Canadian Pension Board Investing Billions in Chinese Company That Was Subject of Security Warning to MPs

Tencent’s WeChat used by Beijing for censorship and to crack down on dissent
July 9, 2020 Updated: July 9, 2020

Canada’s pension board is investing billions of dollars in a Chinese company whose social media platform was the subject of a warning by security officials to parliamentarians and is used by Beijing to censor and clamp down on dissidents.

The Canada Pension Plan Investment Board (CPPIB) has invested over $3 billion in Tencent, which owns the popular Chinese social media platform WeChat, among many other holdings. The investment is part of the board’s plan to ramp up allocations in China to 20 percent of the fund’s assets by 2025.

Canadian MPs and House of Commons staff were told by the House’s cybersecurity team last year to stay away from WeChat, iPolitics reported. The warning came at a time of heightened tension with China after the arrest of Huawei executive Meng Wanzhou in Vancouver at the behest of the United States and Beijing’s arrest of Canadians Michael Kovrig and Michael Spavor shortly after.

The security note said information on the platform continues to remain on servers located outside Canada even after it’s been deleted. It also said the platform doesn’t provide end-to-end encryption.

“Rigorous protections of user data cannot be assured,” the security note said.

Many politicians in Canada and other Western countries use WeChat accounts to communicate with Chinese diaspora in their ridings.

A study released by the University of Toronto’s Citizen Lab in May said communications on WeChat both inside and outside China are “subject to pervasive content surveillance.”

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The logo of the Chinese instant messaging app WeChat on the screen of a tablet in a file photo. (Martin Bureau/AFP/Getty Images)

“Documents and images transmitted entirely among non-China-registered accounts undergo content surveillance wherein these files are analyzed for content that is politically sensitive in China,” the study said.

Analysis gained from the surveillance is used to tighten censorship inside China, the study said. The company uses a sophisticated algorithm to censor content that’s deemed sensitive by the Chinese Communist Party (CCP).

There have also been cases of Chinese authorities using private chats on the platform to track down targets.

In 2018, the anti-corruption task force of the small Chinese city of Chaohu boasted in a public post on WeChat that it had made a breakthrough in a case by “retrieving” deleted messages from a suspect’s phone.

“The Chaohu Municipal Discipline Inspection and Supervision Commission in March retrieved a series of deleted WeChat messages from a suspect, hence enabling investigators to be more adaptive in the interrogations and allowed progress to be made in completing the investigation,” said the post, which was deleted shortly after.

The post was a rare admission by Chinese authorities that they can access WeChat messages even after they have been deleted, indicating that the platform is storing private data elsewhere, in line with the warning issued by Canadian security officials.

Also in 2018, Financial Times journalist Yuan Yang said a Chinese police officer who reviewed her visa renewal application questioned her about an event she organized for journalists, saying he saw her messages related to the event on WeChat. However, Yang said those messages were not posted publicly but were part of private conversations on the platform.

In another case in 2017, a construction supervisor named Chen Shouli based in Puyang, China, was detained for several days by police for making a comment about a Chinese official in a chat group in WeChat, according to The Wall Street Journal.

A 2019 report by the Washington-based Freedom House says surveillance on WeChat by the Chinese regime is “increasingly leading to legal repercussions for ordinary users.”

The report says many WeChat users have faced consequences for posting messages critical of Chinese officials or sharing information about human rights abuses including the persecution of Falun Dafa adherents, Uighur Muslims, and Tibetan Buddhists.

“The punishments have ranged from several days of administrative detention to many years in prison, in some cases for comments that were ostensibly shared privately with friends,” the report says.

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Tencent Holdings Chairman and CEO Pony Ma (C) visits the Tencent booth following the opening ceremony of the fifth World Internet Conference (WIC) in Wuzhen, China, on Nov. 7, 2018. (Reuters)

Last year, Dutch hacker Victor Gevers revealed a Chinese database showing over 3.7 billion intercepted WeChat messages that had been flagged for further scrutiny, including 19 million sent from outside China. He said the messages and the users’ identities were relayed to police stations across China.

WeChat currently has over a billion users, the majority of them in China.

Chinese Law

U.S. Secretary of State Mike Pompeo said on July 7 that the United States is considering banning Chinese social media apps. He made the remarks in an interview with Fox News in response to a question related to another Chinese app, TikTok, which was recently banned in India over concerns that it passes on user information to the Chinese regime.

Christopher Ford, the assistant U.S. secretary of state for international security and non-proliferation, said last year that Chinese technology giants including Tencent “have become deeply enmeshed in Beijing’s system of oppression at home and its increasingly assertive strategic ambitions globally.”

Ford also noted that although companies like Tencent are private in name, in reality they must cooperate with China’s intelligence apparatus, similar to state-owned companies.

China’s National Intelligence Law, enacted in 2017, requires all companies and citizens to “provide necessary support, assistance, and cooperation” with the regime’s intelligence institutions.

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Pony Ma, CEO and chairman of Tencent, who is also a member of the 13th National People’s Congress, attends a meeting of the congress on March 8, 2019, in Beijing. (Lintao Zhang/Getty Images)

But the law has merely formalized what has long been the practice in China, says a report published by the Canadian Security Intelligence Service.

In an infamous case in the early 2000s, Yahoo allegedly provided the Chinese regime with private information of dissidents using its platform, which led to their arrest and sentences of 10 years in jail. The internet giant settled a lawsuit brought by the dissidents’ family members and offered a public apology.

Pony Ma, co-founder, chairman, and CEO of Tencent, is a deputy in the 13th National People’s Congress in China.

Server Security Concerns

Unlike many other secure communication apps, WeChat doesn’t provide end-to-end encryption between users. Instead, it uses “transport encryptions”—meaning messages are encrypted between the user and WeChat’s servers. This means that all messages that are meant to be private between users go through these servers before they are delivered to the intended user.

Tencent insists that all messages are deleted from the servers once they are received by the intended user.

The company updated the wording of its privacy policy in 2017 to say that it would “retain, preserve or disclose” users’ data to “comply with applicable laws or regulations,” essentially admitting that it would share user’s private data with the Chinese regime in accordance with Chinese law.

A 2016 report by Amnesty International gave Tencent’s WeChat and other messaging platform QQ a score of 0 out of 100 for privacy protection.

Tencent did not respond to a request for comment.

Censorship in Canada

In 2017, Vancouver East NDP MP Jenny Kwan issued a statement in support of pro-democracy protestors in Hong Kong. However, the statement, which was sent to her constituency using WeChat, is nowhere to be found, according to Human Rights Watch researcher Yaqiu Wang.

“In this case, the Chinese government quietly and effortlessly prevented a foreign elected official from being heard by her own constituents in their own country,” Wang wrote in a commentary. “Imagine the consequences if the Chinese government decided to disrupt these conversations on a broader scale.”

For users in Canada, WeChat also routinely censors content they post that is deemed sensitive by the Chinese regime, including content related to the arrest of Meng Wanzhou.

Huawei chief financial officer Meng Wanzhou arrives at a parole office, in Vancouver, on Dec. 12, 2018. Canada announced on Mar. 1 that the extradition hearing against Meng would proceed. (The Canadian Press/Darryl Dyck)
Huawei chief financial officer Meng Wanzhou arrives at a parole office, in Vancouver, on Dec. 12, 2018. (The Canadian Press/Darryl Dyck)

“The internet has no national boundaries, so overseas Chinese who use WeChat are subject to China’s control,” Gao Bingchen, an independent journalist in Vancouver, told the Toronto Star.

WeChat made headlines in Canada recently after an incident involving the WeChat group of Liberal Minister of Digital Governance Joyce Murray. Local Vancouver news site The Breaker reported that the group, operated by the minister’s staff, allowed a message to be posted that asked for donations for a lawsuit against Global News reporter Sam Cooper. Cooper’s reports on China included how pro-Beijing groups followed the regime’s instructions to stockpile medical safety supplies and send them to China in the early days of the pandemic.

The incident drew condemnation from opposition parties and Prime Minister Justin Trudeau. The person who posted the donation request was removed from the chat group.

Influence Abroad

When politicians use WeChat, “they are automatically part of the censorship apparatus that is being run out of Beijing,” Fergus Ryan, cyber analyst with the Australian Strategic Policy Institute (ASPI), told the Australia Broadcasting Corp.

A paper by ASPI says one primary issue with WeChat is its extension of censorship beyond China’s borders.

“China’s domestic censorship online and offline is notorious. Less often discussed is China’s ability to extend this censorship regime to Australia,” the paper says.

But the Chinese regime’s interference using WeChat goes beyond just censorship, as the platform is also used to shape public opinion, security experts say.

“Sometimes they promote particular issues, so it’s a way of controlling public debate,” ASPI analyst Tom Uren told the Sydney Morning Herald.

The issue was highlighted during the 2019 Australian federal election. A study by Australian researchers showed that the incumbent Prime Minister Scott Morrison’s Liberal Party was targeted by propaganda in WeChat.

“Our evidence suggests that accounts aligned more closely with the government in Beijing have a clear anti-Liberal story coming out of them,” Michael Jensen, a senior research fellow at the University of Canberra’s Institute for Governance and Policy Analysis, told ABC.

Chen Yonglin, a former Chinese diplomat who defected to Australia, told The Epoch Times at the time that the Chinese regime wants the Labor Party to win the election, finding it more favourable to the regime’s plans for Australia. Morrison went on to lead the Liberals to a victory in the election, remaining as prime minister.

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Australian Prime Minister Scott Morrison during a press conference at Parliament House in Canberra, Australia on June 18, 2020. (Sam Mooy/Getty Images)

The ASPI paper says WeChat also increases Beijing’s ability to control the Chinese diaspora and influence them to act as part of its efforts to interfere in other countries.

The paper cites examples of how Beijing mobilizes members of the Chinese community in Australia to counter human rights protests or to welcome Chinese officials. It says WeChat’s “reach into a large proportion of Chinese-speaking Australia clearly represents an easy vehicle for future efforts, especially when they are primed by limiting their exposure to negative news stories about China.”

Also worrying, the paper notes, is the app’s potential to be used by Beijing to monitor dissidents abroad.

“WeChat offers a far more streamlined means of monitoring overseas citizens and Australians of Chinese descent,” the paper says.

CPPIB China Investments

The CPPIB, with assets of some $400 billion, controls one of the world’s largest pension funds; it currently has around $15 billion in Chinese assets.

The board’s investment in two Chinese companies that make video surveillance equipment drew heavy criticism from Conservative MP Tom Kmiec last year due to the companies’ roles in the surveillance of Uyghur Muslims in China.

During a parliamentary committee meeting in May 2019, Kmiec asked the board’s executive Michel Leduc whether the board plans to divest from those companies due to human rights concerns. Leduc said the companies have been red-flagged and will be reviewed.

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A man walks past an advertisement for WeChat, a social media platform owned by China’s Tencent, in Hong Kong’s international airport in a file photo. (Richard A. Brooks/AFP/Getty Images)

In July that year, it was reported that the board divested from two private prison companies involved in the detention of illegal migrants along the U.S.-Mexico border.

The CPPIB did not respond to a request for comment. The board had in the past indicated, through a spokesperson, that it declined to comment when contacted about its investments in companies involved in human rights abuses in China.

With reporting by Eva Fu and Paul Huang

Follow Omid on Twitter: @OGhoreishi