Could a Huawei 5G ban hurt Canadian telcos? Not significantly, analyst says
OTTAWA -- Chinese telecom giant Huawei isn't the only company that can build Canada's next-generation wireless networks, the Trudeau government said Monday as China muted its threat to retaliate if Canada bans the company.
Federal Public Safety Minister Ralph Goodale and Innovation Minister Navdeep Bains offered a sharp retort to China's ambassador to Canada, who warned last week of repercussions if the federal government bars Huawei from supplying equipment for faster, more resilient communications systems than cellphone users have now.
When asked about the government's ongoing national-security review of Huawei's potential involvement, Goodale said there are other suppliers besides Huawei that can set up Canada's 5G networks.
"There are other suppliers, yes indeed," Goodale said.
Bains named one: "Ericsson is another provider," he said, referring to the Swedish telecom company.
China views Huawei as one of its corporate jewels as it tries to battle slowing economic growth. That fact came into sharp focus on Monday when China reported that its economy expanded by 6.6 per cent in 2018, its slowest rate of growth since 1990.
A Chinese foreign-ministry spokeswoman attempted to play down the earlier remarks by Chinese Ambassador Lu Shaye. The envoy told reporters in Ottawa last Thursday that there would be "repercussions" if Canada bans Huawei from 5G work.
"To my understanding, he did not mean that China intends to interfere in the decision-making of the Canadian government," spokeswoman Hua Chunying said in a Monday briefing in Beijing, according to a transcript on the foreign ministry's website.
"We all know that Huawei is a leading supplier in the 5G technology, so losses are inevitable if Huawei is not chosen as a co-operation partner."
Canadian security agencies are still reviewing the security and technical issues surrounding the potential involvement of Huawei and other companies in new 5G networks for smartphones and other wireless communication devices.
That decision has become more politically charged since the RCMP arrested Huawei executive Meng Wanzhou in Vancouver on Dec. 1 at the request of the United States.
Meng's arrest has infuriated China, which has since detained two Canadians, plunging Canada-China diplomatic relations to a new low. Michael Kovrig, a diplomat on leave to work for a non-governmental organization, and Michael Spavor, an entrepreneur, were arrested on vague allegations of endangering Chinese the national security. A third Canadian, Robert Lloyd Schellenberg, received a death sentence last week for a previous drug-smuggling conviction, a harsher penalty than the 15 years of imprisonment he'd already been given.
Also on Monday, 140 international China experts -- including five former Canadian ambassadors -- urged President Xi Jinping to free Kovrig and Spavor in an open letter. The letter praises the two men as bridge-builders between China and the world, and said their detentions will make the writers "more cautious" about travelling to China.
"Kovrig and Spavor's detentions send a message that this kind of constructive work is unwelcome and even risky in China," the letter says. "That will lead to less dialogue and greater distrust, and undermine efforts to manage disagreements and identify common ground. Both China and the rest of the world will be worse off as a result."
David Mulroney, Canada's ambassador to China between 2009 and 2012, was one the signatories and said the letter is significant because it shows the international breadth of support for the two men.
"This isn't simply a Canada-China dispute," said Mulroney. "A lot of serious people, including many who have spent years working in China, are worried about how it is closing itself off, and punishing those who seek to understand and interpret it for others."
Hua said that Kovrig and Spavor were arrested as part of "compulsory measures by relevant Chinese departments in accordance with the law for their involvement in activities undermining China's national security."
Hua added that foreigners visiting China are not broadly at risk. "As long as they abide by Chinese laws and regulations, there is nothing to worry about."
Goodale said while "some people" have linked the detainee issue with the government's decision on Huawei, national security will determine which companies' products will be used to build the country's new 5G network. But he offered no timeline.
"We will make the best decision for Canada and we will not compromise security," said Goodale. "It's an ongoing exercise and it's exceedingly complicated. This is technology the world has never had before."
Huawei has become the world's biggest supplier of equipment used by phone and internet companies. But the company has faced widespread allegations that is it is an espionage organ of the Chinese military and security services -- a charge the company strongly denies.