It was just a few years ago when Chinese technology megafirms ZTE and Huawei were on top of the world. They sold Android phones around the world and were major suppliers of 4G and 5G network equipment. Today, both forms have been widely sanctioned due to their ties with the Chinese government, and now Canada is joining with its allies in booting both companies from mobile networks. Telecom companies in Canada will no longer be able to purchase infrastructure from the companies, and they will have to remove what they have in the coming years.
Pressure on ZTE and Huawei ratcheted up early in the Trump years, but this is one policy that has carried onto the Biden administration. Large businesses in China are often tightly integrated with the Chinese government and intelligence service. There’s even a provision in the Chinese National Intelligence Law that can be used to require organizations and individuals to cooperate with the state’s intelligence agencies.
The US and the rest of the “Five Eyes” intelligence alliance claim that means China can force these companies to hand over user information and program backdoors for espionage. China claims this is a misunderstanding of its laws, but it’s not that dissimilar from mechanisms that exist in US law. For example, US companies cannot even reveal if they’ve received a National Security Letter from the government, which requires them to divulge information. The Five Eyes member states have all agreed to ban ZTE and Huawei equipment to prevent a similar scheme from harvesting data and delivering it to China.
Canada is the last of the Five Eyes members to take action. The US began requiring telecoms to remove Huawei and ZTE hardware several years ago, a process that is projected to cost billions of dollars. Australia and New Zealand acted shortly after the US, and the UK banned Huawei and ZTE equipment in 2020 with the aim of eliminating it entirely by 2027. In Canada, telecoms are now required to have all 5G networking equipment from ZTE and Huawei gone by June 28th, 2024. The timeline for older 4G infrastructure is a bit more lax, extending to the end of 2027.
Chinese networks BCE and Telus have reportedly been slowing their purchase of Huawei and ZTE equipment in anticipation of the ban, but there’s still a lot of hardware going in the dumpster. This is, apparently, the price of security.