Japan joins US in banning China's Huawei 5G

Sam Nussey, Makiko Yamazaki
Reuters
Mon, 10 Dec 2018 16:18 UTC

© Reuters / Aly Song

Japan's big three telecom operators plan not to use current equipment and upcoming fifth-generation (5G) gear from China's Huawei Technologies Co Ltd [HWT.UL] and ZTE Corp (0763.HK) (000063.SZ), Kyodo News reported on Monday.

The news, for which Kyodo did not cite sources, comes at a time of heightened scrutiny of Chinese tech firms by Washington and some prominent allies over ties to the Chinese government, driven by concerns they could be used by Beijing for spying. Last week sources told Reuters that Japan planned to ban government purchases of equipment from Huawei and ZTE to ensure strength in its defences against intelligence leaks and cyber attacks.

Comment: That is just a cover story for public consumption:

The U.S. spy services and military do not like Huawei. They can no longer easily hack the equipment it sells. Convincing Cisco or some other U.S. company to leave back doors in their equipment is quite simple. One can always threaten the management or board of these companies with some tax investigation or over other shady activities. That is not so easy when the company is hosted in China. It requires the NSA and others to use more expensive efforts to reach their aim:

The National Security Agency breached Huawei servers years ago in an effort to investigate its operations and its ties to Chinese security agencies and the military, and to create back doors so the National Security Agency could roam in networks around the globe wherever Huawei equipment was used.

The U.S. is lobbying various countries not to use Huawei equipment. It claims that the Chinese government could use it for spying. That thought was obviously born when the U.S. spies looked at what they are doing themselves. Australia, New Zealand and Japan already agreed to keep Huawei out. Today the EU tech commissioner Andrus Ansip also warned of using Huawei. Ansip was previously the prime minister of the U.S. protectorate of Estonia. He is known to be a U.S. mole and is not taken too seriously:

Germany, meanwhile, said it opposed excluding any manufacturers from the planned construction of 5G mobile networks.

A SoftBank Group Corp (9984.T) spokesman said Japan's third-largest telco was closely watching government policy and is continuing to consider its options. The amount of equipment in use from Chinese makers "is relatively small", he said.

Japan's top two telecommunications operators, NTT Docomo Inc (9437.T) and KDDI Corp (9433.T), said the firms had not made any decision yet.

Docomo does not use Huawei or ZTE network equipment, but it has partnered with Huawei on 5G trials. KDDI also does not use Huawei equipment in its "core" network, a spokeswoman said, adding it does not use any ZTE network equipment.

Asked to comment on the report, Huawei referred to a Japanese government policy document issued on Monday concerning cybersecurity during procurement. That document states the aim of a "free, fair and secure cyberspace".

Comment: Yeah, right. That simply does not exist. Ask the NSA.

"These are ambitions Huawei shares and we look forward to continuing to work closely with customers in the Japanese market," a Huawei spokesman said.

ZTE declined to comment on the report.

LOCKED OUT

Huawei has already been locked out of the U.S. market, and Australia and New Zealand have blocked it from building 5G networks amid concerns of its possible links with China's government. Huawei has said Beijing has no influence over it.

Japan's decision to keep it out would be another setback for Huawei, whose chief financial officer was recently arrested by Canadian officials for extradition to the United States.

Chinese Foreign Ministry spokesman Lu Kang said China has already had "communication" with Japan about the issue.

China has all along been asking Japan to provide an open, fair and non-discriminatory environment for Chinese companies operating in the country, and Beijing will continue to pay close attention to this issue, Lu told a daily news briefing.

"We believe that Chinese companies' normal operating activities should not be treated in a discriminatory way," he added.

World financial markets have been roiled since news of the arrest, on worries it could reignite a Sino-U.S. trade row that was only just showing signs of easing. Shares of SoftBank, which has the deepest relationship with Huawei among the big Japanese telcos, fell the most among the three top Japanese telcos on Monday, ending down 3.5 percent.

Industry sources said SoftBank would find it difficult to replace pre-existing Huawei network equipment that is designed for the company and not easily interchangeable. Docomo and KDDI shares fell around 1 percent, in a wider market .N225 that closed down 2 percent.

Earlier, SoftBank's Japanese telecoms unit priced its IPO at an indicated 1,500 yen ($13.31) per share and said it will sell an extra 160 million shares to meet solid demand, raising about $23.5 billion in Japan's biggest-ever IPO.

Comment: More on Meng's arrest by Moon of Alabama:

The December 1 arrest of Meng Wanzhou and a number of other incidents on that day gave raise to a number of interesting conspiracy theories in the Chinese web sphere (via Peter Lee, links added):

Red @OmeletteRed - 19:09 utc- 6 Dec 2018

A great explanation of the Huawei Kidnapping, written by a comrade in the Deng Gang Central discord. There may be a lot more than meets the eye in Canada's shock arrest, at US behest, of Huawei's CFO and heir apparent Meng Wanzhou (link below).

Chinese sources have assembled the following facts:

• April 2017: A director of Chinese tech giant Huawei personally escorted famed Shanghai-born physicist Zhang Shoucheng from the latter's hotel in Shenzhen. Jackson & Wood Professor of Physics at Stanford University, Zhang was in town to attend an IT summit.
• Sept. 2018: Prof. Zhang receives a European physics award, one of his many honors. His work in quantum physics is expected to revolutionize the global semiconductor industry. Yang Zhenning, the first Chinese scientist to receive the Nobel Physics Prize (1957), had predicted that Zhang would be the next one.
• Dec. 1, 2018: Prof. Zhang and Meng Wanzhou are expected to attend a dinner in Argentina, where the G20 summit is being held.
• Dec. 1, 2018: On her way there, Meng is arrested in transit by the Canadian government.
• Dec. 1, 2018: Prof. Zhang falls to his death from a building in the US, allegedly a suicide. Said to be suffering from depression, he was 55.
• Dec. 1, 2018: A nighttime fire breaks out at a factory of Holland's ASML, the world's leading manufacturer of extreme ultraviolet (EUV) lithography technology. EUV is crucial to the production of the next generation of semi-conductors, which US and Chinese tech firms as well as Korea's Samsung are competing to be first to bring to market. Leading Chinese semiconductor producer SMIC is known to have ordered EUV technology worth US$120 million from ASML, for scheduled delivery early in 2019. After the fire, ASML announced that it expected delays in shipments of its products, notably early 2019.

Prof. Zhang was also a venture capitalist. He was a founding partner of a Silicon Valley-based fund investing primarily in early-stage technologies. Danhua Capital, also known as Digital Horizon Capital, holds shares in Silicon's Valley's start-ups who work on artificial intelligence, cybersecurity, and drones. Danhua is backed by Zhongguancun Development Group, a state-owned entity funded by the Beijing municipal government. The company has come under scrutiny of the Committee on Foreign Investment in the United States (CFIUS) which suspects (pdf) that its purpose is to pilfer critical U.S. know how and to transfer it to China.

Zhang's family says that his death had nothing to do with U.S.-China tensions.

...U.S. allegations of sanction violations can always be made up from hot air. They are certainly not the real reason why Meng Wanzhou has come under fire. The White House even admitted such.

Meng Wanzhou was taken hostage to be used as leverage in China trade talks. The 'leverage' could also be used to push Huawei into providing the NSA with back doors to its equipment. This is the policy style of Somali pirates or Saudi clown princes. The ruthlessness of this blackmail operation is breath taking. It is typical of neo-conservative behavior to use such extreme measures. Trump's foreign policy is run by neo-conservatives and they are again, like when they faked intelligence to lay the grounds to invade Iraq, creating huge damage:

Melania was right when she told an interviewer in Africa that her husband is surrounded by enemies within his administration. These are people who either opposed him during the 2016 campaign season or who signed up early in the campaign with an expectation that they could get jobs in a Trump Administration and in both cases understood that a president not accustomed to thinking seriously about other than business hustle could be manipulated or deceived in pursuit of their own agenda rather than his or that of the "deplorables."

These people are the neocon incubi and succubi who seek an even more dominant hegemonic role in the world for the US. They are out and out imperialists of a kind not seen since the time of McKinley and the US-Filipino War.
...
Bolton, Pompeo, his new helpmate Mary Kissel, dozens and dozens of Obama globalist holdovers, and people who find Trump's boorish ways repulsive, they all are undermining the administration from within and Trump does nothing about it.
...
Is Trump competent in such matters as tax policy, regulatory reform and trade negotiations? I think he is, but he is allowing the neocons to destroy the possibility of rational political relations in Europe and the Middle East.

... and with China.