SPECIAL EDITION | December 2018

TRUTH AND TRADITION EXCLUSIVE REPORT

Huawei plays a key role in China’s programs of mass surveillance, human rights abuse, and technological dominance. Jasper Fakkert, Editor-in-Chief

IS CHINA’S HUAWEI WATCHING YOU?

A global media in 23 languages and 35 countries. A world leader in reporting on China. THEEPOCHTIMES.COM 2 December 2018

often poorly substantiated, From is the ongoing concern that the company may pose a security threat to foreign Stephen Gregory, Publisher Table of the Editor nations by sharing data Jasper Fakkert, Editor-in-Chief with Chinese authorities. Channaly Philipp, At Home, Travel Editor Chinese telecom company Included in this special Chrisy Trudeau, Mind & Body Editor Huawei has a controver- edition is information that Crystal Shi, Food Editor sial brand, yet details that should end this confusion, Sharon Kilarski, Arts & Culture Editor Contents explain this controversy are as we explain how Chinese rarely made clear in news laws require companies, Huawei Is Cornerstone of CCP Initiative to stories. With the recent including Huawei, to grant arrest of Meng Wanzhou, control over data to the CONTACT US Overtake the United States...... 3 chief financial officer and state and allow authorities Epoch Times Inc. The Relationship Between Huawei and the vice chairperson of Huawei, access to their systems. We 229 W. 28th St., Floor 5 Chinese Regime’s Factional Politics...... 5 Te Epoch Times is publish- also detail terms-of-service New York, NY 10001 ing this special edition to agreements for products 212-239-2808 Meng Wanzhou, Chief Financial Ofcer and shed light on the company’s from Chinese companies Advertising opaque operations. that have users abroad often Vice Chair of Huawei...... 6 [email protected] Some may wonder who unknowingly agreeing to A Brief History of Huawei...... 7 Meng is and why her ar- abide by Chinese law. Subscriptions rest is significant. In this Huawei also plays a key [email protected] Chinese User Agreements Force You to Abide edition, we explain her role in the Chinese Com- General Inquiries by Chinese Censorship...... 9 link to Huawei President munist Party’s programs of [email protected] Ren Zhengfei as well as mass surveillance, human Controlling Data: The CCP’s National Security why it matters that she has rights abuse, and techno- Letters to the Editor Law...... 10 multiple passports. We also logical dominance. Tis is [email protected] offer insight into how the fundamental to Huawei’s Role in Underhanded Deals and company operates within understanding the nature Influence Operations...... 11 the Chinese system, and of the company’s guidance how that affects the nature and operations—all of which Pentagon Technology Found Its Way to the of her role. we explain in this special Chinese Military...... 12 Among the least-known edition. Exporting Tyranny: Telecom Role in the CCP’s aspects of Huawei’s opera- tions are its leadership and One Belt, One Road...... 14 finances. Here, we provide information about the ‘F7’: Huawei’s Alleged Codename...... 14 Chinese Communist Party’s Tools Huawei Developed to Persecute Falun role in the company’s lead- ership, along with details Gong Now Repress All of China...... 19 about its financing, origins, US Technology Used for Mass Surveillance in and direction from the Chi- China, Say US Lawmakers...... 20 nese regime. Another major contro- SUBSCRIBE Suicide of Chinese Scientist Sparks versy surrounding Huawei Jasper Fakkert Controversy...... 22 that is often mentioned, yet Editor-in-Chief TODAY FRONT PAGE ILLUSTRATION: SHUTTERSTOCK & THE EPOCH TIMES Get the broaden and uplift minds. We believe that by communism, including the harm done to independent news About Us rational, balanced debate is key for fostering cultures around the world. a healthy democracy and a compassionate We are inspired in this by our own you won’t find The Epoch Times is a media organization society. experience. The Epoch Times was founded in dedicated to seeking the truth through As an independent media outlet, we 2000 to bring honest and uncensored news anywhere else. insightful and independent journalism. use our freedom to investigate issues to people oppressed by the lies and violence overlooked—or avoided—by other media in communist China. Standing outside of political interests and Subscribe and get the outlets. We seek to highlight solutions and We still believe journalism is a noble insights only The Epoch Times the pursuit of profit, our starting point and what’s good in society rather than what vocation, but only when it genuinely seeks can provide, delivered to your our goal is to create a media for the public divides us. to serve its communities and help them door every week. benefit, to be truly responsible to society. We report respectfully, compassionately, to flourish. In all that we do, we will hold We endeavor to educate readers about and rigorously. ourselves to the highest standards of today’s most important topics, seeking to We stand against the destruction wrought integrity. This is our promise to you. subscribe.epochtimes.com 212-239-2808 December 2018 3

WANG ZHAO/AFP/GETTY IMAGES GLOBAL DOMINANCE Huawei Is the Cornerstone of a CCP Initiative to Overtake the US

JOSHUA PHILIPP

he Chinese Communist Party crime, they can also be used to monitor ac- company, and three Taiwanese nationals— (CCP) is pushing a goal, under tivists and protests.” including Stephen Chen, a former president the banner of sovereignty, of Huawei plays In addition to Nairobi, the report stated, of Micron Memory Taiwan, a Micron sub- eliminating reliance on foreign “Huawei has deployed its systems across 100 sidiary in Taiwan, who went on to work at systems within China and then a key role in cities in approximately 30 countries world- the CCP’s United Microelectronics Corp. ensuring Chinese-made systems China’s goal wide. Exports of such technology are being Weeks later, in late November, CCP offi- dominate the global landscape. coupled with Chinese government-backed cials claimed they had found evidence that In the push to dominate this to surpass grants that create dependency of the im- Micron was price-fixing, along with Sam- domain, the CCP has identified porting country on Chinese-produced gear sung and Hynix, and—without providing core technologies, including satellite GPS, the United and incentivize further purchases of such public evidence—claimed the companies Tinternet infrastructure, and superconduc- equipment.” were involved in anti-competitive behavior. tors, with Huawei playing a key role in States as the A core aspect of this push is a new CCP-led Tat came on the heels of temporary U.S. this agenda. world leader internet framework that is separate from, sanctions that banned ZTE from the U.S. Te Jamestown Foundation’s China Brief yet interconnected with, the global inter- superconductor market, after ZTE was noted June 5 that Chinese leader Xi Jinping in technology, net. Included in this technology is the CCP’s found to have violated U.S. sanctions on recently has been promoting this concept massive systems for internet censorship and Iran. Tough the ban was quickly lifted, it as an approach to “technology, the internet, under its online monitoring—and again, coupled with acted as a warning shot about the effect that and governance, one that seeks to embed it is Huawei’s internet infrastructure and U.S. sanctions could have on the Chinese [China’s] concept of ‘cyber sovereignty’ ... Project 863 systems for totalitarian social control. tech industry. in the institutions of global internet gov- Huawei plays a major role in the CCP’s With Huawei now facing a similar fraud ernance.” and “Made in programs for human rights abuse and do- case related to Iran, the stakes have grown, In the past, the CCP’s concept of cy- China” 2025 mestic surveillance. A 172-page internal and the CCP’s programs to replace and sur- bersovereignty often referred to its push document from Huawei in 2015, which pass the United States as the global tech- to dominate the global internet space, programs. was leaked to the internet, was a training nology leader are front and center again, an effort dating to at least 2010, which manual for Chinese internet police to moni- with initiatives to compete in 5G internet included a play to gain control of the in- tor, analyze, and process video content. It technology, new energy, quantum comput- ternet globally through the United Na- also showed Huawei’s involvement with the ing, and others. tions in 2015. CCP’s Golden Shield Project for censorship In China, there’s a concept of “surpass- As the program has advanced, however, it and Skynet System for surveillance. ing you at the curve,” and that’s become a has broadened to include the foundational Te company’s technology is also part guiding concept for the CCP’s aim to over- technologies that make the internet and of the CCP’s Social Credit System, which take the United States as the world leader global technology systems work, while creates a database on each person, tracks in technology, under its Project 863 and maintaining the CCP’s spirit of social tyr- all available data about the individual, and China 2025 programs. Te idea is that it’s anny and global market domination. calculates a “citizen score” that determines very difficult to surpass someone already Trough the CCP’s “One Belt One Road” their level of freedom in society. ahead in a certain area, but when the whole initiative, it’s constructing core infrastruc- Te CCP is also making substantial ef- world is making a turn, that person can be ture that includes an export of the “China forts to replace the U.S. superconductor surpassed. Model” for totalitarian governance. industry—technologies for which Huawei Under the CCP, that means a focus on Te Council on Foreign Relations reported and Chinese telecom company ZTE still de- new and emerging technologies is para- in July that “China’s exporting of surveil- pend on Western companies, in developing mount. Te Party has been using foreign lance goods is a critical component of its and supplying them. investment, research partnerships, state ‘Digital Silk Road.’” Te United States indicted China’s state- financing, and theft of trade secrets to give It noted that Huawei recently implement- (Top) A Huawei owned Fujian Jinhua Integrated Circuit on its companies an edge over their often pri- ed its “Safe Cities” model in Nairobi, Kenya, display at the Beijing Nov. 1 for allegedly stealing trade secrets vately owned foreign competitors when where it installed 1,800 surveillance cam- International Consumer from U.S.-based superconductor devel- market shifts take place. eras as part of the program, and indicated Electronics Expo in oper Micron. Te indictment also included Huawei is among the key companies be- that “although the cameras can help fight Beijing on July 9, 2018. United Microelectronics Corp., a Taiwanese ing used to achieve this goal. 4 December 2018

GREG BAKER/AFP/GETTY IMAGES

With its close connections to the Chinese regime under Jiang Zemin, Huawei has played an extensive role in building and upgrading China’s internet censorship and surveillance apparatus. December 2018 5

GREG BAKER/AFP/GETTY IMAGES HUAWEI LEADERSHIP A Huawei sign outside a store in Beijing on Aug. 6, 2018. HUAWEI and the Chinese Regime’s Factional Politics

NICOLE HAO ed in the Cultural Revolution during the 1960s and 1970s, married into his wife’s he arrest of Huawei Chief Finan- family. As a result, Meng Wanzhou took cial Officer Meng Wanzhou by her mother’s surname. Canadian authorities has thrust Meng Jun’s father, Meng Dongbo, rose the world’s largest telecommuni- from his position in the PLA to become cations company into the interna- CCP secretary of a city in Sichuan Prov- tional spotlight. ince, and eventually became the prov- While officially considered a ince’s deputy governor. He also served as private enterprise, Huawei isn’t a representative in both the Sichuan pro- listed on any stock exchange, and vincial People’s Congress and the National governments around the world People’s Congress during the 1980s. consider the company an important tool Ren, who enjoyed a good relationship Tfor China’s communist authorities. U.S. with his father-in-law, was supported by prosecutors have accused Huawei of using his political connections. a Hong Kong company to skirt sanctions Huawei Chairwoman Sun Yafang, who imposed on Iran, mirroring earlier charges has been in the position since 1999, is an- against ZTE, another prominent Chinese other prominent figure in the company tech company that sold U.S.-made equip- and considered one of the most power- ment to Iran and North Korea. ful women in the world. According to Taken at face value, Huawei is an em- CIA reports, she has a background in the ployee-owned private company. Founder Ministry of State Security (MSS), China’s Ren Zhengfei officially holds 1.4 percent intelligence agency. of Huawei’s shares, while the rest are distributed to 80,000 employees via the Huawei, Spies, and Factional Struggle company’s trade-union committee. Sun’s influence within Huawei overshad- However, the committee has no other owed Ren’s. In 2010, Sun pressured Ren role, and Huawei workers automatically into giving up plans to promote his son, lose their shares when they leave the Ren Ping, as heir of Huawei. Tis suggests company. Real power is held by company that Huawei is largely controlled by Chi- managers and their Chinese Communist nese regime intelligence. Party (CCP) connections. Additionally, prior to the corruption A look at the company’s top personnel purges launched by current Chinese reveals that Huawei has close informal leader Xi Jinping, the MSS was firmly in relationships with Chinese security forces, the hands of the Jiang faction. the military, and the CCP political faction Te heads of the MSS between 1985 and associated with former Party leader Jiang 2016 were Jia Chunwang, who served until Zemin. 1998, then Xu Yongyue, who was on the job Ren has a background in the Chinese after Jia until 2007, when he was replaced People’s Liberation Army (PLA), with his by Geng Huichang. first wife, Meng Jun, being the daughter Jia has strong relations with former of a prominent PLA political officer. Teir Communist Party leader Jiang and his first daughter is Meng Wanzhou, the re- allies. Jia’s son-in-law is Liu Lefei, the cently arrested CFO and vice-chairwoman chairman of CITIC Private Equity Funds of Huawei. Management Co. Ltd. and the son of Liu Ren, whose own family was persecut- Yunshan, a retired high-ranking 6 December 2018

MATTHEW LLOYD/AFP/GETTY IMAGES JOHANNES EISELE/AFP/GETTY IMAGES

(Above) CCP official linked to Jiang. Before his re- of human rights under the CCP, most no- Huawei tirement at the beginning of this year, Liu tably the nationwide campaign against President Yunshan was one of seven members of the A look at the the spiritual practice Falun Gong in 1999. Ren Zhengfei Politburo Standing Committee that leads In order to better monitor and censor MENG WANZHOU (R) shows the Communist Party. company’s online expression, the Jiang leadership Chinese Xu is the son of Party officials and also top personnel launched the vast system of internet con- Chief financial ofcer leader Xi associated with the Jiang faction, having trols popularly known as the Great Fire- Jinping served as minister of state security at the reveals that wall of China. and vice chair of Huawei around the time when Jiang’s political influence was With its close connections to the Chinese tech firm's at its peak. Huawei regime under Jiang, Huawei has played an Recent Arrest ofces in Geng worked closely with Zhou Yong- extensive role in building and upgrading Meng was arrested by the Canadian London on kang, another former member of the Po- has close the Great Firewall. government on Dec. 1 in Vancouver, Oct. 21, litburo Standing Committee. Zhou, now relationships An important component in the early while she was traveling from Hong Kong 2015. imprisoned on charges of corruption and stages of the firewall was the Golden Shield to Mexico via Canada, on suspicion of plotting to undermine Xi’s leadership, is a with Chinese Project, which established surveillance violating U.S. sanctions against Iran. The central figure in the Jiang network. He was over internet users throughout the coun- United States accused Huawei of using (Top right) purged in 2014; the next year, he received try. A logo of security its subsidiary, the Hong Kong-based a death sentence that was commuted to Te Great Firewall and the Golden Shield Skycom Tech Co., to do business with Huawei life in prison. forces, the Project were created under the oversight next to a Iranian telecommunications companies Geng was placed under investigation in of Jiang’s eldest son, Jiang Mianheng, who between 2009 and 2014. Meng was Chinese flag 2016. Tat November, he was replaced by military, has close ties to Huawei, according to pre- in Shanghai allegedly involved in these deals. Chen Yongqing, a former vice chairman of and the CCP vious reports. on Oct. 1, the Fujian Province CCP committee. Chen In 2003, the state-run Central Central 2014. Details on Meng’s Passports is considered an ally of Xi Jinping. political Television reported that the first phase of Meng has held at least seven pass- Golden Shield Project, begun in 2001, had ports over the past 11 years, accord- Huawei’s Role in the CCP’s Censorship faction cost 6.4 billion yuan (about $770 million ing to U.S. authorities. Hong Kong’s Ming Infrastructure at the time) by the end of 2002. Further Pao newspaper reported Dec. 8 that Jiang Zemin was general secretary of the associated expenditures on the project have not been Meng had an eighth passport that she CCP from 1989 to 2003. After Jiang’s retire- with former published. used in Hong Kong in 2004 for a Hua- ment, his associates, many of whom had Given the scale, costs, and importance wei anniversary event. In court, Meng’s been promoted to high positions in the Party leader associated with the Great Firewall, it’s lawyer David Martin said that Meng has CCP and the Chinese government, car- unlikely that Jiang would have trusted two valid passports, one of which, issued ried out his influence throughout the two Jiang Zemin. Huawei to do critical work on the proj- by the Hong Kong authorities, was used terms of Chinese leader Hu Jintao. ect were he not satisfied with its political by Meng to travel in Canada. Another Individuals in this sprawling web of pa- LINTAO ZHANG/GETTY IMAGES background. passport, issued by China, was deliv- tronage are still being rooted out in a con- Tang Jingyuan, a U.S.-based commen- ered to Canada following Meng’s arrest. tinuous anti-corruption campaign, years tator on Chinese current affairs, told Te For Meng, the first letter of each of her after Xi Jinping came to power in 2013. Epoch Times on Dec. 10 that Huawei chair- four Chinese passport numbers was Wang Youqun, who served as a CCP dis- woman Sun was likely appointed to her G, and the first letter of the three Hong ciplinary official between 1993 and 2002, position at the behest of the Jiang faction, Kong numbers was K. She allegedly used told Te Epoch Times that according to a which made the company politically reli- another Chinese passport, with a number former Huawei employee familiar to him, able. starting with P, to register for an event. Huawei was a company used for intelli- “Tey [figures in the Jiang faction] have gence, and that it served “the previous treated Huawei as their own business since The Significance of Multiple Passports dynasty,” that is, the leadership of Jiang. then,” Tang said. “It’s easy to understand In mainland China, there are four types Aside from nepotism and corruption, why Jiang Mianheng gave its orders to of passports, with numbers beginning Jiang is notorious for starting new abuses Jiang Zemin. Huawei.” with letters G or E, P, S, and D. Pass- December 2018 7 A Brief History of Huawei The History of what technology could be The company turned central and western Evidence of In September 2009, exported into China. to importing key regions. state-run media Xinhua Huawei’s Ties components, then State Funding reported that CDB to the Chinese Despite that, Ren manufacturing Huawei grew its domestic Sina, a Chinese news signed a new round of Communist Zhengfei, a former complementary parts market rapidly in the portal, reported in the strategic cooperation Party military ofcer, founded and assembling them in 1990s. January 2005 that agreement with Huawei, Huawei in 1987 with a China. the state-owned China loaning it $30 billion. During the 1980s, China meager 21,000 yuan Huawei began expanding Development Bank (CDB) had severe import and (about $5,000 at the Huawei was China’s into international loaned Huawei $10 billion export restrictions— time) and was able sole communications markets, after China in December 2004. especially after the 1989 to import sensitive equipment supplier. It joined the World Trade Huawei was the only Tiananmen Square equipment. Sanctions received contracts to Organization in 2001 and private firm that could massacre precipitated forbade Huawei from set up communications many countries opened receive loans from CDB at sanctions. Countries also importing complete networks for local their markets. the time. had strict regulations over sets of equipment. governments in China’s

REUTERS/ALEXANDER BIBIK ports labelled with “S” are service pass- family was persecuted during the Cul- ports. “D” indicates diplomatic sta- tural Revolution. tus. “G” and “E” passports are for the general public, with “E” denoting the Because of the political prominence of upgraded biometric passport that has the Meng family, Ren moved in to live been in use since May 2012. The P with the Meng family following his mar- passport, which Meng reportedly pos- riage. As a result, their first child, Meng sesses, is for public afairs. It is granted Wanzhou, born in 1972, took on her to government clerks and employees of mother’s last name. state-owned enterprises. P passports are within the family of S service pass- Court Details ports. Meng, 46, faces a maximum sen- tence of 30 years for each charge in Before reforms made in 2007, all the United States. Meng was initially China-issued passports were valid for granted a publication ban by the Brit- five years. In 2007, the validity period ish Columbia Supreme Court, which of S, D, and P passports was shortened would have restricted the media’s ability to four years, while G and E passports to report on what happens in court. The had their expiry dates extended to 10 ban was lifted on the morning of Dec. 7, years from date of issue. just before the court hearing.

The fact that Meng has had four Chi- Stateside, the U.S. District Attorney’s nese passports issued to her in the Meng Wanzhou, CFO of Chinese technology giant Huawei, at a VTB Capital Ofce in the Southern District of New past 11 years, despite the valid- Investment Forum in Moscow on Oct. 2, 2014. York confirmed that Meng’s case is ity period being four years, has raised being handled by their colleagues in the questions. Also intriguing is the fact travel between China and Hong Kong. Notably, Meng and Ren do not share Eastern District ofce. John Marzulli, that she possesses Hong Kong pass- Besides her Chinese and Hong Kong the same last name. That is due to spokesperson for the Eastern District ports, while by law Chinese are not citizenships, Meng once received per- the prominent social status of Meng’s ofce, declined to comment on the case. allowed to hold dual citizenship and manent residency in Canada, which mother and Ren’s ex-wife, Meng Jun. must revoke their Chinese passport if expired in 2009. Broader Implications they gain a Hong Kong passport. Hong Chinese culture traditionally follows Many have speculated about whether Kong and neighboring Macau are for- Meng Family Connections a patrilineal family system, whereby the arrest would have implications for mer British and Portuguese colo- Meng, 46, is the oldest child of Huawei women marry into their husbands’ fami- the ongoing trade dispute between nies administered as part of China but founder Ren Zhengfei and was widely lies. Some men, however, will marry into China and the United States. In fact, allowed some functions of self-rule, believed to be next in line to assume their wives’ families due to the higher both the U.S. administration and Chi- including separate citizenship. leadership over the military-linked economic or social status of the latter. nese authorities have made state- company. She dropped out of high ments saying that they were committed Given how things are normally done in school and took up a job at a bank in Meng Jun’s father was Meng Dongbo, to negotiations and sorting out a deal China, Meng would have had to give up China’s southern metropolis of Shen- deputy secretary of a political commit- within the 90-day period agreed upon either her Chinese or Hong Kong pass- zhen. She joined Huawei in 1993 and tee with the East China Field Army— between U.S. President Donald Trump port when applying for travel doc- was named CFO in 2011. But her ties a CCP army unit during China’s civil and Chinese leader Xi Jinping on the uments that would allow her to go to Ren were not publicly revealed until war. Meng Dongbo later enjoyed a long sidelines of the G-20 meeting in Bue- between the mainland, Hong Kong, 2013—which drew speculation that political career in Sichuan Province. nos Aires. and Macau. This has raised questions she would succeed her father to take Ren, on the other hand, came from a about which document Meng used to the helm of the company. poor area of Guizhou Province, and his Annie Wu contributed to this report. 8 December 2018

ED JONES/AFP/GETTY IMAGES

Xiaomi’s user agreement says that you must follow the Chinese regime’s rules on the suppression of religion, and that you can no longer undermine its ‘national religious policy.’

A man checks surveillance cameras on Tiananamen Square in Beijing on Oct. 31, 2013. December 2018 9

SURVEILLANCE STATE

laws for exporting Chinese “national se- curity” abroad. Chinese User Agreements German satirist Christoph Rehage was among the first foreign targets of these policies. In December 2015, he uploaded a YouTube video that called the founder of Force You to Abide by the Chinese Communist Party (CCP), Mao Zedong, “China’s Hitler.” A Communist Youth League website called for Rehage to be punished for violating Chinese law, even though he lives in Hamburg. Tey Chinese Censorship argued that Rehage, who speaks Chinese, made the video to circulate in China, which they said undermined the sover- JOSHUA PHILIPP news and politics, the agreement forbids eignty of the country’s internet. you from “spreading rumors.” When dis- Earlier in 2015, a Hong Kong-based edi- If you’re looking to pick up a phone or Any company cussing news, that usually means you’re tor who wrote gossip books about Chinese laptop made by a Chinese company, be not allowed to say things that don’t align leaders disappeared along with four of sure to read the fine print in the terms of that wants to with the state-approved lines of the Chi- his colleagues. service. You may be putting yourself at do business nese regime’s official mouthpiece news Tis could tie to a shift in Chinese policy the mercy of Chinese law. outlets. that began on July 1, 2015, when the Na- Te policies may give a glimpse of what’s in China must You’ve also given Xiaomi the “right to tional People’s Congress Standing Com- to come, as the Chinese regime has passed access” your account. mittee passed the National Security Law. new laws requiring it to enforce its brand uphold these Xiaomi isn’t alone in these require- Te law emphasizes that “China must of “national security” abroad. ments, either. Chinese tech firms includ- defend its national security interests ev- If you’re using a Xiaomi smartphone, rules. ing Huawei and Decathlon have similar erywhere,” and, according to Te Diplo- for example, it’s likely you’ve unwittingly user agreements. mat, “[affects] almost every domain of agreed “to bear all the risks and take full Tere are a few differences in each. public life in China—the law’s mandate legal liability” to not engage in activities With Decathlon, for example, you’re not covers politics, the military, finance, re- the Chinese regime has banned. allowed to spread anything that could ligion, cyberspace, and even ideology and According to the fine print, you’ve actu- “damage the reputation of government religion.” ally limited yourself quite a bit. organizations.” Alongside the National Security Law First and foremost, it bans you from op- Te text in the agreements has actually was another passed on Dec. 27, 2015, posing the principles of the Constitution (Below) People take been there for some time. According to called the Counterterrorism Law. of the People’s Republic of China. You’re photos in Tiananmen archives of the Xiaomi website, the parts Te Counterterrorism Law was particu- also not allowed to leak state secrets or Square in Beijing on Oct. banning discussion on “cults” and “su- larly contentious since it requires foreign subvert the government. 24, 2017. Many major perstition” and the requirements to abide tech firms to cooperate with the Chinese If you believe in a free Tibet, an indepen- Chinese products have by the Chinese regime’s constitution were regime’s investigations—and its brand of dent Taiwan, or a democratic Hong Kong, terms-of-service agree- added in October 2014. “counterterrorism” is far different from you’re violating Xiaomi’s user agreement, ments that make users What’s concerning, however, is what that in the West. since it forbids you from abide by Chinese laws these existing standards mean for new As Te Diplomat noted, the CCP has “undermining national on censorship and reli- binding laws on foreign technology com- its own definition of terrorism, which unity.” gious discrimination. panies that do business in China, and new includes “any thought, speech, or activ- Also be careful if ity that, by means of violence, sabotage, you’re spiritual or be- GREG BAKER/AFP/GETTY IMAGES or threat, aims to generate social panic, lieve in a religion. influence national policy-making, cre- Te agreement says ate ethnic hatred, subvert state power, you have to follow the or split the state.” Chinese regime’s rules In other words, at one extreme it does on the suppression of include terrorism—but at the other ex- religion, and you can treme it also makes “thought” and no longer undermine “speech” illegal, if those thoughts or its “national religious words challenge the CCP’s rule. policy.” Any company that wants to do business If you write about in China will need to uphold these rules. Tibetan Buddhism or Te Chinese regime’s policy is still being House Christians, you developed, but if the user agreements of may violate its rules on Chinese companies tell us anything, it’s what the Chinese re- possible we may all soon be required to gime calls “cults.” You follow its standards on totalitarian rule also can’t write about or, as Xiaomi’s warning states, “bear all any beliefs it calls “su- the risks and take full legal liability.” perstitions.” NEWSANALYSIS When it comes to Eyal Levinter contributed to this report. 10 December 2018

Controlling Manipulation of international law is Data: The a cornerstone of the CCP’s unconventional CCP’s warfare strategy. National Security Law JOSHUA PHILIPP

Under the Chinese regime, all network infrastructure Under it, foreign laws and and information systems regulations are studied, and are required by law to be “se- methods of exploiting loopholes to cure and controllable.” Tis re- benefit the CCP’s interests, while harm-

quirement on data monitoring is LUTSENKO_OLEKSANDR/SHUTTERSTOCK ing the interests of its competitors, are re- enforced under the National Security garded as a form of warfare. Law, which was passed in 2015 by the When the CCP implemented its National National People’s Congress, China’s faux Security Law, the implications of the re- legislature. gime’s legal warfare focus was raised by Among the key concerns around Huawei Robert Atkinson, president of the Informa- and similar Chinese technology companies tion Technology and Innovation Founda- is whether they share data with Chinese tion, a Washington-based think tank. He authorities or the Chinese military; under explained in an interview at the time that the National Security Law, this argument is “the goal is to completely replace foreign moot. All companies operating in China are information technology with Chinese in- required to abide by the law, and the Chinese formation technology.” regime has created a law that requires com- The goal is to “Te Chinese government has spent an panies to grant it control of data. completely enormous amount of time understanding Te U.S.–China Economic and Security the actual rules and laws of the WTO, so Review Commission noted the replace for- anything they do doesn’t run afoul of the implications of the National Se- WTO,” Atkinson said. curity Law in a 2015 report. eign infor- “Te Chinese essentially want a closed It states that the new rule loop where Chinese companies are mak- “would require any com- mation tech- ing these things for China,” Atkinson said, pany operating in China “and the security provisions in the National to turn over to the govern- nology with Security Law are one of many, many tools Visitors use their cellphones at the ment its computer code and Chinese infor- the Chinese government is implementing Huawei stand at the Mobile World encryption keys, as well as to to achieve this goal.” Congress in Barcelona, Spain, provide a backdoor entry into its mation tech- As he noted, the National Security Law on Feb. 28, 2017. commercial computer networks.” expanded on an earlier program of the CCP, Also part of the National Secu- nology. the National Medium- to Long-Term Plan for The United rity Law is a less discussed compo- the Development of Science and Technology, States has nent that allows the CCP to selec- Robert Atkinson, which was passed in 2006. Te program been pay- tively ban foreign imports while president, Information requires that for companies to sell in China, ing close favoring its own companies. Tis Technology and they must first transfer their technology to attention works by manipulating a loophole Innovation Foundation Chinese companies. Researchers to Chinese in World Trade Organization regu- In addition, under new “internet safety” technology lations on protectionism, and was rules announced by China’s police force in found that companies. viewed at its onset as something October, any official within China’s security that could allow the CCP to boot apparatus can now enter a company’s prem- Huawei paid for U.S. companies from China. ises, computer mainframe rooms, and any Under WTO rules on free trade, coun- other workspace, for the purpose of carrying 12 Australian tries aren’t allowed to discriminate out an inspection. federal politicians against imports. Tere’s an exception to Upon entering, security officials can this, however; countries can ban certain demand that supervisors or internet ad- to travel to imports if they are deemed a national- ministrators submit to questioning. Te security threat. officials also can look up and make copies Huawei’s Manipulation of international law is a of any information relevant to the inspec- cornerstone of the CCP’s unconventional tion. Security officials are now empowered headquarters in warfare strategy, as described under its to dispense administrative punishment or Shenzhen between Tree Warfares concept of psychological penal action for any behavior or action by warfare, media warfare, and legal warfare. companies that they deem to be illegal. 2010 and 2018. December 2018 11

LLUIS GENE/AFP/GETTY IMAGES ment, and a register for individuals acting on behalf of foreign principals.

Long-Standing Concerns Te reports of Australian politicians traveling on Huawei’s dime followed on concerns that had long been brew- ing. News about CCP front operations in Australia had begun making headlines in 2017, when local media reports exposed the CCP’s influence over the country’s news outlets, universities, businesses, and politicians. Te Weekend Australian reported on June 10 that Australian tax dollars are helping fund the CCP’s weapons programs, through cooperation between Australian universities and Chinese military-linked, state-owned enterprises. “Te Australian Research Council is funneling Australian taxpayer funds into research with applications to China’s ad- vanced weapons capacity through its link- age program,” it states. Te Australian Research Council also gave $466,000 to a joint-research program JOSHUA PHILIPP between the University of New South Wales, the Australian subsidiary of mul- ubversion operations of the tinational company National Instruments, Chinese Communist Party and Chinese telecom company Huawei. (CCP) include bribery, politi- Te report notes that “Australia’s intel- cal influence, extortion, and ligence agencies believe Huawei is linked programs for subtle influence. to the Tird Department of the PLA, the Tese operations are often car- military’s cyberespionage arm, which ried out by Chinese agents, but led [the Australian] government to place Huawei has been accused on a ban on the use of Huawei equipment in several occasions of engaging Australia’s National Broadband Network.” in similar actions. Cases concerning Huawei’s Corruption alleged influence operations made head- In December 2017, a top executive of Hua- lines in Australia, where the telecom wei, Teng Hongfei, vice president of the Scompany has allegedly been sponsoring Huawei Consumer Business Group in the politicians to travel to China, running Greater China region, was investigated for CORRUPTION influence operations, and receiving tax- bribery. In his early career, Teng worked payer funds to participate in military at Nokia as a regional CEO. In 2012, he research programs. moved to Samsung, before settling at Huawei is the largest corporate spon- Huawei in 2014. sor of overseas travel for Australian poli- A similar case had taken place in 2014. ticians, according to a Reuters report in Te Chinese business publication Caixin Huawei’s Role in June. It cited a report on travel disclosure reported that 116 employees had accepted registers from the Australian Strategic or solicited bribes, mainly by demanding Policy Institute, a think tank. kickbacks from 69 retailers. One regional Te researchers found that Huawei paid director received bribes of up to 2 million for 12 Australian federal politicians to trav- yuan (around $320,000 at the time). Hua- el to Huawei’s headquarters in Shenzhen wei denied the allegations. Underhanded Deals between 2010 and 2018. Expenses included An insider cited in Telworld, a Chinese business-class flights, local travel, acco- publication covering the domestic tech modations, and meals. Politicians included industry, said different departments at Australia’s Foreign Minister Julie Bishop, Huawei have allowed corruption to fester, Trade Minister Steve Ciobo, and former including in the research and development, and Influence Trade Minister Andrew Robb. procurement, and sales departments. Te trips were just part of local concerns In 2012, a group of Chinese tech execu- in Australia, however, and on June 28, its tives, including one from Huawei, were senate passed two laws that overhaul its convicted of bribery in an Algerian court. previous laws on security and foreign in- International arrest warrants were issued Operations terference. According to Te Guardian, after the court found that they had bribed these included a new criminal offence for an executive at the state-owned Algérie theft of trade secrets for a foreign govern- Télécom to give their companies an edge. 12 December 2018

MILITARY USE Pentagon Technology Found Its Way to the Chinese Military Sumitomo Electric Lightwave’s fiber- optic technology now helps power A Chinese J-10 fighter jet the Chinese regime’s performs at an airshow in Changchun, Jilin Province, weaponry on Sept. 12, 2015. The jet includes technology stolen from the United States. JOSHUA PHILIPP

he Chinese regime’s fifth-gen- FREDERIC J. BROWN/AFP/GETTY IMAGES eration fighters, state-of-the- art naval cruisers, and soon-to- be-launched aircraft carriers are more deadly than they oth- erwise would be because they are equipped with advanced fiber-optic cable originally built for the Pentagon, according to a U.S. military intelligence officer. Te saga of this cable is part of a bigger story of how American military technology ends up with the Chinese re- Tgime’s military, an issue the Trump ad- ministration is seeking to address with sanctions and new legislation. Fiber-optic technology transfers large amounts of information at very high speeds. It is a “dual use” technology, one used in both civilian and military sectors. For public use, fiber optics carry telecom A Chinese pilot stands by the Pentagon to a Japanese-owned com- technology to Chinese telecom companies data, such as internet communications. For as foreign military attachés pany based in North Carolina, known as ZTE and Huawei. the military, fiber optics are used in ships, inspect one of the Chinese Sumitomo Electric Lightwave, to develop a ZTE and Huawei have been no strangers jets, and other systems to transmit high vol- regime’s J-10 fighter jets next-generation fiber-optic cable. After the to controversy. ZTE was sanctioned, and umes of data. In a battle, the speed of these at the Yangcun air force company developed the technology for the Huawei is under investigation for selling systems can mean the difference between base in Tianjin, China, on U.S. military, however, it began selling the forbidden technologies to Iran. Both com- victory and defeat. April 13, 2010. fiber optics to private companies. Trough panies also have connections to the Chinese A development contract was awarded by its offices in Beijing, Sumitomo sold this Communist Party’s military, the People’s December 2018 13

STR/AFP/GETTY IMAGES officer noted that between nations, “it’s a Te officer made clear that Sumitomo’s constant race” to keep up with the develop- previous dealings with ZTE and Huawei do A U.S. military ment of systems such as fifth-generation not appear to have been illegal. Yet, he said, fighter jets and shipboard weapons that the problem of dual-use technologies finding intelligence process massive amounts of data. “If you, their way into hostile hands is becoming ofcer as an adversary, have access to that technol- one the United States can no longer ignore. ogy, you see generations of development.” “Te suppliers, there is nothing nefari- speaking “Te core issue of fiber optics is the ability ous about them—they are not trying to do to transmit data rapidly. Each new genera- something bad,” he said. Among the prob- anonymously tion speeds it up. Te faster you can trans- lems is that after technologies are sold in a mit, the better it is,” he said, and added that country like China, “technology suppliers said that not there is “light-years’ [worth]” of difference don’t know how it will be used,” since there between fiber optics technology today and is no requirement for companies to know long after that of 30 years ago. their end users. Sumitomo According to Richard Fisher, a senior He noted several additional cases. One fellow with the International Assessment involved a company selling technology to sold this U.S.- and Strategy Center, advanced fiber-optic Iran for high-value specialty metal alloys. cables such as those developed by Sumi- Although the initial use of the technology funded fiber tomo, “would be very attractive to the PLA.” was benign, he said, “Te exact same stuff To grasp the significance of fiber optics to can be used to build similar components optics to ZTE military technology, Fisher noted that it’s for nuclear weapons—these were dual-use.” and Huawei, important to understand a bit of history. Another case was a Shanghai steel com- In the 1970s, fighter jets moved to “fly by pany that was obtaining metal technologies the PLA got its wire” technology, in which pilots controlled from Western companies. Te technologies the planes by electric rather than hydraulic were then used for PLA weapons programs. hands on it. signals. Fisher said that for the fighter jets, “Te issue here is, there is no restraint to this allowed for a “radical increase in ma- using technology in questionable environ- neuverability.” ments,” he said. Te next development was with the in- “One of the biggest culprits in this whole troduction of fiber optics, referred to as “fly scheme is President [Bill] Clinton, because by light” technology. He said, “Compared he freely allowed China access to advanced to ‘fly by wire,’ fiber-optic cable allows for military technology, like the W88 nuclear much more rapid and far greater transmis- warhead. Tere were no restrictions. sions of data.” “Te [CCP] gained 25 years of develop- “Modern fighter radar and electronic ment by getting U.S. technology for free.” warfare systems are dealing with data loads Regarding the case of a Pentagon-fi- that are orders of magnitude greater than nanced program ending up in the PLA’s radar and electronic systems of the 1980s,” hands, the officer said that the Beijing office Fisher said. “Te ability to move data faster of Sumitomo “should have at least made could mean the difference in who calculates the attempt to see who the true end user a fire solution first and shoots down the is ... Japanese companies, U.S. companies, Liberation Army (PLA). other guy.” whatever, know that a transfer technology A U.S. military intelligence officer speak- Te officer said the same applies to missile could be used for all kinds of things.” ing anonymously said that not long after systems. “Te quality of rapid communica- He said it’s a common problem in China Sumitomo sold this U.S.-funded fiber optics tions and high-speed data transmission is that a foreign company working there does to ZTE and Huawei, the PLA got its hands critical for effective missiles, and anti-ship so with the knowledge that the Chinese on it. missiles, and whatever missiles you can Communist Party will obtain their technol- Te officer said he had seen intelligence think of.” ogy. “Te moment you insert technology that confirmed PLA military equipment is into China, it’s lost,” he said. using the same fiber optics commissioned Technology Transfers Fisher shared a similar perspective, by the Pentagon. According to an intelligence memo obtained saying, “Te Chinese military-industrial “It wasn’t stolen. It was for civilian, or non- by Te Epoch Times, the Sumitomo tech- complex is constantly scouring the earth military, purposes,” he said. “In China, it is nologies may have also been transferred to for top-of-the-line technologies that can being used for naval and for aircraft, like the Iran. It states, “In Iran, the products ended be applied to military systems China is J-10 jet, the high-end destroyers, cruisers, as up sometime between May 2009 and De- developing. well as for these evolving carriers. cember 2009 with Isfahan Optics Industries, “Huawei and ZTE are cat’s paws for Chi- “Sumitomo Electric Lightwave has been part of state-owned defense operation.” nese Communist Party domination, and the leading edge of developing highly ad- It says these technologies are believed to we should treat them as such in every con- vanced fiber optics for shipboard use, as be “a substantial quantity of FTTx Service ceivable way. well as for fighter jets and drones. Drop cable and about 30 (or many more) of “Te reality of China’s pervasive civil- “Some of the technology has inadvertent- the Type 39 Alignment Splicer.” Te memo military integration policies means that ly come into control of ZTE and Huawei.” notes there is “limited information” on the anything we sell to China will be evalu- exact quantities that were transferred. ated for military exploitation. ... Anything A Quiet Arms Race It says the products made their way to Iran we sell China ... should be evaluated on When it comes to advances in military first through Malaysia, then through Dubai. whether that technology could end up kill- equipment, underlying technologies such It includes unconfirmed analysis on four ing our troops.” as fiber optics also need to keep pace to additional companies believed to have been ZTE and Huawei did not respond to re- make the weapons systems effective. Te involved with the transfers to Iran. quests for comment sent by email. 14 December 2018

EXPORTING TYRANNY Telecom Role in the CCP’s One Belt, One Road

EMEL AKAN & FRANK FANG ment, adding that Chinese telecom com- panies represent a “fundamental risk” to he CCP has built a vast, high- U.S. national security. technology system to surveil the Huawei and In the letter, the senators referred to a Chinese people, and it is export- ZTE are two recent Reuters report stating that the Chi- ing this system as part of its One nese telecom firm assisted the Venezuelan Belt, One Road initiative. Two sides of the government in establishing control over of the primary players in this its citizens. According to the Reuters re- push are the companies ZTE and same coin. port, ZTE helped the Maduro regime to Huawei. Sen. Chris Van Hollen build a database that enables the moni- Recently, Sens. Marco Rubio toring and tracking of Venezuelan citi- (D-Md.) (R-Fla.) and Chris Van Hollen zens and, since 2016, to centralize video (D-Md.) warned the Trump ad- surveillance. ministration that ZTE was helping China “We are concerned that ZTE, by build- export surveillance tactics to the Nicolás ing this database for the Venezuelan gov- TMaduro regime. Te Chinese telecommu- ernment, may have violated U.S. export nications giant, which has been penalized controls and sanctions laws, as well as for violating trade sanctions on Iran and the terms of the Commerce Department’s North Korea, may acquire additional U.S. June 2018 superseding settlement agree- sanctions as the company’s business with ment with ZTE,” the senators said in the the Venezuelan government faces new letter. scrutiny. ZTE has a history of breaching U.S. Rubio and Van Hollen sent a letter to the government sanctions. In April, the U.S. secretaries of state, the treasury, and Commerce Department found ZTE had commerce, urging an investigation into violated a settlement reached in 2017, company’s activities. and blocked the company from buying “Huawei and ZTE are two sides of the crucial components and software from same coin,” Van Hollen said in a state- American technology companies.

RICH LAM/GETTY IMAGES According to Canadian prosecutors, Meng had committed fraud in relation to violating Iran sanctions. She had misrepresented the Huawei’s relationship between Huawei and Skycom, a Hong Kong-based company that report- edly sold U.S.-manufactured computer Alleged equipment to Iran. Huawei, in fact, controls Skycom, the prosecutors allege. Huawei’s Iran dealings were hinted at in 2016, when the U.S. Commerce Department Codename published internal documents from Huawei competitor ZTE. Te company, also a major ‘F7’ANNIE WU & CATHY HE telecoms firm in China, was punished by U.S. authorities for violating sanctions to At a court hearing on Dec. 7, details emerged A crowd waits in line to enter the courtroom to watch the bail hearing for provide electronic equipment to Iran. about the alleged crimes of Huawei Chief Huawei CFO Meng Wanzhou in Vancouver, Canada, on Dec. 10, 2018. Financial Officer Meng Wanzhou, who was Competitor Codenamed ‘F7’ arrested in Canada days earlier at the re- Te internal ZTE document, dated Au- quest of U.S. authorities. gust 2011, cited a rival company code- December 2018 15

YURI CORTEZ/AFP/GETTY IMAGES Venezuelan riot policemen shoot tear gas at students in Caracas on Nov. 21, 2018. Chinese technology com- panies are helping China’s communist party to export sur- veillance tactics to the Maduro regime.

named “F7” as an example of how to skirt in embargoed countries and this affected major Chinese companies use codes in- U.S. export controls. its project acquisitions in the U.S.,” it stead of directly mentioning one another. Such guidance was needed because at The read. In particular, “F7’s proposal to ac- “F7” was code for Huawei because the time, ZTE had projects in five em- quire U.S. 3leaf Company was opposed when said in Mandarin Chinese, “F7” bargoed countries: Iran, Sudan, North document’s by the U.S. government, citing the im- sounds like “fu qi,” meaning “husband Korea, Syria, and Cuba, according to the description pact to U.S. national security.” and wife.” Te first letters of the phrase document. It said that F7 hired attor- In 2011, it was widely reported that correspond to Huawei’s abbreviation, neys specializing in U.S. export-control of F7 squarely Huawei had sought to acquire U.S. serv- HW. laws for its main company as well as its er-technology company, 3Leaf. Huawei In Huawei’s internal documents, its subsidiaries. It recommended similar matches that dropped the bid after the U.S. govern- chief competitor ZTE is referred to by methods for ZTE. ment concerns. executives as 26. F7 also hired a “big IT company” to of Huawei. And so, the document’s description of Te numbers “er liu,” when spoken in serve as a front to sign contracts for proj- F7 squarely matches that of Huawei. Mandarin Chinese, sound like the Chi- ects in embargoed countries. nese phrase for “second-rate”—a way of Te document goes on to warn that F7’s Codenames Common signaling contempt for a competitor. actions had caught the attention of U.S. In fact, bloggers in China had already Furthermore, the 26th letter of the al- lawmakers. published the meaning of the F7 code phabet is Z, referring to ZTE. “In 2010, U.S. Representatives reported back in 2014. Huawei considers itself a first-class to Congress about F7’s on-going projects At high-level internal meetings, many company compared to ZTE. 16 December 2018

MIQUEL BENITEZ/GETTY IMAGES ZTE is highly dependent on U.S. suppliers surveillance system, in which millions like Qualcomm, Google, and Corning to of cameras currently monitor citizens manufacture its cellphones and telecom throughout the country and have been equipment. used to snuff out dissidents. Panama’s Te ban nearly brought the company to system would also be wired to the gov- the brink of bankruptcy, prompting a rare ernment offices of defense, migration, intervention by Chinese leader Xi Jinping. fire department, and ambulance service. In June, ZTE reached a settlement with Beijing has deployed advanced surveil- U.S. authorities, agreeing to pay a total lance technology especially in the region of $1.4 billion in fines and to overhaul of Xinjiang as part of its efforts to monitor its board of directors and senior man- and persecute Uyghur Muslims and other agement ranks. In exchange, the United ethnic minorities. Te Chinese regime is States lifted the ban. now exporting its surveillance technolo- “Te Venezuelan government hired ZTE gies to other countries. to build a database and develop a mobile Many governments around the world, payment system for a smart ID card,” the including in the United States and Austra- lawmakers wrote. lia, have raised concerns about equipment Te project was inspired by China’s na- and phones made by Huawei and ZTE. tional identity card program that tracks Te Pentagon issued an order in May to the social, political, and economic behav- remove all phones from these two compa- ior of its citizens. Te program enables the The ZTE stand On Dec. 1, as part of a U.S. probe, Can- nies sold at stores on U.S. military bases, government to monitor everything from during the Mobile ada arrested Meng Wanzhou, the chief out of concern that those devices could a person’s personal finances to medical World Congress in financial officer of Huawei, another Chi- be used to spy on U.S. forces. history and voting activity. Barcelona, Spain, on nese telecom company. China and Panama signed multiple Te system in Venezuela was built us- Feb. 27, 2018. Te United States was pursuing Meng, cooperation deals after Chinese leader ing components from Dell Technologies the daughter of Huawei’s founder, in a Xi Jinping’s recent visit to the Central in the United States, which alarmed the criminal probe related to the violation American country. However, experts are senators. of sanctions against Iran. voicing concerns that the closer relation- “ZTE installed data storage units built “While the Commerce Department ship between the two countries could be by Dell Technologies,” the letter stated. focused its attention on ZTE, this news damaging to Panama’s interests, as well “Tough Dell’s transaction appears to highlights that Huawei is also violating as those of the United States. have been with ZTE in China, we are U.S. law,” Van Hollen said in the state- Xi arrived in Panama on Dec. 2 for a concerned that ZTE may have violated ment. “We need a comprehensive plan 24-hour visit, during which he met with U.S. export controls by misidentifying to hold the Chinese and their state- Panamanian President Juan Carlos Va- the end-user or purpose of the end use.” sponsored entities accountable for gross rela. Te two leaders signed 19 coopera- ZTE is China’s second-largest telecom violations of the law and threats to our tion agreements for trade, infrastruc- equipment maker. Te company is pub- Beijing is now security.” ture, banking, education, and tourism, licly traded, but its largest shareholder is according to Reuters. One of the agree- still a Chinese state-controlled enterprise. exporting its A Push Into Panama ments calls for China to provide non-re- China’s top telecom firms are also mak- imbursable aid to Panama for carrying Violations surveillance ing inroads in Panama. R. Evan Ellis, a out the different projects; the amount A spokesperson for the Commerce De- technologies professor of Latin American studies at the wasn’t disclosed. partment confirmed that it had received U.S. Army War College Strategic Stud- Additionally, Varela expressed support the senators’ letter. to other ies Institute, predicts that Huawei and for Panama’s continued participation in “Te Department of Commerce will ZTE will be the dominant providers of projects under Beijing’s “One Belt, One remain vigilant against any threat to countries. telecom infrastructure and services in Road” (OBOR, also known as Belt and U.S. national security and continues Latin America and the Caribbean, with Road) initiative, according to China’s to diligently implement the settlement a “near-monopoly status” eclipsing local state-run media Global Times. Beijing agreement with ZTE. We have no further providers by 2050. first announced OBOR, a bid to build comment at this time,” stated the spokes- Such dominance, according to Ellis, up geopolitical influence through trade person in an email. would give China “virtually limitless ca- networks, in 2013. Te initiative includes As part of the settlement deal in June, pability to collect business intelligence or billions of dollars’ worth of investments ZTE has allowed the U.S. Commerce appropriate technologies to give an un- in countries throughout Asia, Europe, Department to monitor the company’s fair position to PRC-based companies,” he Africa, and Latin America. behavior. said for a report published by U.S. think Both Rubio and Van Hollen have been tank Center for Strategic and Interna- Corruption Concerns vocal about ZTE’s potential violations and tional Studies on Nov. 21. Panamanian economist Eddie Tapiero about retaining sanctions on the firm. Te two firms’ dominance could also raised concerns about the relationship “We have not received a response to our compromise “virtually any military, gov- with China, while speaking at a news letter at this point,” stated a spokesperson ernment, or business leader in the region, program run by Panamanian broadcaster for Van Hollen. to obtain from them valuable political and TVN. Van Hollen co-sponsored a bill in- military intelligence,” he said. “It calls us to be more demanding in troduced in September called the ZTE Huawei was even recently awarded a areas of transparency, corruption, and Enforcement Review and Oversight contract for installing a street-level sur- the law. If that doesn’t happen, the ini- (ZERO) Act. Te legislation requires the veillance system with facial recognition tiative [with Chinese investment] would Commerce Department to put ZTE out of cameras linked to a data network based not work out” because the money would business if it violates the current agree- in the city of Colón—allowing the Pana- be squandered, Tapiero said, and efforts ment with the United States. ma government to mimic China’s mass “to boost Panama would not happen.” December 2018 17

LUIS ACOSTA/AFP/GETTY IMAGES While Tapiero didn’t elaborate on how and the Caribbean, warning of the chal- corruption might take place, China’s lenges posed by China’s investment in OBOR has been known to foster corrup- the region. Te report concludes that Chi- tion in countries with weak institutions, While the nese investment would reduce the United while benefiting the Chinese regime and States’ strategic influence in the region, harming local interests. One example Commerce diminish U.S. regional security relation- involves Malaysia, whose newly elected Department ships, and undermine U.S. promotion of Prime Minister Mahathir Mohamad can- international norms such as democracy celed some $23 billion worth of OBOR focused its and fair labor practices. infrastructure projects in August after China is currently constructing port his predecessor was charged with corrup- attention on facilities at both ends of the Panama Ca- tion and money laundering in relation to ZTE, this news nal: Port Balboa and the Amado Cruise funding for the projects. Terminal near the entrance connecting Similar transparency concerns were highlights to the Pacific Ocean; and Panama Colón voiced by Miguel Antonio Bernal, a law Container Port at the Atlantic Ocean en- professor and a candidate running in that Huawei is trance. Panama’s 2019 presidential election, who Te USCC report includes comments by also violating Chinese leader Xi Jinping (L) and Panama’s President said, “[China has] a colonization plan and Navy Adm. Kurt W. Tidd, commander of Juan Carlos Varela in Panama City on Dec. 2, 2018. we don’t have the professional capacity U.S. law. the U.S. Southern Command, who stated to resist it. We are like an ant wanting to that “increased reach to key global access be friends with an elephant,” according Sen. Chris Van Hollen points like Panama create[s] commercial to a Dec. 2 article by U.S.-based Spanish- and security vulnerabilities for the United language cable news channel Univision. States.” Te USCC report questions the econom- China Investments ic feasibility of some of the Chinese proj- Chinese companies have invested heavily ects, including the $167 million Amado in Panama in recent years. For example, Cruise Terminal, which is “not along any in May 2017, China’s Landbridge Group, major cruise ship routes.” under the OBOR initiative, was awarded the contract to expand Panama’s largest port, the Colón Container Port, for about $1 billion. Te firm began construction in June 2017, according to China’s state- GREG BAKER/AFP/GETTY IMAGES run media. In July 2018, China’s state-run China Communication Construction and its subsidiary China Harbor Engineering won the bid to construct a new bridge over the Panama Canal, with a $1.42 bil- lion contract. In an article published Sept. 21, Global Americans, a nonprofit platform that provides news and analysis on Latin America, pointed out several cases of Chinese companies being awarded public contracts under dubious circumstances. China Harbor Engineering, for example, was awarded the bridge contract follow- ing the “unexplained withdrawal of one of the competitors from the bidding pro- cess.” Additionally, the company’s final design closely resembled one submitted by the competitor that lost the bid.

US Interests Both the United States and China are heavily dependent on the Panama Ca- nal for trade. According to statistics by government agency Panama Canal Au- thority, in the 2018 fiscal year, the United States was the top user of the canal, with about 68 percent of total trade going to or from the country. China was second, with about 16 percent. Te U.S. congressional committee China Economic and Security Review Commis- sion (USCC), issued a report in October on China’s engagement in Latin America A delegate looks at his smartphone at the 19th Chinese Communist Party Congress in Beijing on Oct. 19, 2017. 18 December 2018

Huawei toes the party line very closely on issues including the persecution of Falun Gong, a peaceful meditation and spiritual practice based on the tenets of truthfulness, compassion, and tolerance.

AP PHOTO/CHIEN-MIN CHUNG

Police detain a practitioner of the spiritual discipline Falun Gong in Tiananmen Square on Oct. 1, 2000. December 2018 19

HUMAN RIGHTS ABUSES Tools Huawei Developed to Persecute Falun Gong Now Repress All of China

JENNIFER ZENG She says that as early as 1999, when the On June 1, 2007, two Taiwanese man- persecution had just begun, Huawei had agers of Taijinbao Company took Wu to WASHINGTON—While the West has only Huawei has adopted a policy of not employing Falun the police station. Te next day, Wu was recently recognized the potential secu- Gong practitioners. transferred to the Wujiang City Deten- rity threat posed by Chinese telecommu- done far Tat year, Mindy was a graduate stu- tion Center in Suzhou City. nications company Huawei, some China more in the dent at Zhejiang University. A Falun Another Minghui report on Feb. 26, insiders have long known that the com- Gong practitioner she knew in the same 2008, stated that Wu was given a three- pany is part of the Chinese Communist persecution university had studied computer science, year jail term in December 2007 and was Party (CCP) apparatus. and before he graduated, he had already held at Nantong Women’s Prison in Ji- Huawei toes the party line very closely of Falun Gong been recruited by Huawei, which was angsu Province. Te report said that she on issues including, for example, the aggressively hiring at the time. had suffered severe mental and physi- persecution of Falun Gong, a peaceful than simply However, when he was about to sign cal damage there and was not in a good meditation and spiritual practice based the contract with Huawei, he found that condition. on the tenets of truthfulness, compas- policing there was an item stipulating that all No updated information about Wu can sion, and tolerance. In cooperating with its own Huawei employees must guarantee that be found. that persecution, Huawei has developed they wouldn’t practice Falun Gong. Another Huawei employee who has tools that should be of concern to ev- employees. “Tis Falun Gong practitioner didn’t been persecuted for his connection with eryone around the world, not just the want to sign this kind of contract,” Min- Falun Gong is Liu Guangrong. According practitioners of Falun dy said. “As a result, he couldn’t be em- to a Minghui report, Liu worked at the Gong in China. ployed by Huawei. And Huawei not only canteen of the European Headquarters had this item in the contract, but also of Huawei Technologies in Dusseldorf, Persecution actively asked every would-be-employee Germany. He was dismissed by the com- In July 1999, then-CCP if they practiced Falun Gong.” pany in September 2008 after he told a leader Jiang Zemin Mindy was married for nearly two Chinese co-worker on the subway on his began a campaign to years to an IT engineer who worked for way to work about the persecution of eradicate Falun Gong Huawei. Her husband also was a member Falun Gong and a grassroots movement out of fear of the large of the Party. Mindy says she once saw a to quit the CCP (known in Chinese as numbers of Chinese rule in his copy of the Huawei employee Tuidang). who found its tradi- handbook that forbade employees from “Te colleague immediately reported tional moral teachings practicing Falun Gong. their conversation to Liu Guangrong’s more attractive than Te Minghui website, which serves as a departmental chief,” the report states. the party’s atheist ide- clearinghouse for information about the “Te chief told Mr. Liu, ‘You must not talk ology. persecution of Falun Gong, reported the to the Chinese staff about Falun Gong New York resident case of Wu Xia on Aug. 2, 2007. Wu, then and the Quit-the-CCP movement. Our Mindy, who asked to 27, was a Falun Gong practitioner and a company has regulations that do not al- only be identified by Huawei employee who was dispatched to low the staff to talk about these sensitive her given name due the No. 1 Factory of Taijinbao Company (a topics. It will do you no good if you talk to fears for her family Huawei supplier in Suzhou City) to work about these subjects.’” members back in Chi- on quality control, together with her col- na, came to the United league Peng Weifeng. When Peng found Censoring and Spying States from China in out that Wu was a Falun Gong practi- Huawei has done far more in the perse- 2009. tioner, he reported her to her manager. cution of Falun Gong than simply NEWSANALYSIS 20 December 2018

policing its own employees. It has helped put in place the tools used by the Chinese SURVEILLANCE regime to track Chinese citizens and cen- sor what information they can access, thus enabling the persecution. A 172-page internal document from Huawei, written in 2015, was leaked this year and circulated on the inter- US Technology net. Te file was entitled “VCM (video content management) Operation Guide” and was used to train the Chinese re- gime’s internet police on how to monitor, analyze, and process video content in Used for Mass real time. Te police were expected to send out alerts should they find anything “suspicious.” According to Chinese commenta- tor Chen Simin, this leaked document Surveillance in shows Huawei’s deep involvement with the CCP’s surveillance programs “Golden Shield Project,” which is used to block access to information, and “Skynet System,” used for surveillance China, Say US of the whole society. By blocking information, the Chinese regime works to prevent the Chinese people from learning about the massive Lawmakers violations of human rights carried out in the persecution of Falun Gong, as well as the teachings of the spiritual practice. Te surveillance tools Huawei has Program to monitor minority helped to develop are used for many pur- poses, but among them is the tracking populations serves as pilot for nationwide of Falun Gong practitioners. Chen said that the initial demands for implementation and foreign export the Golden Shield Project came from the Public Security Bureau and the 610 Office, the Communist Party executive LEO TIMM nese Communist Party (CCP) has gained access commission tasked with carrying out to trillions of dollars’ worth of technology and the persecution of Falun Gong. As the Chinese regime expands and upgrades other intellectual property that greatly boosted the technology of its campaigns against internal the capabilities of the Chinese police. Social Credit Scores Going dissent, allegations have emerged that Western Rubio and Smith’s letter identified Termo- International know-how indirectly aided the communist state’s Fisher Scientific, an American company based in Te Skynet System identifies an individu- repression of the Chinese people. Massachusetts, as having sold “DNA sequencers al through facial recognition technology In May, U.S. Sen. Marco Rubio (R-Fla.) and Rep. with advanced microprocessors under the Applied and locates the person’s information in a Chris Smith (R-N.J.), who also chair the Congres- Biosystems (ABI) Genetic Analyzer brand to the state database. Tat database now gives sional-Executive Commission on China, sent a Chinese Ministry of Public Security and its Public each person a “social credit” score that letter to the U.S. Department of Commerce ex- Security bureaus across China.” indicates the degree to which the indi- pressing concern about U.S. companies that sold Te letter urged the Department of Commerce to vidual aligns with the regime’s priorities. surveillance and crime-control technology to implement greater measures to prevent technology Te competence Huawei has developed Chinese firms. that could be used to assist the Chinese regime’s in establishing this vast system may be According to the commission’s report about the widespread human rights violations. used to collect data outside China. letter, the Chinese authorities “continue to violate In the ongoing trade war between the United Yu Chao, a U.S. system engineer, said international protections of due process, privacy, States and China, the Trump administration has that the international community should association, religious practice and international broadly taken the CCP to task about its misuse of be very worried about the possibility of prohibitions against torture and arbitrary deten- advanced technology. In April, the Department of Huawei collecting mass data on people tion.” Commerce announced a seven-year ban on sell- from other countries via their devices Citing the example of Xinjiang, Rubio and Smith ing U.S. components to ZTE, a prominent Chinese and networks. Tis information can then described “dramatically increased surveillance tech company that was pioneering an ambitious be used to compile a social credit score activities of Uyghur Muslims and other ethnic mi- 5G network, for shipping U.S.-produced products on non-Chinese as well. norities” living in the northwestern Chinese bor- to Iran and North Korea despite trade sanctions. “Te gloomy picture is, although the derland province. Meanwhile, the lawmakers also Te ban was lifted in July after ZTE paid $1.4 bil- CCP won’t use Americans’ ‘social credit cited a study by Adrian Zenz, a Germany-based lion in penalties. scores’ to stop them from buying airplane researcher who estimates that between 500,000 tickets, they can gain very deep knowl- and 1 million Uyghurs have been detained for “re- Digital Dictatorship edge of virtually everything of someone education” in a vast system of newly constructed Te northwest region of Xinjiang—where a majority who is in their database, and use this camps. of the population practices Islam and belongs to knowledge when needed,” Yu said. In recent decades, as China built up extensive various Central Asian ethnic groups rather than “And that is really, really terrifying.” economic ties with the outside world, the Chi- the Han Chinese national majority—has been a December 2018 21

GUANG NIU/GETTY IMAGES

Chinese policemen push source of religious and ethnic unrest since the ground for sophisticated forms of mass surveil- Uyghur women who are Chinese Communist Party took power in 1949. lance and control, made possible by the newest protesting in a street One of the Te CCP, which promotes atheism and Marxism, developments in digital technology. in Urumqi, Xinjiang has treated Chinese Islam with the same ideologi- Advanced facial recognition software allows the Province, China, on July companies cal prejudice that it uses to persecute other reli- public security authorities to track the movements 7, 20 0 9. gious faiths. During the Cultural Revolution, Mus- of just about every person using an extensive sys- working with lims were often attacked and humiliated, such as tem of security cameras, while their cell phones the public by being forced to consume pork. In later decades, are subject to frequent scanning. Police also collect terrorist attacks and other acts of defiance against samples of the blood and saliva of Xinjiang resi- security the Chinese regime by Muslim radicals and ethnic dents for storage in state DNA databases, as well separatists invited overwhelming crackdowns by as fingerprints and voice recordings. authorities the CCP security forces. Police methods pioneered in Xinjiang have been According to Adrian Zenz’s report, the Chinese implemented elsewhere in China, where the dra- in Xinjiang regime has imposed an unprecedented level of conian “social credit system” was recently used to is Chinese control over the population of Xinjiang, using bar people with low scores from buying air and brainwashing techniques originally devised to rail tickets. technology “transform” adherents of Falun Gong—the spiritual Large state-backed Chinese tech firms are play- practice the CCP banned in 1999 and has tried to ing a major role in the development of digital police firm Huawei. eradicate in the nearly two decades since. tools. Meanwhile, Xinjiang has served as a testing As reported in a May 14 article by Te Globe 22 December 2018

and Mail, one of the companies working CHINA TECHNOLOGY with the public security authorities in Xin- jiang is Chinese technology firm Huawei, which recently set up a development lab in Urumqi, the provincial capital of Xin- jiang, in cooperation with the local police to ensure “social stability and long-term security.” “Te fact that companies like Huawei Suicide of are able to develop such systems in regions like Xinjiang in tandem with the secu- rity services, and therefore with very few privacy restrictions—they are gaining a problematic advantage over comparable Chinese Western companies,” said Adrian Zenz, who is an expert on Xinjiang at the Euro- pean School of Culture and Teology in Korntal, Germany, in an interview with Te Globe and Mail. Scientist Sparks “Moreover, the fact that these systems can serve multiple purposes at the same time—both improve city efficiency and governance and enable intrusive surveil- lance—makes surveillance both more ac- Controversy cessible and perhaps also more palatable in other nations.” NICOLE HAO Citing human rights workers, Te Globe and Mail noted that Huawei, being a major Stanford University physicist cerns about intellectual property theft multinational company controlled by the and entrepreneur who was from the United States and the use of data Chinese authorities, could help facilitate rumored to be in line for the to enable repression inside China, but also the expansion of the CCP’s “stability main- Nobel Prize committed sui- by his deep involvement in general with tenance” methods beyond China’s borders. cide on Dec. 1. His suicide has the Chinese regime. “Te surveillance technologies being de- Adrawn attention to his record of achieve- In his career, Zhang had multiple con- veloped and deployed in Xinjiang today ment and his work to advance the objec- nections with the regime, as a state-spon- will soon be sold and promoted globally,” tives of the Chinese regime. It has also sored academic, a funder of technology said William Nee, a researcher at Amnesty inspired speculation about what caused projects in the West meant to benefit International, in an interview with Te this gifted man to kill himself. Beijing, as a recipient of state-sponsored Globe and Mail. “It is now absolutely vital On the same day Zhang Shoucheng funding meant to propel his venture-cap- that the international community take a committed suicide, the chief finan- ital projects, as likely having connections stand and confront the human rights vio- cial officer of the controversial Chinese with one of the more powerful individu- lations occurring in Xinjiang as a matter telecommunications company Huawei, Physicist and venture als in China, and as a researcher whose of strategic importance. Meng Wanzhou, was arrested. Chinese- capitalist Zhang discoveries were key to the regime’s goals. “Huawei, for example, has promoted a language media have speculated there is Shoucheng. Zhang’s company, Digital Horizon Capi- ‘smart city’ concept that it has marketed a connection between the scientist’s death tal (DHVC, previously known as Danhua around the world.” Nee characterized the and Meng’s arrest, or between his death Capital), is a major financier of technol- concept as a tool “to facilitate city planning and U.S. investigations into intellectual ogy found in Huawei phones, and receives and management of vital services such as property theft. Chinese state funding. transportation and security.” Zhang’s family has responded to these Zhang had Zhang was also recently appointed as media reports with a statement: “Tere is received a distinguished professor at Shanghai- NICOLAS ASFOURI/AFP/GETTY IMAGES no police investigation, and the authori- Tech University and tasked with estab- ties have no suspicions about Professor numerous lishing a new research institute there. Zhang’s death. You will read that he com- international Since September 2013, the president of mitted suicide, and this is true. It occurred ShanghaiTech University has been Ji- in San Francisco. But you will also read in awards since ang Mianheng—the eldest son of former the family statement that he had periodic 2007 for his Chinese Communist Party leader Jiang bouts of depression.” achievements. Zemin—who also has close ties to Hua- Te family also stated: “Tere is no wei. ShanghaiTech was founded by the connection between his death and other Shanghai municipal government and the events in U.S.–China relations, which has state-run Chinese Academy of Sciences. been speculated by some. Tis kind of mis- information is not only untrue but hurtful Financing From China to Professor Zhang’s family, friends, and A November report by the Office of the colleagues.” U.S. Trade Representative lists DHVC as being part of China’s “web of entities” Multiple Connections established in Silicon Valley “to further Te speculation about Zhang’s death is the industrial-policy goals of the Chinese A paramilitary police ofcer near Tianan- no doubt fueled by his connections with government.” men square in Beijing on Oct. 22, 2017. Huawei, which is at the center of U.S. con- Such venture-capital firms invest in a December 2018 23

wide range of startups, then “to varying the CEO of Qeexo, said at the 2017 Mobile bition to become a tech manufacturing degrees have access to information, tech- World Congress held in Barcelona, Spain. powerhouse. nology, and the ability to influence and In his career, Qeexo was founded in 2012. Its signifi- Apart from this, Zhang is famous for his potentially coerce management,” accord- Zhang had cant investors include Zhang’s DHVC and work on the quantum Hall effect, the quan- ing to the “Section 301” report, an update two other companies. tum spin Hall effect, spintronics, and high- on a prior investigation on China’s intel- multiple Like the Jiang family, Zhang came from temperature superconductivity. His passing lectual property theft practices released connections Shanghai. In 1980, he went abroad and marked a great loss to the field of physics. in March. with the regime, eventually became a naturalized U.S. Zhang had received numerous interna- Zhang’s firm traces its funding to Chi- citizen. tional awards since 2007 for his achieve- nese state-affiliated entities. An invest- as a state- In 1999, Zhang was selected to join the ments, including the Oliver Buckley Prize, ment arm of the state-owned firm Zhong- sponsored Changjiang Scholars and Professors pro- the Dirac Medal, the Europhysics Prize, guancun Development Group (ZDG) has gram by China’s Ministry of Education, the Physics Frontiers Prize in Fundamen- backed DHVC, among a number of other academic, an initiative to further develop higher tal Physics, and the Benjamin Franklin venture-capital firms in Silicon Valley. a funder of education in China. Medal. At the time of his death, he and his When DHVC was first established in technology In 2008, Zhang was recruited into Chi- research team were floated as candidates 2013, Beijing’s mayor attended the com- na’s Tousand Talents plan, a Beijing-led for a Nobel Prize in Physics. pany’s signing ceremony in Silicon Valley, projects in the effort to attract top scientists and engi- according to the report. A press release West meant neers from overseas to work in China, to Jiang Relations on the ZDG website explained that DHVC conduct research at Tsinghua University. On Jan. 23, the state-run China News Ser- would focus on innovative tech developed to benefit Since then, Zhang was active in China’s vice reported that Zhang was setting up a at Stanford University and other nearby Beijing, and as academic community. Frontier Science and Technology Research universities, for the purpose of steering a recipient of Zhang had made public statements ex- Institute within ShanghaiTech University. projects to Beijing’s Zhongguancun tech pressing a desire to help China’s scientific Te report quoted Xu Li, the director of the hub to commercialize. state-sponsored development. In 2013, he became an aca- Shanghai government’s Overseas Chinese “Zhongguancun capital goes out and funding meant demic at the Chinese Academy of Sciences. Affairs Office, as saying that Zhang’s insti- foreign advanced technology and human In 2017, Zhang “discovered a new state tute had the support of the office. capital is brought in,” the press release to propel his of matter called topological insulator While the exact relationship between read. venture-capital in which electrons can conduct along Jiang and Zhang is unclear, Chinese uni- ZDG’s investment arm helped convince the edge without dissipation, enabling versity heads are usually acquainted with Chinese tech giants Alibaba and Baidu to projects. a new generation of electronic devices all professors at their schools. Te estab- contribute to DHVC’s first round of fund- with much lower power consumption,” lishment of a new research institute would ing, raising the total to about $91 million, according to the U.S. National Academy certainly happen only with the approval according to the report. iFlyTek, a Chinese of Sciences. of the president. voice-recognition company that has re- Tis research was seen as critical for fur- Adding to the uncertainty, following ceived Chinese state funding and works ther developing semiconductor chips with Zhang’s death, all reports about the re- closely with China’s Ministry of Industry greater storage and processing capacity. lationships between him and Chinese and Information Technology, has invested Tat is an innovation the Chinese regime entities and prominent individuals have $5 million in DHVC. has aggressively supported to fuel its am- been deleted by Chinese internet censors. BOE Technology Group Co., a tech firm PERE JOAN/WIKIMEDIA COMMONS that counts the Chinese regime as its big- gest shareholder, invested about 60 mil- lion yuan ($8.9 million). Te report also noted that Meta, an augmented-reality startup that’s among the 113 companies in DHVC’s portfolio, announced in September that it would lay off half its employees in Silicon Valley and move operations to China, “after the Chinese government pressured Chinese investors.” DHVC also invests in Cohesity, a data management company that counts the U.S. Department of Energy and U.S. Air Force as clients, according to a Reuters report.

Zhang, Jiang, and Huawei Zhang seems to have some connection both with Huawei, via DHVC, and with Jiang Mianheng, through his connections to ShanghaiTech. Huawei’s smartphone P10 has a function named FingerSense, which allows users to use their knuckles to interact with the phone’s touchscreen. Tis technology was pioneered by Qeexo, a U.S. company. “It’s Qeexo’s honor that Huawei ex- tended our cooperation,” Sang Won Lee, The Stanford University campus. Zhang Shoucheng was a well-regarded physicist and professor at the school. Share the Joy! Tell your friends and family how they can subscribe to Te Epoch Times

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