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Trump’s Huawei threat a risk to Canadian and global tech in 2019: Don Pittis

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Reports that U.S. President Donald Trump is threatening to up the stakes in his battle with Chinese tech giant Huawei in 2019 seem at first glance the kind of Trumpian sniping the world has grown to expect.

But if it is true, as Reuters reported this past week, that Trump may sign an executive order prohibiting U.S. firms from buying Huawei technology, the issue goes far beyond Huawei and 5G wireless networks to one that could transform the global tech industry. And not for the better.

The reason is that Huawei — and Chinese chip maker ZTE, which the U.S. president also threatened to ban — are not unique. Instead, they are merely a couple of examples of Chinese technology that is not just catching up to the best in the world, but beginning to exceed it.

China, tech superstar

For Canadian technology businesses trying to see their way forward, facing a global tech leader that is in conflict with the U.S. is an unfamiliar experience.

Despite the Soviet Union’s space race victory with its 1957 launch of Sputnik 1, humanity’s first artificial satellite, the collapse of the Soviet communist empire nearly 30 years ago revealed a creaking technological relic.

Canadian technology experts say China is something entirely different and people who try to make the comparison with Eastern Europe, where the Trabant was the communist answer to the BMW, have it all wrong.

Some analysts say the poor quality of the Trabant and the time it took to order one were significant factors in the collapse of communism in Eastern Europe. But China’s rise as a tech industry powerhouse is a different story. (Arnd Wiegmann/Reuters)

Pretty well everyone now knows that China is a developing technological competitor. But there are growing indications that, barring some political or economic cataclysm in China, or a sudden technological golden age here in North America, China is on its way to becoming not just a technological powerhouse, but the technological powerhouse. It is becoming the global tech superstar.

And at some point Canada is going to have to make some crucial decisions on how it will cope with that change. And it may find its interests do not coincide with those of the United States.

“On Chinese technological prowess, they are now graduating twice as many graduates as the United States from university, but they’re graduating five times as many STEM graduates,” says Gordon Houlden, director of the University of Alberta’s China Institute. STEM stands for science, technology, engineering and math, the kind of graduates who make a real difference in the race for world-beating know-how.

Leapfrogging the world

In many ways, the explosive developments in Chinese science and technology have no equivalent since pre-war Germany leapfrogged the world in many areas of science and industrial production.

Over the past month, the arrest in Canada of Huawei executive Meng Wanzhou, at the request of U.S. prosecutors, has helped focus attention on that company.

An exhibition marking the 40th anniversary of China’s reform and opening up at the National Museum of China in Beijing shows off the country’s space technology. (Thomas Peter/Reuters)

While the charges against Meng have nothing to do with 5G — she’s accused of misleading financial institutions about her, and Huawei’s, relationship with a company that did business with Iran — the case has spotlighted Huawei’s state-of-the-art contributions to communications technology.

There has been much debate over whether Huawei’s involvement in 5G, or even the sale of its phones in the world market, represent a Trojan horse for the Chinese government, giving the country’s security forces backdoor access to our deepest secrets.

Not just telecom 

But that focus on 5G may be misleading. For one thing, 5G is not a single gizmo. It is more accurately a kind of marketing title for the fifth generation of mobile phone technology. As such, it represents a host of technological subsets, mostly software, some of which are being developed in Canada, says R&D specialist Rick Clayton, a partner with the Ottawa-based consultancy Doyletech.

Clayton says Huawei is just one company operating in an industrial cluster in the Ottawa suburb of Kanata North, where Canadian engineers, some of whom used to be at Nortel Networks before its collapse, work on new software components.

“There’s a fair bit of implicit and explicit sharing between the companies,” he says, which is part of what makes an industrial cluster strong.

And this by no means applies just to the smartphone sector.

One way of sharing is to license intellectual property that someone else has already invented, says Mark Henderson, former owner and editor of the specialist newsletter Research Money.

“They can get it immediately as opposed to working it out of their lab over a period of months or years,” he says.

That international sharing of technology between companies saves money and speeds up progress. The financial damage of cutting off access to intellectual property invented in China, especially as its technology pulls ahead, is hard to calculate.

Chinese open source

Another common way of sharing is called open source software, something that’s been around for years and famously includes the operating system Linux, where employees from many different companies work to build and improve chunks of programming components that are widely used in the systems of those and other companies.

An increasing number of those open source projects are being invented and co-ordinated by Chinese software developers, and that trend is only likely to grow as China increases its number of STEM graduates.

Another potential mistake compounded by the focus on Huawei is thinking that China’s growing technological skills are isolated in just a few areas, such as telecom.

While the experts interviewed for this piece say the U.S. still has an overall technological lead in many sectors, China is not just catching up, it is pulling ahead.

According to the MIT Technology Review, China has become the one to beat in space technology, while its southern city of Shenzhen is racing to outdo California’s Silicon Valley as “a global hub of innovation, entrepreneurship and manufacturing.”

Currently, most global products include the best innovations from around the world. U.S. firms use Chinese-invented technology and vice versa. 

A Huawei executive has said the company will do absolutely anything, including opening its code to detailed inspection, to prove that it is not a threat. Whether a ban is worthwhile can only be determined by the best and most independent security experts. And banning Huawei to eliminate a purported backdoor does not guarantee U.S. systems will be secure from international hackers who have used other methods of entry.

If instead the security concerns are actually part of a political attempt by Trump to weaken China’s technological advantages, the world may be on the verge of a watershed that could hurt everyone. The risk is there could be a new technological cold war that divides the world, forcing countries to choose between two increasingly incompatible technical — and political — systems.

As Gordon ​Houlden of the China Institute says, besides the business cost and difficulty of untangling two sets of competing technology, economic interdependence helps prevent wars. He says as an outward-looking trading nation, Canada should do everything it can to try to prevent such a technological fissure and the resulting political divide that will inevitably hurt both the U.S. and China.

Ultimately, says Houlden, if push comes to shove, Canada must stand shoulder to shoulder with the U.S., its longtime ally and security guarantor. 

But avoiding a technological split into “we” and “they” is not just in the interests of Canada, but those of the global technology industry both inside and outside the American sphere. 

And if that doesn’t matter to you, consider this. If we gang up with the U.S. against China’s increasingly sophisticated knowledge industry, maybe sometime soon we will no longer be able to get our hands on the coolest tech.

Follow Don on Twitter @don_pittis

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7 Tips For First-Time Home Buyers In Calgary

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Buying a house for the first time can be overwhelming to say the least. If you’re wondering what neighbourhood to go with, what you can afford, or even how to just get started on the process, let us take some stress off your hands! We’ve teamed up with Hopewell Residential to give you 7 tips to ensure the home you end up with is everything you dreamed of.

Hopewell Residential is a five-time Developer of the Year award winner, so their expertise is second-to-none in Calgary and beyond. Who better to learn home-buying tips from than the homebuilders themselves?

Create a checklist of needs & wants

This is a biggie. When you’re buying your very first home, you’ll want to weigh your needs vs. your wants. Ensuring you have what you love in your first home is a big, big deal.

What should you do? Easy. Set up a list of needs and a list of wants, but be pretty strict with yourself, and make sure you take your lifestyle into consideration. With the increase in remote work over the past year, it’s important to keep in mind that a home office or flex room might just be the key to maximizing at home happiness. Especially if you’re thinking you might be expanding your family later on, spare rooms and extra space is key (but more on that later!).

Or for instance, you might need a home in an area with a high walkability score, but you want to be close to certain amenities. Set yourself up with the right level of compromise and the number of homes that actually fit your ‘perfect’ idea will skyrocket.

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‘Don’t give up’: Ottawa Valley realtors share statistics, tips for homebuyers in ‘extreme’ sellers market

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The real estate market in the Ottawa Valley can be summed up this way: people from far and wide are in a buying frenzy, but there’s hardly anything to buy at the “store,” and the limited inventory is overpriced.

This “stampede” — as one realtor described it — will affect rural towns as residents grapple with finding affordable housing and agonize over their inability to purchase homes in their price range.

“We are seeing a lack of inventory in all price ranges,” said Laura Keller, a real estate agent from Carleton Place.

Helen Vincent, a Renfrew realtor, said she’s never seen a market like this in her 36 years of practice. “We postpone offers for four to five days in order to get all the buyers,” she said.

Multiple offers — between seven and 10 — became the norm, with cash offers and no conditions, as buyers faced bidding wars. “In Ottawa, they have up to 50 (offers),” she added.

“It’s very stressful. You’re going to get nine (people) ticked off, and one happy. So many people are disappointed,” Vincent said.

Terry Stavenow, an Arnprior realtor for 40 years, said that “the pent-up need took over with inventory going low. It made a stampede on everything that was available.“

“Brand new housing — it’s very much gone. Several building developers are rushing to get inventory. They usually don’t do construction in the winter months,” said Stavenow.

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10 Tips For First-Time Home Buyers

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Buying a home for the first time is exciting and a commitment to the future. It’s often challenging, too, and the process requires a lot of steps, many of which can be tricky to navigate as a first-time home buyer.

What are some things you should keep in mind as a first-time home buyer?

First-Time Home Buyer Tips

Here are 10 tips to keep in mind as you begin your journey toward homeownership.

1. Have Your Finances in Order

It’s wise to begin saving as early as possible once you’ve made the decision to purchase a house. You’ll need to consider the down payment, closing costs (which often range from 2% to 5% of the down payment), as well as move-in expenses.

You also need to understand the other costs of homeownership, such as mortgage insurance. property taxes, utilities, homeowner’s insurance, and more.

2. How Much Can You Afford?

Knowing how much you can realistically afford in a home is another important financial consideration. Look for the home of your dreams that fits your budget.

One way to avoid future financial stress is to set a price range for your home that fits your budget, and then staying within that range. Going through the preapproval process will help you understand what price range is realistic for your budget.

3. Make Sure Your Credit is Good

Another thing to keep in mind as a first-time home buyer is your credit score because it determines whether you qualify for a mortgage and affects the interest rate that lenders offer. 

You can check your credit score from the three credit bureaus – Experian, Equifax, and TransUnion.

This is another good reason for getting preapproved before you start your search. Learn more about the preapproval process and your credit score.

4. Choose The Right Real Estate Agent

A good real estate agent guides you through the process every step of the way. He or she will help you find a home that fits your needs, help you through the financial processes, and help ease any first-time buyer anxiety you may have.

Interview several agents and request references.

5. Research Mortgage Options

A variety of mortgages are available, including conventional mortgages – which are guaranteed by the government – FHA loans, USDA loans, and VA loans (for veterans).

You’ll also have options regarding the mortgage term. A 30-year fixed-rate mortgage is popular among many homebuyers and has an interest rate that doesn’t change over the course of the loan. A 15-year loan usually has a lower interest rate but monthly payments are larger.

6. Talk to Multiple Lenders

It’s worth your time to talk to several lenders and banks before you accept a mortgage offer. The more you shop around, the better deal you’re liable to get – and it may save you thousands of dollars.

7. Get Preapproved First

Getting a mortgage preapproval (in the form of a letter) before you begin hunting for homes is something else to put on your checklist. A lender’s preapproval letter states exactly how much loan money you can get.

Learn more about the preapproval process and how preapproval provides you with a significant competitive advantage in our article How Preapproval Gives You Home Buying Power.

8. Pick the Right House and Neighborhood

Make sure to weigh the pros and cons of the different types of homes based on your budget, lifestyle, etc. Would a condominium or townhome fit your needs better than a house? What type of neighborhood appeals to you?

9. List Your Needs and Must-Haves

The home you purchase should have as many of the features you prefer as possible. List your needs in order of priority; some things may be non-negotiable to you personally.

10. Hire an Inspector

Hiring an inspector is another crucial step in the home buying process. An inspector will tell you about existing or potential problems with the home, and also what’s in good order. You can learn more about home inspections and how to find a home inspector through the American Society of Home Inspectors website.

Buying a home for the first time is a challenge, but it’s one you can handle with the right planning and preparation.

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