The Chinese government has been using a private company jointly owned by a U.S. investment firm and its Chinese counterpart to expand its surveillance and telecommunications capabilities using American technology, The Wall Street Journal reports.
At the center of the Journal’s reporting is a company called Asia Satellite Telecommunications (AsiaSat). It’s a satellite operating company acquired back in 2015 by U.S. private equity firm The Carlyle Group and Chinese private equity firm CITIC Group. Both Carlyle and CITIC are known for their ties to government in their respective home nations.
While the U.S. government basically bans American companies from exporting satellite technology to foreign governments like China, there have been no controls put in place on how bandwidth from launched satellites is used once those satellites are in orbit.
Based in Hong Kong, AsiaSat isn’t subject to the same sort of export controls and regulations that the U.S. places on companies headquartered in mainland China, which has allowed the company to acquire U.S. satellites.
The Chinese government, through its connections with CITIC, has leveraged that loophole to bolster its surveillance and telecommunications capabilities for security activities, the Journal reports.
At issue are satellites bought by AsiaSat from Boeing and Maxar Technologies subsidiary SSL, a Palo Alto, Calif. We’ve reached out to Maxar and AsiaSat for comment.
“Boeing follows the lead of the U.S. Government with respect to the use of export controlled items,” the company said in a statement to TechCrunch.
The U.S. and China are in a highly public contest over who will control the future of networking technologies — with the U.S. accusing China’s leading commercial telecommunications vendors of collaborating with the Chinese government to spy on partners.
U.S. officials also accuse their counterparts in Beijing of using physical and cyber espionage to acquire American technology. However, in this case, China was able to use corporate interests and profit-seeking to gain access to core U.S. satellite technologies, the Journal reports.
Since at least 2011, Citic has touted Chinese intelligence branches and armed services as customers of its satellite company’s services, according to the Journal’s reporting.
In other marketing materials, Citic’s satellite company has touted its link to government agencies — as a tool to link national broadcasters to far flung towns and cities across the sprawling nation. Meanwhile, China’s Ministry of Public Security has documented how it used AsiaSat 5 — a satellite made by SSL — to develop rapid-response forces with audio and video capabilities provided in real-time, the Journal is reporting.
Citic’s ownership stake in AsiaSat predates the Carlyle Group’s acquisition. The company previously was a joint venture between the Chinese private equity firm and General Electric and its surveillance activities extend back to that period as well.
In 2008 and 2009, AsiaSat assets were used to help authorities communicate and coordinate efforts to put down antigovernment protests over religious and ethnic persecution in Tibet and Xinjiang — a mineral-rich region in Northwestern China populated mainly by an ethnic minority called Uighurs, a group comprised predominantly of practicing Muslims.
In a statement provided to the Journal, AsiaSat disputed the company’s reporting, saying that the Chinese military wasn’t a direct customer, but used capacity for disaster relief. Several cities in the Chinese province of Sichuan were decimated by an earthquake that hit in 2008.
AsiaSat also declined to comment on whether its bandwidth was being used in Xinjiang currently or whether it had been used in the Tibet and Xinjiang uprisings that occurred roughly ten years ago. In the past few years, Chinese authorities have built a pervasive surveillance network in Xinjiang and sent as many as one million ethnic Uighurs to internment camps, according to multiple reports.
In statements to The Wall Street Journal Carlyle said that AsiaSat’s equipment supports internet and phone communications for Chinese telecommunications carriers.
“It is effectively a pipe,” Carlyle said in a statement to the Journal, “and AsiaSat, because of privacy issues, doesn’t monitor or regulate the content that flows through it.”