China‘s extensive ties to Israel‘s technology industry were treated on June 2 by an investigative report in the Wall Street Journal that specifically cited Huawei‘s local subsidiary, Toga Networks, which has reportedly been operating in the country over the past seven years.
Interestingly, Huawei does not officially recognize Toga as a subsidiary, although Toga is identified as a unit of the company by Israeli government documents and patents attributed to Huawei engineers working under the auspices of Toga. Toga specializes in telecommunications networking, storage, information security (encryption) and tools that allow service providers to inspect data moving through their routers (a function normally used to prioritize traffic, but that can also be employed to identify people visiting certain websites or keywords in emails).
Toga‘s hiring practices raise even more concerns, as many of the company‘s engineers previously served in elite Israeli army units focused on interception and encryption technology. The company reportedly offered highly competitive compensation packages — oftentimes doubling the going market rate — and, according to current and former employees, more than 200 ultimately moved on to Huawei.
The issue of technology transfers from Israel to China has been a source of national security concern in the past, with the U.S. occasionally directly intervening in especially sensitive circumstances. More recently, Washington has expressed consternation over the increasing involvement of Chinese companies (i.e., Alibaba, Baidu and Xiaomi) in the development of sensitive technology inside Israel.