What to Expect Following Canada’s Huawei Ban

An Interview with Margaret McCuaig-Johnston

 

The following is a synopsis of an interview the CDA Institute conducted with Margaret McCuaig-Johnston.

Last month, the federal government announced that Huawei and ZTE will be banned from Canada’s fifth-generation wireless network (5G), citing national security concerns. Despite encouragement from Canada’s Five Eyes partners, the decision to ban Huawei and ZTE still faced significant delays after the two Micheals were released. While the ban has been welcomed by many, there are still significant security concerns to consider in the near-term.

“China did not predict this routing of Russia that we have witnessed in Ukraine. They thought they were associating themselves with what would be a successful campaign, and it hasn’t been.”

What calculations went into the Trudeau government’s delay of the Huawei decision? What were some of the benefits and costs of delaying the decision?

They were delaying the decision until the Two Michaels came home in my view. Within a couple of days of the Michaels coming home, the Prime Minister announced that the Huawei decision would be made within a few weeks. It took eight months. Perhaps it was pressure from China. Perhaps they were trying to assess the way in which the ban would be laid out. It seems they’ve chosen legislation. Our Five Eyes allies were encouraging us to do this a lot sooner, so it was disappointing. What’s important is they took the right decision. Other decisions related to China have also been delayed. The Indo-Pacific Strategy still isn’t out. It’s been in development for 2½ years.

More critically, we’ve been concerned about being exposed to Huawei 5G equipment. Telus announced in February 2020 that it was going to start installing Huawei equipment. They now have a large amount of Huawei software and hardware that they’ve been installing for two years. Now the government announced that they will be given 2 years to take it out. That’s four years of exposure to the national security riskThat is the most significant problem associated with the delay. For the next two years they will be making weekly updates and fixes to their installed 5G equipment via backdoors – the very backdoors by which Chinese could intelligence authorities could demand that Chinese companies use to spy on us.

What are the implications of the ban for national security and diplomacy? How has China responded, and can we expect any repercussions, or backlash? Does this decision pose further risk to Canadian businesses or individuals in China?

The Chinese ambassador has threatened retaliation if we were to ban Huawei. China has threatened other countries as well on similar grounds. We have seen what happened with the Australians when they called for an investigation into the origin of COVID-19. They’ve had multiple industry sectors hard hit by trade retaliation, which is still ongoing more than two years later. China also detained two Australian citizens. I don’t think it’s a risk for Canadian visitors going to China. However, China does detain citizens of a particular country who live in China, and have lived there for some time, and have interesting networks, especially networks into North Korea, with specific businesses in China, or with human rights and environmental activists. What follows is often months and months of harsh interrogations in a tiger chair—a metal chair where your wrists and your ankles are clamped. It’s very, very painful to sit there for six or eight hours straight. They’re trying to get information from these individuals about their affiliations. It is two-sided—it’s retaliation against the country using an innocent citizen, and it can also provide them with valuable information by way of interrogation.

What has been the impact of the war in Ukraine for China-Russia relations and where does Russia fit into China’s geopolitical agenda?

China doesn’t have allies, it has customers—countries that it treats as vassal states, and countries that it uses. I would put Russia into the basket of countries it uses. The war in Ukraine has created complications for China as they advertised this new relationship with Russia. I’m sure that Beijing’s leaders were fully expecting Russia to win in a week or two.  Now they’re trying to assess how they can protect their own interests in a shifting situation.

China did not predict this routing of Russia that we have witnessed in Ukraine. They thought they were associating themselves with what would be a successful campaign, and it hasn’t been. China’s efforts to use Russia as a means of getting closer to the Arctic have been hampered by the war. They set up a joint R&D lab, they’ve had joint military exercises in the Arctic, and they were hoping to use Russia’s chairmanship of the Arctic Council as a way of getting onto the Council themselves.

There are parallels with this conflict and what might occur with Taiwan. Russia has attacked a neighbour—a sovereign, independent country. China is open about attacking and conquering a neighbour, which is also a democratically elected government. Beijing is watching very carefully what NATO is doing in support of Ukraine and drawing some lessons for what it might do in support of Taiwan. President Biden has further advanced that by indicating publicly, twice, that the U.S would come to the military support of Taiwan.

That is something that China will now have to think carefully about. We could see the simple provision of equipment as we’re doing in Ukraine, all the way through to full defensive support.

Foreign Affairs Minister Melanie Joly recently stated that we need to focus on rebuilding Ottawa’s relationship with Beijing and re-establish ties. What is the future of Canada’s relationship with China and how would we go about re-establishing ties? Furthermore, what might we expect from the upcoming Indo-Pacific strategy slated for release?

The most generous reaction I might give it is that perhaps she thought a comment like that would soften the blow of the Huawei decision and help us reduce the risk of retaliation. So, it could be strategic. In my view, we should not be overtly trying to rebuild the relationship with China—we will always have trade with China.

China has made no such similar suggestion that it wants to repair the relationship with Canada. Just the reverse, we’re continuing to see lack of engagement from China and indeed, threats.I’ve been advising companies that if they can’t afford to lose their China business overnight, if they have too big a percentage of their investment in China, they should diversify to other countries in the region. That’s why I proposed an Indo-Pacific Strategy in the summer of 2019—to provide resources and increased trade and investment funding for the Department to help those companies find other markets. Those markets are better than China in Many ways.

I’m pleased with the Huawei decision. I’m glad that the government isn’t supporting compensation for the carriers. Given the many security risks that have been identified with Huawei equipment, they’ve known that something like this was coming for some time. If they have gotten too heavily into Huawei equipment like TELUS has, that’s a serious risk management issue that the shareholders and the board should be engaged on. I am concerned that the companies and carriers are being given until June 2024 to replace their 5G equipment. It should be less than a year. Frankly, Huawei is a major partner of the Chinese military, and we shouldn’t be doing any R&D with Huawei either. The government should not move their timeline back at all. It’s a great decision and will we want to watch the details of the implementation.

 

 

Margaret McCuaig-Johnston  is a Senior Fellow at the Institute for Science, Society and Policy, Senior Fellow with the University of Alberta’s China Institute and Distinguished Fellow with the Asia Pacific Foundation of Canada. Formerly, she was Executive Vice-President at NSERC where she was responsible for strategic operations, including research policy and international relations. She was also a member for seven years of the Steering Committee for the Canada-China Science and Technology (S&T) Initiative.