Technica;  provides details of several instances involving China Telecom redirecting US internet traffic via mainland China. For about one week from 3rd Dec 2017, internet traffic originating in Los Angeles first passed through a China Telecom facility in Hangzhou, China, before reaching its destination in Washington, DC.

This incident coincided with a redirection starting in 2015, and lasting for 30 months, where the autonomous system belonging to China Telecom, incorrectly managed the routing announcements of Verizon's Asia-Pacific autonomous system. The mishandled routing announcements caused several international carriers—including Telia’s, Tata’s, GTT’s, and Vodafone’s autonomous systems—to send data destined for Verizon Asia-Pacific through China Telecom, rather than using the normal multinational telecoms.

10th Nov, 2014 Ars Technica;  reported Russian domestic internet traffic was forced through China Telecom’s routers.

Chinese Technology Companies Are Integral to China’s Authoritarian Surveillance and Control System:

Over the past 12 months (2019) in Australia and New Zealand, China's active interference in the political process, disinformation, and attempts to bribe officials, and intimidate critics has been widely reported.

Under Chinese law, all Chinese companies are required to engage in activities as required by the government; this includes, spying, espionage, IP theft, etc.

May 2020, The Swedish Institute for International Affairs published a report that provides a very detailed analysis of how the Chinese party-state can exercise control over Huawei. Huawei is a fully privately owned company, but the author concludes that the owners do not have complete control over it.

All Chinese tech companies have deep ties to the Chinese state security system (ASPI, Nov 2019)

17th Dec 2020, Australian Strategic Policy Institute, 'Should Australia Be Buying Border-Security technology from China's Nutech?'; Chinese company Nutech is dominant in border-control and security-screening technologies globally.

Nuctech is connected to China’s state-owned defence sector. Nuctech’s parent company, Tsinghua Tongfang, is controlled by one of China’s largest defence entities, the China National Nuclear Corporation. Two other CNNC subsidiaries, China Nuclear Power Technology Research Institute and Baotou Guanghua Chemical Industrial Corporation, are on the US Entity list.

In Xinjiang, Nuctech supplies public security equipment to the regional government. It has also installed highways with at least 40 sets of X-ray inspection systems and installed passenger-screening equipment at transport terminals.

Government subsidies have enabled Nuctech to embark on a deliberate policy of undercutting overseas competitors to fuel dramatic global growth

June 2020, an Australian Broadcasting Corporation article reports that Huawei shares technology and data with Global Tone Communications (GTCOM) a global data mining company which is majority owned by the Chinese government. GTCOM is also in partnership with Chinese company Hayun Data which provides technology for the surveillance of minority ethnic Muslim Uyghurs in Xinjiang province.

28th Nov, 2019 Australian Strategic Policy Institute report;  Huawei is involved in the surveillance state deployments in Xinjiang; “Huawei’s work in Xinjiang is extensive and includes working directly with the Chinese Government’s public security bureaus in the region,” 

The ASPI report also notes Dahua Technology, iFlytek, Megvii Technology, SenseTime, Xiamen Meiya Pico Information Co. Ltd, Yitu Technologies and Hikvision were added to the US Entity List because of their roles in human rights violations in Xinjiang.

Chinese technology companies active in Xinjiang are also involved in propaganda and other coercive measures; the ASPI report states.

The ASPI report mentions that ByteDance—which is not on the US entity list for human rights violations in Xinjiang—collaborates with public security bureaus across China, including in Xinjiang where it plays an active role in dispensing CCP propaganda on Xinjiang. ByteDance, has deployed a “public security and Internet social governance model” in Xinjiang under a strategic cooperation agreement with the Ministry of Public Security’s Press and Publicity Bureau.

Sept 2019, The Guardian;  revealed clear evidence of how ByteDance has been advancing Chinese foreign policy aims abroad through TikTok. The Guardian referred to leaked guidelines from TikTok laying out the company’s approach to content moderation. The documents showed that TikTok moderators were instructed to ‘censor videos that mention Tiananmen Square, Tibetan independence, or Falun Gong.

The ASPI report stated; Huawei has been working for the Karamay (Xinjiang) Police Department on cloud computing projects since 2011. Also, Huawei delivered the Modular Data Center for the Public Security Bureau of Aksu Prefecture in Xinjiang. Huawei also provides police in Xinjiang with technical support to help ‘meet the digitization requirements of the public security industry’. 

In May 2019, Huawei signed a strategic agreement with the state-owned media group Xinjiang Broadcasting and Television Network Co. Ltd. The agreement, which aims at maintaining social stability and creating positive public opinion, covered areas including internet infrastructure, smart cities and 5G. 

The ASPI report mentioned that in 2018, when the Xinjiang Public Security Department and Huawei signed the agreement to establish an ‘intelligent security industry’ innovation lab in Urumqi. Fan Lixin, a Public Security Department official, said at the signing ceremony that Huawei had been supplying reliable technical support for the department.

In 2016, Xinjiang’s provincial government signed a partnership agreement with Huawei.The agreement involved joint development of cloud computing and big-data industries in Xinjiang. As mentioned above, Huawei began to work in cloud computing in Karamay (a Huawei cloud-computing ‘model city’ in Xinjiang) as early as 2011 in several sectors, including public security video surveillance. Huawei was said to have built the police surveillance systems in Karamay and Kashgar prefectures in Xinjiang. (ASPI, 2019)

YITU provides its facial recognition and traffic monitoring software to Huawei’s smart cities solutions deployed in Xinjiang. (ASPI, 2019)

SenseTime, and Megvii provide surveillance technologies. (ASPI, 2019)

8th Dec, 2020 IPVM; IPVM discovered an internal Huawei technical report (Jan 8, 2018), the report is titled "Huawei Video Cloud Solution and Megvii Dynamic Face Recognition Interoperability Test Report. Huawei and Megvii collaborated on the testing and validation of a Uyghur identification system. ( 9th Dec 2020, Washington Post)

ZTE’s ‘safe city’ solution has been used in surveilance and policing. (ASPI, 2019)

In 2010, iFlytek set up a subsidiary in Xinjiang and a laboratory to develop speech recognition technology, especially in minority languages—technologies that are now used by the Xinjiang Government to track and identify minority population. iFlytek is a partially state-owned speech recognition company. (ASPI, 2019)

In 2014, Alibaba began to provide cloud computing technologies for the Xinjiang Government in areas of policing and counterterrorism. (ASPI, 2019)

Meiya Pico is a digital forensics and security company that created the mobile monitoring app MFSocket. MFSocket is the client application for Meiya Pico’s mobile phone forensics suite.

Once a person’s mobile phone is connected to the forensics terminal, the MFSocket app is pushed to the phone. When it’s installed, the operator is able to extract phone and personal user data from the phone, including contacts, messages, calendar events, call record data, location information, video, audio, a list of apps, system logs, and almost 100 software applications. Since, 2019, MFSocket has been forcibly installed onto peoples mobile phones across China from Xinjiang to Shanghai. (ASPI, 2019)

Hikvision and Dahua manufacture surveillance cameras deployed throughout China. (ASPI, 2019)

The ASPI report also states; Technology companies actively support state projects, even when those projects have nothing to do with technology . Also under the Xinjiang Aid umbrella, telecom companies such as China Unicom send their ‘most politically reliable’ employees to Xinjiang and deploy fanghuiju (访惠聚) units to villages in Xinjiang. ‘Fanghuiju’ is a government initiative that sends cadres from government agencies, state-owned enterprises and public institutions to regularly visit and surveil people.

The China Unicom fanghuiju units were reportedly tasked with changing the villages, including villagers’ thoughts that are religious or go against CCP doctrines.

Chinese Technology Companies Are Complicit In Genocide and Crimes Against Humanity:

Through their active involvement in the supply of enabling technologies and support to China’s Public Security Bureau Chinese technology companies are complicit in Genocide and Crimes Against Humanity.

The Australian Strategic Policy Institute (1st March, 2020) has identified 83 foreign and Chinese companies whose China supply chains incorporate slave labour transfer programs of ethnic minorities from Xinjiang, China: Abercrombie & Fitch, Acer, Adidas, Alstom, Amazon, Apple, ASUS, BAIC Motor, BMW, Bombardier, Bosch, BYD, Calvin Klein, Candy, Carter’s, Cerruti 1881, Changan Automobile, Cisco, CRRC, Dell, Electrolux, Fila, Founder Group, GAC Group (automobiles), Gap, Geely Auto, General Motors, Google, Goertek, H&M, Haier, Hart Schaffner Marx, Hisense, Hitachi, HP, HTC, Huawei, iFlyTek, Jack & Jones, Jaguar, Japan Display Inc., L.L.Bean, Lacoste, Land Rover, Lenovo, LG, Li-Ning, Marks & Spencer, Mayor, Meizu, Mercedes-Benz, MG, Microsoft, Mitsubishi, Mitsumi, Nike, Nintendo, Nokia, The North Face, Oculus, Oppo, Panasonic, Polo Ralph Lauren, Puma, Roewe, SAIC Motor, Samsung, SGMW, Sharp, Siemens, Skechers, Sony, TDK, Tommy Hilfiger, Toshiba, Tsinghua Tongfang, Uniqlo, Victoria’s Secret, Vivo, Volkswagen, Xiaomi, Zara, Zegna, ZTE. Some brands are linked with multiple factories.

The Final report of the China Tribunal (17th June, 2019) concluded that commission of Crimes Against Humanity against the Falun Gong and Uyghurs has been proved beyond reasonable doubt by proof of one or more of the following, legally required component acts:

murder; extermination; imprisonment or other severe deprivation of physical liberty in violation of fundamental rules of international law; torture; rape or any other form of sexual violence of comparable gravity; persecution on racial, national, ethnic, cultural or religious grounds that are universally recognised as impermissible under international law; and enforced disappearance

in the course of a widespread and systematic attack or attacks against the Falun Gong and Uyghurs.

 7th July, 2020 Al Jazeera;  a submission has been lodged with the International Criminal Court requesting the ICC to investigate genocide in Xinjiang. The submission has named 30 CCP officials including Xi Jinping.

China does not recognize the ICC; however, it has been established that the ICC has jurisdiction and can investigate.

Coda

20th July, 2020 Asia Times;  U.S. company Micron has production facilities in the US, Singapore, Japan, Taiwan and China. It ranks third in the dynamic random-access memory chip market.

In 2017, Micron sued Taiwanese foundry UMC and its Chinese client Fujian Jinhua Integrated Circuit for infringement of its DRAM patents, alleging unauthorized transfer of its intellectual property to Fujian Jinhua.

In 2018, the US Department of Commerce banned exports of equipment and technology to Fujian Jinhua and the Department of Justice indicted both UMC and Fujian Jinhua for industrial espionage. That crippled Fujian Jinhua’s DRAM project, which was shut down in 2019.

In June this year, a Taiwanese court ruled that two engineers who had worked for Micron before joining UMC were the source of the stolen intellectual property. 

Meanwhile, in 2018, UMC countersued in China, where a court ruled that Micron had infringed on UMC’s patents. And earlier this year, China’s first DRAM chips – made by ChangXin Memory Technologies, which was founded the same year as Fujian Jinhua – appeared in storage devices sold in China.