Written by: Xiaoming Guo

On May 3, 2023, the Toronto Star reported that the University of Waterloo (UW) in Ontario, Canada, is expected to end its cooperation with Huawei. UW researchers will be allowed to complete existing research projects with Huawei.

How will ending new research cooperation with Huawei hurt the University of Waterloo?

Huawei is one of the world’s leading technology companies, with a strong reputation for innovation. The company has invested heavily in research and development, and it has established itself as a leader in areas such as 5G networks, artificial intelligence, cloud computing, and mobile devices.

The Waterloo-Huawei Joint Innovation Lab has funded 34 research projects involving more than 30 faculty members and provided training and funding for 220 students and post-doctoral researchers. 26 research projects are still ongoing.

The cooperation is beneficial to both Huawei and the University of Waterloo. Because of its leadership position of Huawei in technology, the cooperation keeps the University of Waterloo at the front end of technology innovation. Ending the cooperation hurts the academic position of the University of Waterloo.

Canadian security agencies have flagged Huawei as a serious security risk for its extensive ties to the Chinese government. This is a false allegation, as Huawei is not a state-owned enterprise. Huawei is an employee-owned enterprise. Its only tie to the Chinese government is that it is a China-based enterprise.

The Canadian Security Intelligence Service (CSIS) has been worrying about this joint academic research program advancing China’s economic and military position. The ending of UW-Huawei cooperation is the result of the interference of national intelligence. Science and technology should be value-free. Science thrives on collaboration and the exchange of ideas. When researchers adopt a neutral stance, it facilitates collaboration among scientists with diverse backgrounds, perspectives, and beliefs. A neutral environment allows for constructive debates, critical evaluation of evidence, and collective progress in understanding the world. The advancement of science and technology may be used for the economy or military, but that is out of the researcher’s control and not what researchers must be concerned about. Scholars, researchers, and academics should be able to conduct their work without fear of censorship, intimidation, or interference from government, institutional, or other external forces.

UW initially reminded its researchers that they weren’t obligated to speak with CSIS, showing the slightest bit of resistance to the fearmongering around research cooperation with China-based organizations. However, that tiny resistance fell apart relatively quickly. UW ending its cooperation with Huawei under the pressure of geopolitics not only hurts its academic position but also damages its environment of academic freedom. The principle of academic freedom is vital for a research-intensive university such as UW. Tamer Ozsu, founding director of the Waterloo-Huawei Joint Innovation Lab, said:

“Allowing intelligence agencies to determine or influence an academic institution’s policies is unwise and dangerous”.

Huawei has been targeted for many years by the US not because it did anything wrong. Rather, it is assumed that Huawei may work for the Chinese government in the future. This kind of attack violates the principle of the rule of law. The law should be applied to behaviors, not to assumptions. We cannot detain all the drivers because every driver is capable of driving a car into a crowd. Canada yields to the US’ hegemony and has done the US' bidding by banning Huawei. This damaged the rule of law in Canada.

When Canada arrested Meng Wanzhou at the US' request, we lost our judicial sovereignty. Our law and judicial system lost any remaining esteem and dignity because of the enforcing regulation and laws based on assumptions. Since the new cold war against China, violent crimes have increased in our society. The increasing crimes are driven by worsening economic conditions, which drive desperation, rage and anger, which spills out into the public, and reduced respect for our laws. Both worsening economic conditions and reduced credibility of our judicial system are the results of the new cold war. Banning Huawei in Canada, together with other witch hunts of "China threats", is destroying our rule of law and any remaining democracy in Canada. Without the rule of law, democracy degrades to anarchy. We witness the increasing chaos in our society.

Foolish fears about China sabotage Canadian companies

UW ended cooperation with Huawei based on Canada's mandatory risk-assessment framework for university researchers, safeguarding intellectual properties from “authoritarian” states. This crying wolf of "China IP theft" in the last decades has deindustrialized the Canadian economy. BlackBerry is the originator of the smartphone. BlackBerry hesitated to enter the China market because of the crying wolf of "IP theft" and now Canada is out of the smartphone industry. We are using Apple and Samsung, as they are all in the China market and make strong profits in China. The economic benefit from doing business in China can’t be underestimated.

Intellectual property (IP) is an intangible asset, the use of the asset does not reduce its value. Producing one BlackBerry phone does not make the second BlackBerry phone inferior or less valuable. The value of IP is in its use. The more you use your IP, the more valuable it is. BlackBerry restraining themselves Canada from the China market reduced the value of BlackBerry’s IP. BlackBerry is out of the smartphone business because of its broken cash flow.

When IP cannot be utilised in markets, its value is zero. All the top international brands are in the China market: Apple, GE, Microsoft, Intel, Tesla, Ford, Toyota, you name it. Not to mention Walmart and Ikea which source from China.

Canadian education, and science is stronger than South Korea. Yet Kia and Hyundai cars are running on our streets and Samsung technology is in every household. Why can’t we compete with South Korea? Modern high-tech products are a knowledge-intensive industry and knowledge-intensive industry depends on the economy of scale. The same Research and Development (R&D) investment will have a higher return with a larger market, meaning that no international brand can ignore the China market. Banning Huawei comes from the same policy of refusing to go into the China market. Banning Huawei comes with export controls on "sensitive technology" that killed Blackberry.

Canadian deindustrialization is the result of isolating our technology from the China market. Refusing the China market even killed Canadian corporate ownership of Tim Hortons. Tim Hortons never went to China until after it was acquired by Burger King, which itself is owned by RBI Inc. Tim Hortons had been known as a point of pride for Canada, and now it has become a foreign chain.

Intellectual property becomes obsolete quickly because of the speed of technological advancement. If we keep it from hitting the market, its value diminishes rapidly. When we are using a 4G cell phone, the 3G IP is made obsolete. Canada is probably the only G7 country without a decent international telecommunications brand based here. We have one big Canada-based company, Canada Goose, that does well mainly because it has entered the China market. Not only do we have few international brands, but we are also losing our national brands such as Quaker and Tim Hortons. Our government thinks we can suppress China by decoupling our economy from China. But this geopolitical maneuver is futile. It only hurts our economy. Canadians suffer inflation largely due to our new cold war against China.

Paranoia about Huawei leads Canada to be left out of fourth industrial revolution

One of the concerns pushed by CSIS is that Huawei must obey the Chinese government’s requests, and the Chinese government may ask Huawei for data on our communication. Yet this is a practice many of Canada’s allies do. As Edward Snowden leaked, the United States’ National Security Agency (NSA) has a program code-named Prism collecting Internet data cooperated by hundred of US companies. Every company obeys the law and regulations of the country it operates, and domestic companies cooperating with the government is an international practice. The US is the number one country that pressures US companies to cooperate with them in spy and military operations. StarLink had operated in the Ukraine War for the US government. We all know there is a Big Brother collecting our data daily. When we are online, we are transparent to the US surveillance apparatus perpetrated by many communication companies. The sin of Huawei is that it does not cooperate with the US government.

So far, Huawei has never gotten any requests from the Chinese government to collect data, and the Chinese government has not requested Huawei to collect data for spying and military usage. It is just a warning; an assumption and the assumption is based on the facts of what the US has been doing. Yet Canada never ban those companies that keep backdoors for intelligence of some countries. The problem with Huawei is that it created a blind spot in the US surveillance programs. For example, the US tapped Angela Merkel's phone. Should Merkel have used a Huawei phone, the US would have been unable to tap her phone.

China has long been the target of the US surveillance. In 2001, a US EP-3 spy airplane crashed into a Chinese fighter jet and landed in Hainan, China. NSA has backdoors in Microsoft Windows so it can collect data from any computer using Windows. The US is the largest culprit contaminating the communication industry with spyware and constantly engages in cyberwarfare. The human future should not be trapped in perpetual conflicts. For the peace of the world, we should not ban Huawei and pressure universities to end research cooperation with Huawei, on assumption. Building a world community with a shared future for mankind is the best and ultimate solution to eliminate spy wars and surveillance.

Canada has banned Huawei equipment and other Chinese communication companies from entering our market. This betrays the Western idea of a free market. Reducing market competition is the main cause of the high communication costs in Canada. The cell phone plan prices in Canada are the highest in the world and without market competition, consumers are paying high prices. The high communication cost not only hurts consumers but also hurts our economy. The world is undergoing the fourth industrial revolution. This industrial revolution. which depends on communication infrastructure. Banning Huawei and ZTE 5G equipment definitely will delay the 5G network deployments in Canada, delaying us from joining this industrial revolution. Canada’s present foreign policy is to maintain the US technology monopoly at the expense of our national interest.

The US pushes deglobalization to protect its interests

About two and a half centuries ago, Adam Smith published his work The Wealth of Nations. He laid the cornerstone of economics. Adam Smith concluded that the division of labor advances the economy. At the end of the last century, we had the information revolution. The information revolution enabled the division of labor on a world scale: globalization. During globalization in the last two decades, humans are living in a world village, trade increased in volume and in semi-finished goods. The high-tech advancement is largely enabled by globalization. Division of labor increased productivity and improved our living standard. When Trump was president, the US began a foreign policy of isolationism and protectionism. Biden continues Trump's protectionism.

The US protectionism policy deglobalized the world economy, while it tries to kick China out of the world supply chains. This reduced, in turn, the division of labor in the world economy and the productivity of the world. The US is now against globalization that they have promoted for many decades. The reason? Globalization benefits China.

The US deglobalization is modern Luddism: it is against economic advancement because the advancement benefits the world including China. We have abundant resources and our technology is advancing. We should expect to have a life better and better continuously improving life. Yet the Canadian experience tells us otherwise: we suffer inflation, increasing government debt, and reduced affordability of housing. When productivity decreased, living standards decrease too. Our worsening economic situation is largely due to the new cold war against China. UW ending cooperation with Huawei is just part of the new cold war.

The US is the true threat to Canada

China is not a threat to us, but. The US hegemony is a threat to us. The US put a 300 per cent tariff on Bombardier jets and killed our most advanced manufacturing. The US put a 300 per cent tariff on Bombardier jets based on the claim that it got “illegal subsidies” from the Canadian government. This year, the Canadian governments gave Volkswagen $13 billion CAD to build a lithium battery factory in St Thomas, Ontario. By the time the factory produces batteries, the US could put a 300 per cent tariff on Ontario lithium batteries too. The US protectionism is America First and is a threat to Canada’s economy.

Meanwhile, Chinese companies have had a positive track record of buying Canadian companies and keeping jobs in Canada: whether it was Han’s Laser Technology Industry Group purchasing CorActive High-Tech - a manufacturer of specialty optical fiber and fiber laser modules, or China’s O-Net Technologies purchasing ITF Technologies - a Montreal-based tech company. Who’s the real threat, when you look deeper than the mainstream media wants you to?

Self-sabotage will cause much pain

The University of Waterloo’s decision has prompted other Canadian universities to follow suit. UW was just the first of many to cut off any new research cooperation with Huawei. Toronto Star reporter Joanna Chiu reported that “Canada set to name foreign labs, universities that pose risk to national security”, while the “list will include foreign entities at ‘higher risk’ of engaging in research theft, unwanted knowledge transfers and interference”. Universities have already committed to avoid working with any of these supposedly dangerous entities. The initial self-sabotaging decision by University of Waterloo and the universities after it, will cause much pain for the US’ geopolitical benefit. The next step in self-sabotage will cost them up to “$100M in annual funding from foreign partners”; even more pain will be felt.

Research cooperation with Chinese organizations or businesses, even those which aren’t controlled by the Chinese state, could possibly become a thing of the past, based on current trends. This can now feasibly be seen to extend to any state the Canadian government doesn’t like.

Why did the University of Waterloo ends its cooperation with Huawei? Why did Canadian government ban Huawei equipment? Why does the Canadian government rejects China's mutual respect and win-win cooperation but embraces the America-First relationship? Certainly not in the best interest of the Canadian people, but instead at the US’ behest.

Canada’s national interest can be protected with an international relationship of mutual respect and win-win cooperation. Canadian national interests are damaged when our economy is just an attachment to the US economy. The ending of research cooperation between the University of Waterloo and Huawei is bad for Canadians as a whole.

Editor’s note: The Canada Files is the country's only news outlet focused on Canadian foreign policy. We've provided critical investigations & hard-hitting analysis on Canadian foreign policy since 2019, and need your support.
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Xiaoming Guo has a Ph.D. from McGill University and an MBA from Queen’s University. Guo is a Canadian who believes that a good relationship with China best serves our national interest.

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