Canada bans use of Chinese Huawei technologies in 5G networks

Wireless carriers in Canada will not be allowed to install Huawei equipment on their high-speed 5G networks, the Canadian government announced Thursday, joining its allies in banning the Chinese tech giant.

Canada was the only member of the Five Eyes intelligence pooling alliance that did not ban or restrict the use of Huawei Technologies Co. equipment. Ltd. on their 5G networks. The United States and other participants – the United Kingdom, Australia and New Zealand – have previously banned Huawei.

“We are announcing our intention to ban the inclusion of Huawei and ZTE products and services in Canada’s telecommunications systems,” Industry Minister François-Philippe Champagne said in a statement.

Canada’s ban also applies to ZTE Corp.
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one of the largest technology companies in China and state-owned.

Champagne added that “suppliers who have already installed this equipment will have to stop using it and remove it.” He said Canadian wireless companies would not be offered compensation.

Major Canadian wireless carriers have already started working with other providers.

“Many hostile actors are ready to exploit vulnerabilities in our defense,” said Minister of Public Security Marco Mendicino.

Mendicino said the government has been scrutinizing and redoubling its efforts to protect Canadians.

China denounced the decision against one of its national champions as a form of “political manipulation” carried out in coordination with the United States to “crush” Chinese companies in violation of free market principles.

“China will carefully and seriously evaluate this incident and take all necessary measures to protect the legitimate rights and interests of Chinese companies,” the Chinese Embassy in Canada said in a statement posted on its website.

China regularly uses such language in trade disputes, which often does not lead to a firm response from Beijing.

The US government has been pressuring its allies like Canada for years to exclude Huawei from the new ultra-fast 5G mobile networks, fearing that China’s communist rulers will pressure the company into cyber-espionage. The United States warned that it would reconsider sharing intelligence with all countries using Huawei equipment.

The company has repeatedly denied the allegations.

“We are disappointed, but not surprised. We are surprised that it took the government so long to make a decision,” said Huawei spokesman Alihan Welshi. “We view this as a political decision, born of political pressure, primarily from the United States.”

Welshi said that there will be Huawei equipment in Canada in the coming years. He said the company has more than 1,500 employees in Canada, and two-thirds of them are in research and development.

The development of 5G, or fifth generation networks, will give people faster online connections and massive amounts of data to meet insatiable demand as more things become connected to the Internet and innovations like virtual reality, immersive games and autonomous vehicles emerge.

Huawei is the world’s largest provider of network equipment for telephone and Internet companies. It was a symbol of China’s progress as a technological global powerhouse, as well as a US security and law enforcement concern. Some analysts say Chinese companies have flouted international rules and standards and stolen technology.

China, the United States and Canada completed a high-stakes prisoner exchange last year that involved a senior Huawei executive accused of fraud by the United States.

China jailed two Canadians shortly after Canada arrested Meng Wanzhou, the chief financial officer of Huawei Technologies and the daughter of the company’s founder, following a US extradition request. They were returned to Canada in September, the same day Meng returned to China after reaching an agreement with US authorities on her case.

Many countries have called China’s actions a “hostage-taking policy,” while China has called the accusations against Huawei and Meng a politically motivated attempt to curb China’s economic and technological development.

“The decision should have been made two or three years ago, but better late than never,” Guy Saint-Jacques, Canada’s former ambassador to China, said of the decision to ban Huawei. “We are facing a much more aggressive China in the way it conducts its foreign policy and also in how it obtains information to achieve its goals.”

Saint-Jacques said that under Chinese law, no company can refuse the Chinese government’s request to share information, so allowing Huawei to be involved would be impossible.

He expects China to respond.

“I think we’ll hear from them soon,” he said. “They use trade as a weapon, and I suspect that’s what we’re going to see in this case.”