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.
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.
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.
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.
If they wanted to, Huawei and ZTE probably could incorporate capabilities into their telecom gear that could be used for surveillance, although the House Intelligence Committee provided little or no evidence that they have done so. When asked about evidence of spying, committee members said Huawei and ZTE officials wouldn't answer their direct questions on the matter. That said, another large enterprise exists that is fully capable of sweeping up nearly all the world's communications whether or not it is encrypted. The name of this organization is, of course, the National Security Agency. NSA insiders like William Binney, who worked on top-secret surveillance programs during the Cold War, have revealed that NSA has been using the surveillance technologies originally designed for foreign gathering to spy on Americans. Why isn't the House Intelligence Committee investigating this?
I think that the threat to national security is an excuse. The real reason is the lack of confidence of competition. Huawei is very successful in Europe, such as UK's 21CN. No one has challenged Huawei's threat here. The answer is E///, ALU and NSN. To look at US, Cisco appears afraid of the march of Huawei and ZTE and all the semi's are kissing their arses to provide them the most advanced chips with peanuts price.
I would like to see the Americans stand up to face the competition to make something like iPhone rather than moan pathetically like the Congress.
Chinese should really be educated by your "China is NOT our friend". I believe the majority of Chinese are not aware of that. They are still in their dream of a peaceful world.
BTW, you want a friend, you get a friend. If you want an enemy, you will get an enemy.