China-Canadian Relations, Huawei's Proposed 5G Network, and Cyber Espionage


In 2016, a Chinese telecommunication company (China Telecom) covertly diverted South Korean-bound Canadian internet traffic directly through and into China over a period of 6 months. According to Israeli cybersecurity specialist and electrical-engineering expert Yuval Shavitt, Rogers subscribers (which includes businesses of various sizes) in and around Canada's national capital area were particularly affected. Shavitt used this incident as a case-in-point to caution the Canadian government from doing business with Huawei Technologies, another Chinese telecommunications giant which is contending to build Canada's next-generation 5G wireless communications networks. 

The "Shavitt-Demchak" report within which this incident was first explained described how China Telecom uses two and eight points of presence in Canada and the U.S. respectively to take "information-rich" Internet traffic crossing its network with noticeable effect to the end user/consumer. The report in question called internet points of presence the "perfect scenario for long-term espionage" as local alarm bells would not be raised about "long-term traffic detours". 

The danger with allowing Chinese companies like Huawei into Canadian markets is that many of these large Chinese companies are either state-owned companies or have government officials occupying executive positions. Even with privately owned Chinese companies with no government officials in executive positions, Chinese companies have a dangerous tendency of co-operating with the Chinese-government. Despite any of the above, Huawei has repeatedly denied that it co-operates with Chinese intelligence or ever would, stating that it would be highly detrimental to the company's business and affairs. 

Needless to say, the decision as to whether or not Huawei should be permitted to proceed with its plans to supply hardware and software to Canadian companies has become highly politicized due to the recent arrest of Huawei's chief financial officer by Canadian officials. The arrest was made at the request of U.S. authorities, which are seeking to have Huawei's CFO extradited to the U.S. to face 23 criminal charges, notably fraud, trade-secret theft, conspiracy, and violations of international sanctions imposed on Iran. Since the arrest, China has jailed to Canadian citizens working in China and has imposed a death sentence on a third Canadian citizen. 

In 2016, CSIS (Canadian Security Intelligence Service) had issued a warning to the effect that China and Russia were zeroing their cyber espionage efforts on Canadian government officials, information systems, classified information, advanced technology, corporate secrets, and intellectual property of Canadian companies.

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