SAN FRANCISCO—A Congressional committee Monday (Oct. 8) warned American operators not to buy equipment from China's leading telecom equipment makers, Huawei Technologies Co. Ltd. and ZTE Corp., citing potential risk to U.S. national security interests.
In a report, the House Intelligence Committee strongly encouraged U.S. telecom operators to seek other vendors for their projects.
"Based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems," the report stated.
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Other governments and organizations have previously expressed concerns about the potential security threat posed by Huawei and ZTE, the world's first and fifth largest suppliers of wireless communications infrastructure equipment, respectively. Both companies are suspected of having ties to the Chinese government, military and China's ruling communist party. The firms have been accused of designing communications equipment to allow unauthorized access by the Chinese government, a charge that has stoked fears over national security and the potential for corporate espionage.
The report recommended that the U.S. "view with suspicion the continued penetration of the U.S. telecommunications market by Chinese telecommunications companies." It further recommended that the U.S. block acquisitions, takeovers, or mergers involving Huawei and ZTE.
Both companies issued statements Monday criticizing the report's findings.
The committee's report was particularly critical of Huawei, saying that the investigation turned up evidence of bribery, copyright infringement, immigration violations and discriminatory practices by the firm. The committee said it would refer these allegations to the Justice Department for review and possible investigation.
On the other hand, The Chinese manufacturer or even government could sell "unauthorized" access to the equipment to the US government. This could be especially useful if the real enemies of the US - countries where US flag burning is routine in street demonstrations - also purchase telecom equipment from these companies.
I've actually worked for a company competing against Huawei and ZTE. The playing field is most definitely not level. The amount of Chinese government backed loans spurting into these companies has nothing to do with fair competition.
As far as crooked business practices go it is well known in the industry that this has happened. To a certain extent it was just that these were normal business practices in China and they were surprised that it wasn't in the west.
Finally China's internal markets are MUCH more protected than the west's. Until they open up, create a legal system that doesn't do their government's will and float their currency I'd be happy to see more of this.
And no I don't think the Chinese people are our enemies but I suspect members of their government are.
Is there politicking and to some extent protectionism involved? No doubt, but there is still a very valid concern here.
Given the direct er, influence, the Chinese gov has over any supplier on the mainland I agree with the report. Until those companies provide proof of innocence - as in trusted 3rd party verification of code used in their equipment - then it is far far better to err on the side of security.
That said, I would think that the same applies to Chinese suspicions on equipment (and software) they import. There is good reason and it's not just 'business' that the Chinese gov has pushed and supported their home-grown telco and computer biz. Along those lines they (and Russia) are also the largest users of Linux simply because they *know* what is in the code.
Who's to say that US companies aren't doing the same thing: Leaving backdoors, etc for exploits such as Stuxnet and Flame. Or for that matter, what about PC's in general ? There's no practical way to reverse-engineer the multitude of custom SoC's that could easily have eavesdropping hardware built-in.
And then there's software...it's a given that M-Soft products have more security holes than a block of Swiss cheese.
The only way to keep your data safe is to leave your brand new computer in the box and never turn it on. Nothing is secure anymore.
I must have supplied chips to you and I know how you guys work. I have no idea how the Chinese government is involved with the Huawei & ZTE business, but I have seen the revenue from you guys are declining year on year.
I see more of you guys mistakes have helped Huawei and ZTE rather than they have done better.
If you look into Marconi's performance when BT started thire 21CN, you may understand more.
Not allowing Huawei & ZTE to get into US market, the only thing we can have is to use expensive equipments which isn't any better.
Starting in the early 1970's, the military systems people started using commercial components rather than the old custom military parts. I remember our military products people used to get custom IC's made at Motorola, and sadly we had to shut down other parts, and move all non-US citizens out of factory, then they brought in their wafers and masks, we ran a few operations, they took their stuff (including any broken pieces of wafers) out, and we never knew what they were for.
In 1968 Nasa started to set up its own pilot fab (for beam-lead CMOS !) in Alabama...we wrote a plan for them. Not sure how many other secure fabs were set up. But that could not keep up with cost-benefit of commercial chips.
Iridium phones and Motorola sat pagers were first good communication gear that the Chinese Army got to talk back to their leaders from remote regions. That may have prevented some border wars due to confusion. But they had to think that we were also listening.
The web and consumer electronics changed everything. Everything is open now. Perhaps that is safer? No secrets? Well...NOT if you are using the web to control the electrical grid, for example, or power plants. Options?