“This is becoming more and more dangerous.” Across Europe, authorities have installed security screening devices made by a Chinese company with deep ties to China’s military and the highest levels of the ruling Communist Party.
Nuctech’s critics allege the Chinese government has effectively subsidized the company so it can undercut competitors and give Beijing potential sway over critical infrastructure in the West as China seeks to establish itself as a global technology superpower.
“It’s our equipment, but it’s your data. Our customer decides what happens with the data,” said Robert Bos, deputy general manager of Nuctech in the Netherlands, where the company has a research and development center. On its website, Nuctech’s parent company explains that Nuctech does more than just provide hardware, integrating “cloud computing, big data and Internet of Things with safety inspection technologies and products to supply the clients with hi-tech safety inspection solution.”
“This is becoming more and more dangerous. I wouldn’t mind if one or two airports had Nuctech systems, but with dumping prices a lot of regions are taking it,” said Axel Voss, a German member of the European Parliament who works on data protection. “This is becoming more and more a security question. You might think it’s a strategic investment of the Chinese government.”
“It’s not just commercial,” said a U.S. government official who was not authorized to speak on the record. “It’s using state-backed companies, with state subsidies, low-ball bids to get into European critical infrastructure, which is civil airports, passenger screening, seaport and cargo screening.” Nuctech’s Bos said the company keeps prices low by manufacturing in Europe. “We don’t have to import goods from the U.S. or other countries,” he said. “Our supply chain is very efficient with local suppliers, that’s the main reason we can be very competitive.”
“We in Norwegian Customs must treat Nuctech like everybody else in our competition,” Engen said. “We can’t do anything else following EU rules on public tenders.” Airports in London, Amsterdam, Brussels, Athens, Florence, Pisa, Venice, Zurich, Geneva and more than a dozen across Spain have all signed deals for Nuctech equipment, procurement and government documents, and corporate announcements show.
“It’s just an ad hoc decision choosing between bad and worse options,” Abukevicius said. He added that the government is developing a road map to replace all Nuctech scanners currently in use in Lithuania as well as a legal framework to ban purchases of untrusted equipment by government institutions and in critical sectors.
It has provided license plate recognition devices for a police checkpoint in Xinjiang, Chinese government records show, and an integrated security system for the subway in Urumqi, the region’s capital city. It regularly showcases its security equipment at trade fairs in Xinjiang. Scott Kennedy, a Chinese economic policy expert at the Center for Strategic and International Studies in Washington, said that the ambiguous boundaries between the Communist Party, state companies and financial institutions in China — which have only grown murkier under China’s leader, Xi Jinping — can make it difficult to grasp how companies like Nuctech are structured and operate.
Today the majority shareholder in Nuctech is Tongfang Co., which has a 71 percent stake. The largest shareholder in Tongfang, in turn, is the investment arm of the China National Nuclear Corp. , a state-run energy and defense conglomerate controlled by China’s State Council. The U.S. Defense Department classifies CNNC as a Chinese military company because it shares advanced technologies and expertise with the People’s Liberation Army.
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