China's Huawei soft power push raises hard questions

TORONTO -- Canada's national game -- brought to you by China's Huawei.

As a nasty diplomatic feud deepens between the two countries over the tech company, involving arrests and execution orders, it hasn't gone unnoticed that Huawei's bright red fan-shaped logo is plastered prominently on the set of "Hockey Night in Canada." TV hosts regularly remind the 1.8 million weekly viewers that program segments are "presented by Huawei smartphones."

The cheery corporate message contrasts with the standoff over the arrest of Huawei Chief Financial Officer Meng Wanzhou on a U.S. warrant. In what looks like retaliation, China detained two Canadians and plans to execute a third -- heavy-handed tactics that, because they leave some Canadians with the impression the privately owned company is an arm of the Chinese government, give its sponsorship a surreal quality.

The TV deal is one of many examples of how Huawei, the world's biggest telecom gear producer and one of the top smartphone makers, has embarked on a global push to win consumers and burnish its brand. It sponsors Australian rugby, funds research at universities around the world, and brings foreign students to China for technical training. It has promoted classical music concerts in Europe and donated pianos to New Zealand schools.

Its efforts are now threatened by the dispute with Canada and U.S. accusations that it could help China's authoritarian government spy on people around the world.

"Huawei's marketing plan up until Dec. 1 (when Meng was arrested) was working very well," said Guy Saint-Jacques, a former Canadian ambassador to China. Now, "public opinion is changing toward China and Huawei."

At stake for Huawei are lucrative contracts to provide new superfast mobile networks called 5G. The U.S. says Meng helped break sanctions and accuses Huawei of stealing trade secrets. It also says the company could let the Chinese government tap its networks, which in the case of 5G would cover massive amounts of consumer data worldwide.

Huawei, which did not respond to requests for comment for this story, has previously rejected the allegations. The Chinese government says Huawei's critics were fabricating threats.

Still, the headlines have been relentlessly negative.

"At some point there could be a majority of Canadians that will say 'We don't think the government should do business with Huawei,'" Saint-Jacques said.

There's no evidence of sinister intentions behind Huawei's marketing, which isn't unlike that of Western multinationals, although its efforts have been unusually strong for a company from China, where brands have struggled to capture global attention.

Rogers Communications, which broadcasts "Hockey in Night in Canada" and also sells Huawei smartphones, said it has no plans to change its sponsorship deal, which started in 2017 and runs to the end of 2020.

In Australia, the Canberra Raiders rugby team indicated it would renew a Huawei sponsorship deal this year despite a government ban on using its equipment in 5G networks.

Huawei has also ventured into high culture by using its smartphone artificial intelligence to complete the remaining movements in German composer Franz Schubert's "Symphony No. 8," known as the "Unfinished Symphony." It held a symphony orchestra concert in London this month to perform the completed score.

And Huawei has a vast network of relationships with universities around the world through research partnerships and scholarships. It has helped fund a 25 million pound ($32 million) joint research project at Britain's Cambridge University.

Some universities have begun to rethink their collaborations, although there's no allegation of wrongdoing by Huawei. Universities point out that companies that fund research don't automatically own any resulting patents.

Britain's Oxford University stopped accepting Huawei's money last month. Stanford University followed suit after U.S. prosecutors unsealed nearly two dozen charges against the company, as did the University of California at Berkeley, which also removed an off-campus videoconferencing set-up donated by Huawei based on guidance from the Department of Defense.

Faced with these setbacks, Huawei has responded by stepping up its public relations efforts.

Its normally reclusive chairman, Ren Zhengfei, last month held three media briefings, fielding questions from Western, Japanese and Chinese journalists.

The company will be out in force this month at the Mobile World Congress, a major telecom industry gathering in Barcelona, Spain. It's expected to unveil its latest smartphone, a 5G device with a folding screen. Company executives are scheduled to brief analysts and give presentations on 5G technology.

Huawei is a corporate sponsor of the show and Ren is expected to attend to help win business deals, though U.S. officials are reportedly expected to turn out in force to lobby against Huawei.

The company last week hosted a Lunar New Year reception in Brussels for the European Union diplomatic community, in a ballroom commissioned by Belgium's King Leopold II. There was a piano concert, a jazz performance, a bubble tea bar and a speech by Huawei's chief EU representative, Abraham Liu.

"We are shocked or sometimes feel amused by those ungrounded and senseless allegations," Liu told the reception guests, adding that the company is "willing to accept the supervision" from governments in Europe, Huawei's biggest market after China. Huawei plans to open a cybersecurity center in Brussels next month, he said.

To attract top talent, Huawei runs a program called "Seeds for the Future," under which it sends students from more than 100 countries to China to study Mandarin and get technical training at its headquarters.

Shanthi Kalathil, director of the National Endowment for Democracy's International Forum for Democratic Studies, sees Huawei's charm offensive dovetailing with broader efforts by China to influence the global debate on the government's surveillance and censorship it uses.

"It's not like an afterthought. That is the foundation of the entire system," she said.

Whether or not Huawei is linked to the Chinese government or merely defended as a corporate champion, the fight over the company shows how world powers see technology as the front line in the fight for economic supremacy.

"Today's innovation economy is based on IP (intellectual property) and data," said Jim Balsillie, the former chairman and co-CEO of BlackBerry-maker Research in Motion. "So soft power is the best tool for advancing national interests because the battle is not about armies and tanks."