Canada prepared for possible Chinese cyber retaliation over arrest of top Huawei executive - The Globe and Mail - Canadanewsmedia
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Canada prepared for possible Chinese cyber retaliation over arrest of top Huawei executive – The Globe and Mail



Meng Wanzhou, Executive Board Director of the Chinese technology giant Huawei, attends a session of the VTB Capital Investment Forum “Russia Calling!” in Moscow, Russia, Oct. 2, 2014.


Canada’s cyber security chief says his agency is prepared for possible Chinese cyberattacks in retaliation for the arrest of Huawei’s chief financial officer in Canada for alleged violations of U.S. trade sanctions against Iran.

Scott Jones, director of the Canadian Centre for Cyber Security, would not comment on the detention of Meng Wanzhou, who was picked up by Canadian law enforcement officials in transit at Vancouver airport Dec. 1.

The U.S. authorities requested her arrest and extradition on suspicion she violated U.S. trade sanctions against Iran. Her apprehension has drawn sharp protests from China and demands for her immediate release.

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Mr. Jones said Canadian cyberauthorities are ready in case China is tempted to attack this country’s communication infrastructure.

“We always have to be resilient no matter what the possible trigger could be so we increase our resilience against any form of malicious activity that we could be facing as a nation,” he told a news conference on the release of the the cybersecurity agency’s annual report. “We are working very closely with the broader security community.”

China has angrily rebuked the Canadian government for the arrest of the high-profile telecom executive, whose father Ren Zhengfei is the founder of Huawei, the largest private company in China and the No. 2 mobile phone maker in the world.

“Detaining a person without providing an explanation has undoubtedly violated her human rights,” said Chinese foreign ministry spokesman Geng Shuang, while the Chinese embassy in Ottawa said Ms. Meng had not violated Canadian or U.S. law and demanded her immediate release.

“The Chinese side has lodged stern representations with the U.S. and Canadian side, urged them to immediately correct the wrongdoing and restore the personal liberty of Ms. Meng Wanzhou,” the embassy said in a statement. “We will closely follow the development of the issue and take all measures to resolutely protect the legitimate rights and interests of Chinese citizens.”

U.S. prosecutors in New York have been investigating whether Huawei violated U.S. sanctions in relation to Iran, which was first reported by the Wall Street Journal in April.

Huawei said in a statement to The Globe and Mail that Ms. Meng faces “unspecified charges in the Eastern District of New York” and that she was arrested when she was transferring between flights in Canada.

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A Justice Department official in Ottawa said Ms. Meng will appear for a bail hearing in a Vancouver courtroom on Friday. “As there is a publication ban in effect, we cannot provide any further detail at this time. The ban was sought by Ms. Meng,” Ian McLeod said.

The decision by Canadian authorities to detain such a high-profile Chinese citizen – and particularly one sought for extradition to the United States – could hurt Canada-China relations.

Both China and the United States have been asking allies and trading partners to take sides in a trade war, and the Trudeau government has spoken enthusiastically of pursuing some sort of trade deal with Beijing now that it has renegotiated a free-trade agreement with the United States and Mexico.

David Mulroney, a former Canadian ambassador to China, predicted the arrest of Ms. Meng will provoke a backlash in China and hurt Huawei’s efforts to gain business in Western countries.

“This is a really big deal. Ms. Meng is by birth and position a member of China’s corporate royalty,” he said.

“Her arrest, on suspicion of violating the Iran sanctions, should be seen as a clear signal that Canada is willing to face China’s fury to do the right thing. That said, it will be portrayed in China as Canada kowtowing to Donald Trump. The arrest also threatens to fatally undermine Huawei’s efforts to portray itself as a reliable infrastructure partner to its remaining supporters in the West.”

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The arrest comes as Canada is under intense pressure from the United States to bar the Chinese telecom company from participating in next-generation 5G mobile networks. The United States and Australia have barred Huawei 5G telecommunications, and last week New Zealand blocked the first request from one of its wireless carriers to install the Chinese company’s equipment on its 5G network, citing a “significant network security risk.” The United States, Canada, Britain. Australia and New Zealand are members of the Five Eyes intelligence-sharing alliance.

On Thursday, one of Britain’s major telecoms, BT Group PLC, said it was removing Huawei equipment from its network and would not buy the company’s 5G technology – a move that came after Alex Younger, the head of Britain’s Secret Intelligence Service, known as MI6, questioned whether his country should be using the Chinese telecom gear.

Mr. Jones has previously rejected the idea of blocking Huawei, saying this country’s safeguards are adequate to mitigate any risk. He’s also boasted of what he considers a robust system of testing facilities for Huawei equipment and software to prevent security breaches – one he’s suggested is superior to those of some of Canada’s allies.

“We have a very advanced relationship with our telecommunications providers, something that is different from most other countries to be honest, from what I have seen,” Mr. Jones told the House of Commons committee on public safety and national security in September.

Asked Thursday whether he agrees with his counterparts in the United States, Australia and New Zealand that Huawei equipment is too risky to be allowed into 5G networks, Mr. Jones said Canada is still reviewing the question.

He also again expressed the opinion that circumstances in Canada are different from other Five Eyes countries.

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“The key thing is Canada has unique circumstances that we have to take into account here. We’re going to look at it comprehensively and make a decision that is in the best interest of Canadians.”

Asked to elaborate on what precisely is different in Canada from the United States, Australia or New Zealand, he said Canada is a “large country” and that the government has “unique relationships with our telecommunications providers.”

He repeated his assertion that Canada’s relationship with telecom companies is different from allies.

“We work in a different way. We have different ways of managing most security risks but also how do we work in partnership.”

Pressed further to explain how Canada is unique compared to other Five Eyes countries, Mr. Jones said Canada has a lot of residents in the countryside.

“The fact is we have a large rural population. We have to design things that work for that. We have to take into account a number of different factors.”

Mr. Jones would not say when the security review would be completed but any move to allow Canadian telecommunications companies to use Huawei 5G technology would likely be met with fierce resistance from the United States.

On Wednesday, Republican Senator Marco Rubio, a member of the U.S. Senate intelligence committee, lauded Canada for the arrest of Ms. Meng and once again urged Prime Minister Justin Trudeau to bar Huawei from 5G technology.

“Huawei has direct ties to the Chinese government and Communist Party, has long posed a serious risk to U.S. national security, and I continue to strongly urge Canada to reconsider Huawei’s inclusion in any aspect of its 5G development, introduction, and maintenance,” Mr. Rubio said in a statement to The Globe.

Mr. Rubio and Democratic Senator Mark Warner wrote to Mr. Trudeau in October to caution that failure to ban Huawei could interfere with intelligence sharing and impair cross-border co-operation in telecommunications.

Republican Senator Ben Sasse, a member of the Senate armed services and banking committees, also praised Canada for the arrest and criticized Huawei as an agent of China’s ruling party.

“China is working creatively to undermine our national security interests, and the United States and our allies can’t sit on the sidelines,” Mr. Sasse said. “Americans are grateful that our Canadian partners have arrested the Chief Financial Officer of a giant Chinese telecom company for breaking U.S. sanctions against Iran.”

Democratic Senator Chris Van Hollen said Huawei and Chinese telecom ZTE represent a fundamental risk to Western national security and called for a comprehensive plan to hold “the Chinese and their state-sponsored entities accountable for gross violations of the law and threats to our security.”

Since at least 2016, U.S. authorities have been reviewing Huawei’s alleged shipping of U.S.-origin products to Iran and other countries in violation of U.S. export and sanctions laws.

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China has banned sales of Apple iPhones 6 through X in Qualcomm patent dispute – Financial Post




Qualcomm Inc on Monday said it had won a preliminary order from a Chinese court banning the importation and sale of several Apple Inc iPhone models in China that the court found violated two of Qualcomm patents.

The preliminary order affects the iPhone 6S through the iPhone X. The ruling came from the Fuzhou Intermediate People’s Court in China, the same court that earlier this year banned the import of some of memory chip maker Micron Technology Inc’s chips into China. Qualcomm initially filed the case in China in late 2017.

The court found Apple violated two of Qualcomm’s software patents around resizing photographs and managing applications on a touch screen.

“Apple continues to benefit from our intellectual property while refusing to compensate us,” Don Rosenberg, general counsel of Qualcomm, said in a statement.

Because the patents concern software, Apple could make changes to its software to avoid the patents and still be able to sell its phones.

The patents in the suit, which Qualcomm said on Monday had been upheld by the Chinese patent office, are separate from those being contested in other cases in its wide-ranging legal dispute with Apple. Qualcomm has also asked regulators in the United States to ban the importation of several iPhone models over patent concerns, but U.S. officials have so far declined to do so.

The specific iPhone models affected by the preliminary ruling in China are the iPhone 6S, iPhone 6S Plus, iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus and iPhone X.

© Thomson Reuters 2018

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Elon Musk says Tesla may consider buying idle General Motors plants – Financial Post




Tesla Inc. Chief Executive Officer Elon Musk told CBS’s “60 Minutes” that he may be willing to buy some of the five factories General Motors Co. will idle next year, making him the second rival in two days to step up with possible job-creating moves as GM takes political heat for cutting workers.

Musk made the statements in an interview with Leslie Stahl that was to air Sunday. CBS released excerpts Friday.

GM CEO Mary Barra was in Washington the past two days meeting with members of Congress about her plans to close five factories in North America and lay off 14,700 workers. She is under pressure to keep some of those facilities opened.

Tesla Inc. Chief Executive Officer Elon Musk told CBS’s 60 Minutes that he may be willing to buy some of the five factories General Motors Co. will idle next year.

AP Photo/Kiichiro Sato, File

While Barra was speaking with legislators on Thursday, Fiat Chrysler Automobiles NV said it will reopen one of its idle engine plant in Detroit and build a new Jeep, intensifying the irritation in Congress over GM’s plan to cut jobs.

Tesla makes the all-electric Model S, Model X and Model 3 at its sole auto plant in California, which it bought from a joint venture operated by GM and Toyota Motor Corp.

The “60 Minutes” interview, which was filmed at Tesla’s lone auto plant in Fremont, California, largely focused on Tesla’s year in which it raced to ramp up production of the Model 3 sedan. Musk credited the decision to build a third general assembly line outside under a tent with saving the company.

Assembly Line Tent

“It was life or death,” said Musk. “Those betting against the company were right by all conventional standards that we would fail. But they just did not count on this unconventional situation of creating an assembly line in a parking lot in a tent.”

Stahl pressed Musk on the string of complaints about conditions inside company factories, including unreported injuries, abusive conditions and excessive hours. Musk said there’s been an “aggressive campaign” by the United Auto Workers to attack Tesla with a “load of nonsense” in an effort to unionize the carmaker.

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GM lobbies for tax credit – Business News –




General Motors is fighting to retain a valuable tax credit for electric vehicles as the nation's largest automaker tries to deal with the political fallout triggered by its plans to shutter several U.S. factories and shed thousands of workers.

Preserving the $7,500 tax incentive for buyers is crucial for GM as the company pivots from internal combustion engines in favour of building cars powered by batteries or hydrogen fuel cells. Yet the layoffs and plant closings could imperil GM's push to keep the incentive. It helps make plug-ins such as the $36,000 Chevy Bolt more affordable at a time when competition from other electric vehicle makers is heating up.

GM faces opposition from President Donald Trump and other Republicans who consider the credit a waste of taxpayer money and want it eliminated. Trump, who has pledged a manufacturing rebirth in the Midwest, reacted angrily to GM's "transformation " announcement late last month, declaring that his administration was "looking at cutting all GM subsidies, including for electric cars."

The company already is on the verge of being phased out of the tax credit program unless Congress changes a law that caps the break at 200,000 vehicles per manufacturer. Without the incentive, GM may be forced to cut the price of its electric cars to keep prospective customers from taking their business elsewhere, according to automotive industry experts.

As evidence of the credit's importance to GM's future, the automaker has expanded its lobbying footprint in Washington and even joined forces with two rivals, Tesla and Nissan, to call for 200,000-vehicle limit to be scrapped.

Standing in the way of that goal is Sen. John Barrasso, R-Wyo., the chairman of the Senate Environment and Public Works Committee. Barrasso introduced legislation in October to abolish the tax credit, a move he said would save about $20 billion over the next 10 years. He has argued the market for electric vehicles is already established and "no longer needs the crutch of government assistance."

"The idea of the subsidies had to do with trying to make sure that electric vehicles would be a viable technology," Barrasso said. "Well, that's clearly there."

The tax credit came up briefly during a private meeting on Wednesday between Ohio's senators, Republican Rob Portman and Democrat Sherrod Brown, and GM chief executive Mary Barra, according to a congressional aide familiar with the conversation. As part of the restructuring, GM said it will stop making the Chevy Cruze at its Lordstown, Ohio, plant by March and is considering closing the plant for good.

Portman told Barra that it's difficult to help with priorities such as the electric vehicle credit when GM is moving production out of Ohio, according to the aide, who was not authorized to publicly discuss the private conversation and spoke on condition of anonymity.

One of the lobbyists working to salvage the credit for GM is Kent Hance, a former chancellor of Texas Tech University who is well connected in GOP circles, according to his online profile . Hance lists his role as a fundraiser for the campaigns of outgoing House Speaker Paul Ryan, R-Wis., Senate Majority Leader Mitch McConnell, R-Ky., House Majority Leader Kevin McCarthy, R-Calif., and others. He has known Rick Perry, the energy secretary and former Texas governor, for nearly 30 years.

GM in early August named a former Trump White House official, Everett Eissenstat, its senior vice-president for global public policy, a post that oversees the company's lobbying operations. Eissenstat, however, is not registered as a lobbyist, according to disclosure records filed with Congress. Before coming to GM, he was Trump's deputy assistant for international economic affairs.

Under federal law, the $7,500 credit for buyers begins to phase out after a manufacturer has sold 200,000 qualifying electric vehicles. GM has estimated it will hit that threshold by the end of December, just as the Bolt will be facing new and potentially stiff competition.

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