Outbidding Competition on Price : Devastatingly Tried-and-True

"[Nuctech is] using a massive low-level pricing strategy [to undercut competitors and the European Commission] must carefully analyze [airport security contracts] and guarantee that the highly sensitive personal data of our airline passengers are sufficiently protected."
German minister

"Canada is kind of a sleepy and unaware target."
"We don't have the same kind of vigilance that you now see in places like Australia and New Zealand [against Chinese government-linked corporations' inroads in other countries' technologies]."
"That had better change."
David Mulroney, former Canadian ambassador to China

"We're not asking for charity, we're asking for a fair shake. We know the components they [Nuctech] are using and it doesn't make sense that they could come in at a price 20 to 25 percent lower."
"Do you think my company would have any opportunity to bid on contracts for Chinese consulates? Impossible."
"I'm told I have to frame my discussion points -- that no procurement rules were broken -- or it sounds like sour grapes. But I'm upset."
Rory Olson, VOTIDetection, Montreal

A Nuctech Company booth at a trade show in Germany in 2017. Dado Galdieri/Bloomberg

"The security and safety of people in our embassies, consulates and high commissions around the globe is a top priority."
"We are currently looking into the offer with Nuctech Company to provide some security screening equipment in our missions abroad. This standing offer is not a contract, and Global Affairs has not purchased any equipment from Nuctech at this time."
"Any possible issue relative to security or safety will be properly reviewed and all appropriate actions taken to ensure the safety of our missions around the world."
Global Affairs Minister François-Philippe Champagne

Nuctech X-Ray scanner truck

The Liberal government of Justin Trudeau caught flat-footed again. Too many times, in fact, to reflect the actions of a responsible, aware government. A security contract granted to a Chinese company owned by the Chinese government itself, to supply X-ray and other equipment for security purposes, to install, maintain and guide Canadian users in the company's product to be installed at 170 Canadian embassies and consulates abroad.

China's cut-throat lowball bids, undercutting all its competition for such contracts, typical of a corporate culture guided by Beijing in its long-range plans to dominate all markets and technology markets in particular. Bid low, undercut the competition, dominate the market once competitors are out of business, then set a more suitable, profit-oriented price. What Beijing is orchestrating in its overriding technologies it pioneered in goods manufacturing.

The world wanted lower priced products that still maintained a level of quality. China's cheap labour market, its vast resources and resource outreach scalping other countries of theirs, flooded world markets with its reasonably-priced goods from apparel to food products, pharmaceuticals to durable products of all kinds; housewares and automotive, including furniture and appliances. The range of products and their low prices ensured that manufacturing worldwide went into a slump.

No other country can compete with China. Its vast workforce, resources and manufacturing capacity undercut manufacturing everywhere, jobs were lost, companies went bankrupt, and China increased its workforce, produced even more to supply a world community whose residents looked for price and settled for lesser quality in a throwaway culture where built-in obsolescence necessitating frequent replacements satisfied both China's manufacturing emphasis and consumers' desire for newer and shinier.

Bearing in mind that China's trade practices are uniquely China's. That relations between China, with its huge investments in Canadian natural resources, and Canada, with its wish in the Liberal-led governments to sign lucrative free trade deals with the colossus, leading it to overlook human rights abuses practised by Beijing, and the more recent kidnapping and charging of two Canadian businessmen with espionage, imprisoning them in a vengeance move when Canada held Huawei's CFO on an American extradition warrant.

Justin Trudeau's government was determined to have a free trade agreement with China, as a feather in the cap of a Liberal government, one that has been pioneered and pursued by former Prime Minister Jean Chretien. This government appointed a Chretien protege to the position of Minister of Foreign Affairs; who saw fit to take out a $1.5 million loan from a Chinese bank to procure two properties in London, England, a man known to have made deep personal contacts in the Chinese government, just as his mentor Chretien had done.

Under Francois-Philippe Champagne, Minister of Global Affairs, irrespective of the hostile relations between China and Canada, a highly sensitive contract to provide security equipment to Canada's missions abroad proceeded. The Chinese bid distinguishing itself by being the lowest, the sole criteria recognized by Procurement Canada in selecting Nuctech. In the process bypassing a highly qualified U.S. company and an equally qualified Canadian company. Absolutely tone-deaf.

According to a Wall Street Journal article published a month earlier the U.S. National Security Council identified Nuctech as a western security threat, linked to its extensive presence at ports, border crossings and airports Europe-wide. Canadian company VOTIDetection has won contracts in the past from Amazon, the U.S. Air Force and the UN Refugee Agency; it is more than capable of holding its own as an industry leader.

Global Affairs Minister Champagne. Adrian Wyld/The Canadian Press

When it was revealed several days ago that this contract with a Chinese company known as the "Huawei of airport security" was pending -- by investigative reportage -- Global Affairs Minister Champagne was quick to deny the contract had been finalized, and it would now be his intention to look into the matter. Just as when it was publicly revealed that a Chinese bank held his two London mortgages, he took steps to take out loans from Western sources and close out his mortgage loans with the Chinese bank.

Meanwhile, Nuctech has succeeded in winning five contracts to supply sensitive equipment to the Canadian government, and secured as well four border security and customs warehouse contracts to supply the Canadian Border Services Agency. Wholly owned by the Chinese government known for its attention to cyberespionage, it is shocking that these agreements could have proceeded.