The Executive Yuan is compiling a list of Chinese firms whose products may not be used by government agencies. It is long overdue.
While governments worldwide have been grappling with whether to allow Huawei Technologies’ or ZTE Corp’s products to be used in their nascent 5G networks due to concerns about cybersecurity and the firms’ ties to the Chinese government, Taiwan has more reason than most to be wary, given the animosity of its cross-strait neighbor.
Chinese Premier Li Keqiang (李克強) in April decried international concerns about Huawei and other Chinese firms, telling EU leaders that Beijing has never urged companies to steal data or engage in espionage.
Cynics might find such statements disingenuous, as in China such “urging” is not needed. After all, since the turn of the century, by law all private-sector Chinese firms that employ at least three Chinese Communist Party (CCP) members have to establish a party cell. It is common for senior corporate executives to double as leaders of the CCP organizations in their companies.
As several experts have noted, these companies and their leaders are not just trying to follow Chinese law, they want to ensure connections with government officials and prove their loyalty to the CCP to protect themselves from political threats, such as an ongoing anti-corruption campaign that has toppled many ranking CCP and government officials, as well as business leaders and tycoons. The Chinese government “not urging” is like its police or security agents inviting dissidents and activists “to drink tea” — everyone knows what is meant without having to spell it out.
Another firm that is expected to be on the Executive Yuan’s list is Hangzhou Hikvision Digital Technology Co, reportedly the world’s largest maker of surveillance equipment and which the Financial Times has said is 42 percent owned by the Chinese government.
Some Hikvision cameras have been found in Taichung, leading the city government to say on Thursday that they would be removed in the next few days.
Hikvision was a specific target of provisions in the US National Defense Authorization Act for fiscal year 2019, which takes effect next month, banning US federal agencies from buying equipment from it, Huawei and two other Chinese companies. Security concerns were among the reasons cited for barring Hikvision, whose cameras are used at US military bases, embassies and by many city police departments.
Security is certainly a valid reason for not buying Hikvision products, which have made inroads globally due to their comparatively cheap prices, but there is another reason: pushing back against a firm that has made a fortune over the past few years off the repression and torture of Uighurs and other Turkic or Muslim minorities in Xinjiang. While Hikvision products are used across China, Agence France-Presse in June last year reported that the firm in 2017 alone had won at least five security-related deals in Xinjiang worth 1.85 billion yuan (US$269 million at the current exchange rate), including a “social prevention and control system” with tens of thousands of cameras.
World governments’ protests to Beijing about its concentration camps in Xinjiang have fallen on deaf ears, but they could do more to ensure that Chinese firms that profit from such misery will not get more money from them. The difficulty, as the Financial Times reported on Thursday, is that many international brands have “white-label” deals with Hikvision, allowing them to sell its products under their own names.
If the Executive Yuan wants its list of barred Chinese products to be effective, it needs to be very specific and ensure that items made by the targeted firms, but resold by other brands, are also included. Otherwise, price will trump security, as Taichung’s example shows. Even though the city had banned Chinese brand cameras, officials said the contractor that installed the Hikvision cameras had not paid attention to the origin or manufacturer of the devices.
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