Good morning. Beijing is advancing its technological ambitions by pulling foreign innovation inward and exporting its own systems of digital control abroad. That’s in focus today, along with a look at Canada’s race to find new (trade) friends.
Up first
In the news
Mining: Vancouver’s Teck Resources Ltd. and London’s Anglo American PLC have agreed to merge in a US$50-billion deal that will create world’s fifth-largest copper producer.
Telecoms: MDA Space Ltd. has lost a $1.8-billion satellite contract with U.S. telecommunications company EchoStar Corp., after a “sudden change” to EchoStar’s business strategy and a U.S. regulatory spat involving Elon Musk’s SpaceX.
Energy: The bidding war to buy the last of Canada’s pure-play oil sands producers has advanced, with Strathcona Resources Ltd. launching an amended hostile bid for MEG Energy Corp. as it seeks to best a friendly $7-billion deal with Cenovus Energy Inc.
Media: The Murdoch family has reached a deal that will see Rupert Murdoch’s politically conservative eldest son Lachlan Murdoch cement control of the family media empire, which includes Fox News and the Wall Street Journal.
On our radar
- Market watchers are fixated on Thursday’s U.S. inflation report. A rate cut next week by the Federal Reserve is priced in, but if inflation runs high, it could limit how quickly or how far the Fed lowers rates in the months ahead.
- We’re following a new report today in the U.S. that will reveal whether small business owners’ optimism in July has held through a rough patch marked by mounting uncertainty and hiring challenges.
- Earnings today include cloud-computing giant Oracle Corp. Investors’ fragile romance with artificial intelligence appeared to be strengthening after recent upbeat results from Nvidia Corp. and Broadcom Inc.
The Great Firewall is China’s nationwide system of online censorship and surveillance.WANG ZHAO/AFP/Getty Images
In focus
A welcome embrace, and a tightening grip
The lure of global competitions organized last year by Chinese officials was conventional enough: cash prizes, subsidies, and the promise of a foothold in the Chinese market. Presenters were told their pitches had to match their industrial priorities – semiconductors, biomedicine, new energy, and advanced manufacturing among them.
That same summer in Urumqi, the capital of Xinjiang, Chinese technologists gathered to discuss how to stop internet users from slipping past the Great Firewall, the state’s vast mechanism for filtering websites, blocking apps, and monitoring online activity. Their notes described a “long-term struggle and technical confrontation” – a regional effort framed as part of China’s national security mission.
The pitch events in Canada, the U.S., and other Western countries, intelligence officials now warn, exposed entrepreneurs to the loss of intellectual property and personal data under the guise of investment. The meetings in Urumqi, meanwhile, formed part of a wider campaign to refine censorship tools and extend them beyond China’s borders, with leaked documents showing how a Beijing company, Geedge Networks, has exported Great Firewall-style systems to governments in Asia and Africa.
Taken together, the competitions abroad and the censorship projects at home reveal how Beijing is advancing its technological ambitions – pulling foreign innovation into its orbit while exporting systems of digital control to the wider world.
The welcome
Canada’s Security Intelligence Service, working with U.S. counterparts, has urged startups to approach Chinese-linked pitch competitions with caution. The events, held in cities across North America and Europe, require participants to submit detailed business plans, technical designs, and financial data.
Winners were often pressed to establish operations in China, where laws grant authorities expansive powers to access company information. The security bulletin describes the competitions as part of a systematic effort to acquire emerging technologies, particularly in artificial intelligence. By mid-2024, China had more than 250 AI data centres planned or under construction, many connected to institutions tied to the People’s Liberation Army.
China’s President Xi Jinping is pictured in this picture reviewing troops during last week’s historic military parade.HECTOR RETAMAL/AFP/Getty Images
The squeeze
Documents reviewed by The Globe and international partners detail how Geedge Networks has become a key exporter of censorship and surveillance technology. Its Tiangou Secure Gateway, deployed in Kazakhstan, Ethiopia, Myanmar, and Pakistan, filters and monitors internet traffic, throttles access, identifies users, and blocks VPNs.
In Pakistan, Geedge stepped in after Waterloo-based Sandvine withdrew under U.S. sanctions, repurposing its hardware to help run the national firewall. In Myanmar, Geedge technology underpinned the junta’s post-coup ban on VPNs, sharply limiting access to independent information. Analysts say the company has given authoritarian governments censorship capabilities they previously lacked.
More than 100,000 internal files reviewed by The Globe and its partners offer a key insight into how Geedge exports cutting-edge censorship technology to its authoritarian clients, Asia correspondent James Griffiths writes – giving them capabilities they might not otherwise have.
The push and pull
The developments align with China’s Digital Silk Road, a component of the Belt and Road Initiative that promotes Chinese-built digital infrastructure and governance frameworks overseas. Researchers at the Council on Foreign Relations describe the project as an effort to export hardware – but also standards, embedding concepts of “cyber sovereignty” that prioritize state control over open networks. Rights groups warn the spread of these systems risks accelerating internet fragmentation.
Charted
Making friends isn’t easy
Exports to countries beyond the U.S. fell 8.6 per cent in July after a 4.2-per-cent drop in June, Statistics Canada reported. Prime Minister Mark Carney announced $500-million in spending last month to find new markets for Canadian lumber and touted exports on trips to Germany, Poland and Latvia. The slide was a reminder of how tough it will be for Canada to establish stronger trade ties with the rest of the world, Jason Kirby writes.
Bookmarked
On our reading list
In the bank: Financial lessons to instill this fall with your teenager. (Or to learn if you are one.)
On the chopping block: Canadian lumber producers are cutting output as prices tumble, a move that highlights their exposure to U.S. housing demand, where lumber has long served as a leading economic signal.
On brand: A Canadian-raise celebrity makeup artist is launching his own beauty line. “I eat and breathe makeup,” Hung Vanngo told The Globe. Sincere congratulations, but please remember to hydrate.
Morning update
Global markets were mixed as investors weighed expectations of a U.S. rate cut as early as next week against political upheavals including the French government’s collapse.
Wall Street futures were in positive territory, while TSX futures pointed higher.
Overseas, the pan-European STOXX 600 was flat in morning trading. Britain’s FTSE 100 gained 0.26 per cent, Germany’s DAX slipped 0.38 per cent and France’s CAC 40 advanced 0.19 per cent.
In Asia, Japan’s Nikkei closed 0.42 per cent lower, while Hong Kong’s Hang Seng rose 1.19 per cent.
The Canadian dollar traded at 72.46 U.S. cents.
