By Marshall Wordsworth
The high-profile arrests of Huewei's CFO and Nissan's Chairman in the past several months, while they have made spectacular news headlines, the information presented to the general public by the media including the reasons for their apprehension barely scratches the surface of a much larger, more complex geopolitical ramifications that cannot be ignored.
Huawei Technologies, Co., Ltd., a global information and communications technology (ICT) solutions provider based in China, has become the world’s largest communications equipment manufacturer. With its products and services that span across 170 countries, Huawei was ranked 72nd in the Fortune Global 500 in 2018. Because of the sheer size and seemingly omnipresent nature of Huawei’s technology and products that include smartphones (surpassing Apple as a smartphone manufacturer last year), the threat of espionage and growing security concerns became serious issues in different parts of the world, not simply in the United States. In America, the U.S. House Intelligence Committee concluded in a report that Huawei along with ZTE, another Chinese multinational telecom equipment manufacturer, posed a “national security threat” on October 8, 2012. Since then, many allegations of espionage and business deals going astray owing to potential security issues continued in parts of Europe, Canada, United States, the Middle East, India, and even in Africa.
With the inauguration of Donald Trump in January of 2017, the eventual trade war between China was inevitable, and after a series of tariffs being placed on Chinese imports, from stainless steel to vacuum cleaners to coconuts, the issue of national security involving global corporations’ dominance in the marketplace became an even more sensitive and critical matter. Given such tensions that have engulfed international commerce, the apprehension of Meng Wanzhou, CFO and Vice Chairperson of Huawei in Vancouver, Canada at the request of the United States last December shouldn’t have been much of a surprise. On January 29, 2019, she was accused of violating U.S. sanctions against Iran, and formal charges of fraud, obstruction of justice, and theft of trade secrets were made against Huawei by the U.S. Dept. of Justice.
On the other side of the Pacific, the media’s attention was on Nissan Motor Co., Ltd., Japan’s longtime auto manufacturer that has competed with Toyota and Honda for generations and now part of the Renault-Nissan-Mitsubishi Alliance, a strategic partnership with Renault as the majority shareholder that has emerged as the top selling automotive group in the world. Carlos Ghosn, a Brazilian-born Lebanese educated in France, became CEO in 1999 and engineered an amazing comeback for Nissan that had been struggling to stay alive through cost-cutting, workforce reduction, modernizing production processes, and launching new models. He also spearheaded a much needed restructuring by implementing a “lean manufacturing” system, reforming work methods, and established a centralized R & D apparatus, all contributing to a more economical, cost-efficient enterprise. Together with Renault as a strategic partner, Nissan now shares over 70% of components utilized for auto manufacturing. Having established himself as a celebrity and legend not only in Japan but in the international business community, he stepped down as Nissan’s CEO in April of 2017 but remained its chairman.
His abrupt arrest on November 19, 2018 at Haneda Airport in Japan for alleged underreporting of his earnings and misuse of company assets shocked the entire world. Nissan and Mitsubishi’s board ousted him as chairman within days, and Ghosn himself resigned as Chairman and CEO of Renault on January 24, 2019.
The sensationalism of these very high-level executives being taken in by authorities for white-color crimes appear to have clouded, if not completely concealed the deeper, sophisticated geopolitical battles taking place. Zhang Shoucheng, renowned Chinese theoretical physicist at Stanford with numerous awards for his academic achievement, died unexpectedly on December 1, 2018, the exact day Huawei’s Meng Wanzhou was arrested in Canada. In fact, it has been noted that his sudden demise (which the police quickly ruled as a suicide) was only a few hours after Wanzhou’s apprehension. The talented scholar apparently had extensive contacts with venture capitalists including those in China, raising $434.5 million through his VC firm.
So far, news stories in the West covering Carlos Ghosn’s arrest and detention in Japan mainly highlight the nation’s rather unorthodox criminal justice system. Ghosn has been under Japanese police custody since November and was not allowed to retain an attorney for weeks. While Japan’s criminal procedure may warrant certain scrutiny, an actual apprehension of such a high-profile corporate figure could not have been possible without some behind-the-scenes maneuvering between governments of Japan and France, the latter where Ghosn is a citizen (Ghosn also holds citizenships in Brazil and Lebanon). This type of ‘backroom deal’ has been the prerequisite for an arrest that leads to criminal prosecution involving a foreign executive at a major firm, especially someone of Ghosn’s caliber, and chances are that this case was no exception.
Certain non-English sources have pointed out that Renault had been proceeding to eagerly work with China and its companies with Emmanuel Macron’s blessing. But Renault being part of the alliance with Nissan and Mitsubishi, any sizable investment for a joint project would have also entailed, politely stated, transfer of technology from the latter two Japanese corporations. Specifically, the possibility of sharing the know-how in robotics and weapons-capable technology, the areas where Nissan and Mitsubishi respectively are universally known to have an edge on, could have been given away and duplicated. In addition, certain technologies developed by NASA might have been stolen and duplicated as well via Nissan, for the two entities have been jointly working on self-driving cars (robotic cars). As China continues to boast its cheap labor that cannot be outdone by any other auto manufacturing hub on the planet, such ill-advised handing over of technology and know-how could result in the worst case scenario for America and Japan in due course.
Perhaps the true motivations and reasons for these cases may never be divulged in public, but rest assured whenever global corporate executives of such stature make news, particularly in criminal proceedings that seem to reflect existing tensions between the countries they represent if not their allies (Japan being the preeminent partner of America in the Pacific), most likely the ‘incident’ manifests some type of geopolitical battle that the news media in general would rather not touch. On November 11, 2018, France’s Macron criticized Trump’s America First policy, and that “nationalism is a betrayal of patriotism.” Perhaps next time we should briefly examine the etymology of the two terms.
Marshall Wordsworth
Marshall Wordsworth, author of Inconvenient and Uncomfortable: Transcending Japan's Comfort Women Paradigm