Published:  12:52 PM, 09 June 2024

Disturbing ties to Beijing justify Canada’s shutdown of Tech Firms

Disturbing ties to Beijing justify Canada’s shutdown of Tech Firms Canadian Innovation Minister, Francois-Philippe total (photo: x @FP_Champagne)
The Canadian government's decisive action to shut down two British Columbia tech companies over national security risks linked to the Chinese Communist Party (CCP) was an absolutely justified and commendable move. The revelations about the concerning connections these firms had to Beijing's repressive regime underscore the necessity of democratic nations remaining vigilant against the CCP's relentless efforts to pilfer sensitive technologies and intellectual property from the free world.

Innovation Minister Francois-Philippe Champagne pulled no punches when he announced on May 24 that the companies, Bluvec Technologies Inc. and Pegauni Technology Inc., were ordered to "cease all operations in Canada" following a comprehensive review that found their activities threatened Canadian security interests. His stern statement signals just how serious the threats posed by these firms were deemed to be by Canadian intelligence agencies.

The most glaring red flag centered on Bluvec and its shady relationship with a Chinese company called Lizheng Technology. Court evidence showed Bluvec's founder and CEO Junfeng "Jack" Jia held an ownership stake in Lizheng, despite his attempts to distance himself from the mainland China-based firm during legal proceedings. Those legal battles stemmed from allegations that Bluvec stole confidential anti-drone technology from a Vancouver competitor called SkyCope Technologies, which it then incorporated into products sold to Lizheng.

A British Columbia Supreme Court judge sided with SkyCope in 2023, ruling that Bluvec did in fact misuse SkyCope's proprietary source codes and ordering Bluvec to pay $800,000 in damages for the blatant intellectual property violation perpetrated to benefit its CCP-linked Chinese partner Lizheng. This disturbing case of technology theft carried out on behalf of a mainland Chinese company alone represented a severe breach of laws and ethics that should have disqualified Bluvec from operating in Canada.

As for Pegauni Technology, its website has been inactive and there is little public information about specifics of its business beyond developing wireless security products. However, the fact that Canadian national security agencies identified severe enough risks to order this company's shutdown as well suggests it too had unacceptably close ties to the CCP regime that threatened to compromise Canadian security. While the full details are not public, we can infer from Pegauni's wireless tech focus that there were likely concerns its products could enable Chinese surveillance or cyber attacks if controlled by Beijing's proxies.

It's no secret that the CCP has made acquiring cutting-edge technologies from Western nations a top priority of its military-civil fusion doctrine, which essentializes even ostensibly private companies into Beijing's strategic competition with the free world. Corporate espionage, intellectual property theft, establishing co-opted regulatory frameworks, and coercing or co-opting executives at private firms have all been employed as tactics to secure technological gains that empower China's modernizing armed forces and economic juggernaut. The concerning links between Bluvec/Pegauni and entities beholden to the CCP regime appear to represent two more examples of such malign activity.

Canada is rightfully taking a hardline stance against potential CCP infiltration through screening and shutting down companies that pose severe national security risks. Last year, Ottawa took similar action by forcing three Chinese resource firms to divest ownership stakes in Canadian critical mineral industries over supply chain security fears. Shielding strategically-vital sectors from Beijing's grasp is prudent policy that democratic allies should emulate.

The free world simply cannot afford to turn a blind eye to the CCP's widespread efforts to undermine liberal democracies and reshape the global balance of power in its authoritarian image through technological supremacy. Far too many nations have already been burnt by Beijing's techno-mercantilism, intellectual property plundering, and co-optation of private companies to naively assume such firms have no ties to the CCP's repressive agenda. China has been following the same playbook for years. It acquires technology that has been developed by other nations, who have spent billions on it for a fraction of the cost through bribery and espionage. The world cannot let the CCP get away with its evil agenda.

Canada's decisive shutdown of Bluvec and Pegauni - companies with disturbing CCP linkages that made a mockery of Canadian laws - must be a wakeup call for the entire free world. Allowing corporations ensnared by Beijing's influence networks to operate with impunity is an unacceptable national security risk that democracies can ill afford. Guarding against the CCP's nefarious schemes to undermine our societies through technological supremacy must take precedence over commercial interests. The true cost of inaction is simply too high.
Pen & Ink by: A R M Deluar Hossain (Journalist)

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