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Chinese telecommunications company Huawei recently unveiled its new P9 smartphone, and as a recent Wired headline states, “Huawei just copied the iPhone—down to the last screw.”
Incidents like this aren’t anything new when it comes to Chinese tech companies. Epoch Times noted back in 2014 that Chinese company Xiaomi had built its entire brand around copying Apple, right down to its CEO dressing like Steve Jobs during product events.
The recent development does, however, highlight an important issue.
Just a few months ago, U.S. leaders were adamant about stopping the Chinese regime’s use of cyberattacks to steal information from U.S. companies. This led to the agreement, announced by President Barack Obama and Chinese leader Xi Jinping, on Sept. 25, 2015, to end the use of cyberattacks for economic theft.
Obama stated, at the time, “We’ve agreed that neither the U.S. or the Chinese government will conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information for commercial advantage.”
There is mixed reporting on how effective the agreement was. A “60 Minutes” segment on Jan. 17 noted that the day after the announcement, Chinese cyberattacks on U.S. businesses continued as usual. Cybersecurity company FireEye claimed the agreement did reduce the number of Chinese cyberattacks on U.S. companies, but its claims are also contested by other cyber researchers.
As I mentioned in an article around that time, however, the key problem with the cyber agreement is that it only addressed cyberattacks used for economic theft, and it only addressed economic theft conducted through cyber.
In other words, the agreement does nothing to stop cyberattacks used for intelligence gathering. This means the Chinese cyberattacks on the Office of Personnel Management, which stole 21.5 million records on current and former U.S. federal employees, falls outside the program.
And just as importantly, the agreement does nothing to stop Chinese economic theft using methods other than cyberespionage.
That last part is important. The part that’s often overlooked in China’s use of cyberattacks for economic theft, is that cyber is merely one of many tools the Chinese regime uses for theft of information, and all its tools are in turn just extensions of a system being directed by Chinese policy.
The Chinese regime still has a large focus on using conventional spies to steal information. Over the course of just three weeks in April, there were four cases of alleged Chinese spies targeting the United States.
Even this month, there has already been one case of an individual conducting what resembles espionage on behalf of the Chinese regime. A former U.S. Army contractor was sentenced to six months in home confinement for lying on his security clearance form by concealing that he formerly served in the Chinese People’s Liberation Army. The individual had also violated security protocols by connecting a USB drive to a computer on the Army network, then trying to cover his tracks.
MORE:Canada Says Huawei Employees May Be Spies, Rejects Immigration Applications
The fact is, the Chinese Communist Party has a vast system for stealing information from the United States and from U.S. businesses.
Its other methods include its use of vast networks of student spies, its use of academic research partnerships, its use of front organizations including Chinese hometown associations, its use of business partnerships around research, and its use of inviting foreign experts on key topics to visit China and either present or cooperate on research around their expertise.
Then, there are Chinese “grey markets,” where Chinese factories that manufacture foreign goods simply do additional production runs, so they can make and sell the products themselves.
Stopping the cyberattacks won’t stop the problem. Cyber certainly makes it easier for the Chinese regime to steal products and designs, but again, they have plenty of other tools at their disposal.
Think of cyber as just one head of a hydra. You can cut off the head, but two heads will grow back in its place. With the Chinese regime, if cyber is removed from the equation of economic theft, it will simply find other, more effective means.
Yet, just like the mythical hydra, the way to stop this system is to stop swinging at the appendages, and go straight for the heart—and for the Chinese regime, the heart of these programs are its internal policies and facilities for stealing and copying foreign technology.
MORE:Faced With Barrage of Chinese Spies, US Expands Rules for National Security Cases
Its policies for economic theft include Project 863, the Torch Program, the 973 Program, and the 211 Program. It also has a vast system of centers designed to reverse-engineer stolen technology, known as China’s National Technology Transfer Centers or National Demonstration Organizations.
With recent U.S. efforts to stop the Chinese regime’s use of economic theft, the question shouldn’t be whether the cyberattacks stopped. The questions should be whether the Chinese regime ended its policies that guide economic theft, and whether it closed its facilities dedicated to copying stolen technology. The answer so far to both of these questions is a simple “no.”

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The Canadian consulate in Hong Kong allegedly rejected the immigration requests of two Huawei employees, citing “reasonable grounds” that they may be spies.
The reasons for the rejections were outlined in two letters, obtained by the South China Morning Post.
A letter from Canada’s Hong Kong consulate in March states the immigration application was rejected on ground the individual falls under section 34(1)(f) of the Immigration and Refugee Protection Act. The section refers to people employed by organizations involved in subversion, terrorism, or espionage.
The second rejection letter, sent in April, cited the same concerns over an individual’s spouse.
South China Morning Post did not release names of the alleged spies, but the piece is slanted in their defense. The Hong Kong-based news outlet has for years been growing closer to the Chinese regime, but came under more direct influence after its purchase by Alibaba CEO Jack Ma in December 2015.
The Canadian consulate in Hong Kong did not immediately respond to an email inquiring about the claims.
Huawei is a Chinese telecommunications company which has been accused of spying on behalf of the Chinese Communist Party. The U.S. House Intelligence Committee listed the company in 2012 as a national security threat, and it has since been accused of launching cyberattacks and placing backdoors in its products.
MORE:Faced With Barrage of Chinese Spies, US Expands Rules for National Security Cases
Australia blocked Huawei from bidding on its national broadband plan in 2012, and the United States also banned it from bidding on government contracts.
Despite the concerns, Huawei was able to find a market in Canada, according to Bloomberg in 2014, where it supplies 3G and 4G network equipment to two of the country’s largest cellular operators, Bell Canada and Telus.
Its relationship with Canada has been lined with caution, however. Vice obtained two memos in 2014 from Canada’s Department of Public Safety, stating concerns it could threaten the country’s telecommunications infrastructure and networks.

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If you’re looking to pick up a phone or laptop made by a Chinese company, be sure to read the fine print in the terms of service. You may be putting yourself at the mercy of Chinese law.
The policies may give a glimpse of what’s to come, as the Chinese regime has passed new laws requiring it to enforce its brand of “national security” abroad.
If you’re using a Xiaomi smartphone, for example, it’s likely you’ve unwittingly agreed “to bear all the risks and take full legal liability” to not engage in activities the Chinese regime has banned.
According to the fine print, you’ve actually limited yourself quite a bit.
First and foremost, it bans you from opposing the principles of the Constitution of the People’s Republic of China. You’re also not allowed to leak state secrets or subvert the government.
If you believe in a free Tibet, an independent Taiwan, or a democratic Hong Kong, you’re violating Xiaomi’s user agreement, since it forbids you from “undermining national unity.”
Also be careful if you’re spiritual or believe in religion.
The agreement says you have to follow the Chinese regime’s rules on suppression of religion, and you can no longer undermine its “national religious policy.”
If you write about Tibetan Buddhism or House Christians, you may violate its rules on what the Chinese regime calls “cults.” You also can’t write about any beliefs it calls “superstitions.”
When it comes to news and politics, the agreement forbids you from “spreading rumors.” When discussing news, that usually means you’re not allowed to say things that don’t align with the state-approved lines of the Chinese regime’s official mouthpiece news outlets.
You’ve also given Xiaomi the “right to access” your account.
Xiaomi isn’t alone in these requirements, either. Chinese tech firms including Huawei, Foream, Condenatcenter, Adbox, and Decathlon have similar user agreements.
There are a few differences in each. With Decathlon, for example, you’re not allowed to spread anything that could “damage the reputation of government organizations.”
The text in the agreements has actually been there for some time. According to archives of the Xiaomi website, the parts banning discussion on “cults” and “superstition,” and the requirements to abide by the Chinese regime’s constitution were added in October 2014.
What’s concerning, however, is what these existing standards mean for new binding laws on foreign technology companies that do business in China, and new laws for exporting Chinese “national security” abroad.
German writer Christoph Rehage may be among the first foreign victims of these policies. In December, he uploaded a YouTube video that called the founder of the Chinese Communist Party, May Zedong, “China’s Hitler.”
A Communist Youth League website is now calling for Rehage to be punished for violating Chinese law, even though he lives in Hamburg. They argue that Rehage, who speaks Chinese, made the video to circulate in China, which they say undermines the sovereignty of its Internet.
While it’s unlikely Rehage will be extradited, threats such as this are becoming more than just angry rants.
Recently, a Hong Kong-based editor who writes gossip books about Chinese leaders disappeared along with four of his colleagues.
This could tie to a shift in Chinese policy. It began on July 1, 2015, when the National People’s Congress (NPC) Standing Committee passed the “National Security Law.”
The new law emphasizes that “China must defend its national security interests everywhere,” and according to The Diplomat, “will affect almost every domain of public life in China—the law’s mandate covers politics, the military, finance, religion, cyberspace, and even ideology and religion.”
Alongside the National Security law was another, which was passed on Dec. 27, 2015, called the “Counterterrorism Law.”
The Counterterrorism Law has been particularly contentious since it requires foreign tech firms to cooperate with the Chinese regime’s investigations—and its brand of “counterterrorism” is far different from that in the West.
As The Diplomat notes, the CCP has its own definition of terrorism, which includes “any thought, speech, or activity that, by means of violence, sabotage, or threat, aims to generate social panic, influence national policy-making, create ethnic hatred, subvert state power, or split the state.”
In other words, on one extreme it does include terrorism—but on the other extreme it also makes “thought” and “speech” illegal, if those thoughts or words challenge the CCP’s rule.
Any company that wants to do business in China will need to uphold these rules. The Chinese regime’s policy is still in its budding phase, but if the user agreements of Chinese companies tell us anything, it’s possible we may all soon be required to follow its standards on totalitarian rule or, as Xiaomi’s warning states, “bear all the risks and take full legal liability.”
Additional reporting by Eyal Levinter.

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