Chinese Technology Companies in Cuba
Chinese Technology Companies in Cuba
The People’s Republic of China has a strong commercial presence in Latin America. The Asian giant is providing professional expertise and technology transfer while Latin American countries guarantee access to their natural resources. China has been particularly successful in securing oil from Venezuela by providing the Bolivarian country with components for its information technology infrastructure.
In recent years, Chinese technology enterprises have had a more open presence in Cuba- its largest trade partner in the Caribbean (1). Several Trade Fairs have been held in Havana with the participation of numerous Chinese companies offering products from kitchen appliances to sophisticated information technology equipment, which have substantial demand in Cuba. China, in turn, has benefited from heavy investments in the island’s nickel industry, agricultural products such as rice and sugar, and oil exploration. Through bilateral trade agreements, China has been expanding its sphere of influence.
Huawei and ZTE Corporation (Zhongxing Telecommunication Equipment) are two of the Chinese companies investing in Cuba. These two companies have been under rigorous investigation by the governments of Canada, United States, and Australia because of its equipment’s elevated vulnerability to cyber espionage.
Huawei is a Chinese telecommunications equipment and services company owned by Ren Zhengfei, a former military engineer in the People’s Liberation Army. Reportedly, Ren Zhengfei is the majority stock owner of Huawei but such information has never been confirmed since the company has not published information on its structure. This lack of transparency has led some to consider that the Chinese government is behind Huawei. Speculations have been further heightened since the Communist Party has an office in the company’s headquarters in Shenzhen, China (2). Ren Zhengfei, a member of the 12th Communist Congress, has denied such allegations. Yet in 2012, an investigation conducted by the US Permanent Select Committee on Intelligence concluded that Huawei did pose a national security threat to the United States (3). Similar conclusions have been reached by the governments of Australia and Canada. In 2012, the Australian federal government banned Huawei from bidding on the country’s National Broadband Network project (4). That same year, Canada’s Communication Security Establishment warned in a report about potential threats to Ottawa’s communication networks posed by Huawei (5). All investigations highlighted the vulnerability of Huawei’s telecommunication equipment to malicious software and hacking.
ZTE Corporation is another Chinese telecommunication giant that has been under investigation. Also, with headquarters in Shenzhen, China, it manufactures mobile phones, optical transmission and data telecommunication gear and software. ZTE Corporation was founded by a group of state owned enterprises linked to China’s Ministry of Aerospace Industry. In 1997 it was publicly listed in the Shenzhen stock exchange (6).
The US Permanent Select Committee on Intelligence conducted an investigation of the corporation. One particular issue not addressed by ZTE representatives, is the status of two of its major shareholders Xi’an Microelectronics and Aerospace Guangyu, both state owned enterprises, allegedly involved in sensitive technological research for the Chinese government and military. Also avoided were inquiries on the role of the Chinese Party Committee within the company. The US Permanent Select Committee on Intelligence concluded that ZTE Corporation could pose a security threat to the United States’ information technology infrastructure (7). In 2012, ZTE admitted a security patch in their ZTE Score smartphone sold in the US. The smartphone could be hacked and controlled remotely (8).
In 2010, a special report confirmed the ZTE sold espionage capable system to Telecommunication Corporation of Iran (TCI). TCI has a monopoly over Iran’s landlines and controls a large amount of internet traffic. Former telecommunication project manager in Iran, Mahmoud Tadjallimehr, explained that capabilities included the ability to intercept text messages, emails, web access, and locate users (9).
Both Chinese companies have commercial presence in Cuba and actively participate in conferences organized by the Ministry of Information and Communication (MIC). Among these conferences are the XIV Edition of “Converging Technologies: Integration and Independence” held in Havana in 2011, where Huawei was one of the sponsors, and the V International Symposium of Telecommunications, where both Huawei and ZTE Corporation actively participated. (10) Ramiro Valdes, Cuba’s Vice-President, Communist party member and former Minister of Information and Communication, position he held until 2011, is an avid supporter of restriction and censorship of information technologies. It is not a coincidence that Ramiro Valdes promotes the commercialization and application of Chinese software and equipment that can be used to monitor and be remotely accessed.
Cuba and China have been two amorous friends since the 1960’s when Cuba became the first country in the Caribbean and Latin America to normalize relations with the Asian nation. Since that time, both countries have promoted communist ideology and have cooperated and coordinated with each other at multilateral organizations and on the issue of human rights. China’s transfer of technology to Cuba does not necessarily benefit Cubans. Instead China seems to be equipping the island’s information technology infrastructure with systems that can potentially spy on Cubans. Perhaps, the People’s Republic of China is also equipping an anti-American leadership with sophisticated communication and network technology capable of cyber espionage 90 miles from our shores.
1) China and Cuba (Ministry of Foreign Affairs of the People’s Republic of China, 2011).
2) Julie Bort, “A Rare Look Inside Huawei, The Shadowy Chinese Tech Company Accused of Spying on America” (Business Insider, 2012).
3) Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE (Permanent Select Committee on Intelligence US House of Representatives, 2012).
4) Michael Danby, “Good Reason for Ban on Huawei” (The Australian, 2012).
5) Steve Merti, “Chinese Telecom Giants Huawei, ZTE May Be a Security Threat for Canada, US: Reports” (Yahoo News, 2012).
6) A Global Telecom Titan Called…ZTE? (Bloomberg Business Week Magazine, 2005).
7) Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE.
8) Jeremy Wagstaff and Lee Chyen Yee, “ZTE Confirms Security Hole in US Phone” (Reuters, 2012).
9) Steve Stecklow, “Special Report: Chinese Firm Helps Iran Spy on Citizens” (Reuters, 2012).
10) Informatica 2013 Website. (Minister of Information and Communication, 2013).
*Jennifer Hernandez is a Research Assistant at the Institute for Cuban & Cuban-American Studies, University of Miami.