Huawei Ramps Up Investment in Canada as CFO Awaits Extradition

(Bloomberg) -- Huawei Technologies Co. is pledging to add to its Canadian workforce and invest in new research even as the Chinese technology giant remains caught in the middle of a diplomatic feud over the arrest of its finance chief on Canadian soil.

Eric Li, president of Huawei’s Canadian unit, announced the measures Thursday in Toronto, where he was joined by Chairman Liang Hua. Huawei pledged to add 200 new research and development jobs, a 20 percent increase, and boost annual research spending in Canada by about C$25 million ($19 million). It will also ensure that intellectual property “generated in collaboration with Canadian institutions remains in the country,” according to a statement.

The measures appear aimed at soothing Canadian fears over Chinese government influence in Huawei, as Chief Financial Officer Meng Wanzhou remains under house arrest in Vancouver after being detained in December. Canada must decide by March 1 whether to grant the U.S. request to begin extradition proceedings against Meng. Prime Minister Justin Trudeau’s government is also weighing whether to ban the telecommunications firm from the country’s 5G network roll out.

The U.S., New Zealand and Australia have all restricted or banned Huawei from 5G networks, putting pressure on Canada and the U.K. to do the same. The countries make up the so-called Five Eyes intelligence-sharing network. The U.K.’s cyber security chief said this week no decision has been made, but that the country “will not compromise on the improvements we need to see from Huawei.” Meanwhile, Germany has ruled out a Huawei ban.

Canada continues to review whether to ban Huawei, which already provides equipment to companies including Telus Corp. and BCE Inc. The government has said it will not “compromise” national security.

After Meng’s arrest, China seized two Canadians, Michael Kovrig and Michael Spavor, in national security investigations. Trudeau has called those detentions arbitrary, rallied international support and called for their release. Meng is free on bail and next due in court on March 6 in Vancouver.

To contact the reporter on this story: Josh Wingrove in Ottawa at jwingrove4@bloomberg.net

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net, Jacqueline Thorpe

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