A Congressional report due to be released later today is expected to recommend that Chinese telecoms firms Huawei and ZTE pose a potential security threat to the US.
As such, they should be barred from any mergers and acquisitions in the country.
Huawei is the world’s second-largest manufacturer of telecoms equipment, while ZTE is the fifth, and both are keen to expand further into western markets.
But concern has been rising for some time about the two companies’ association with the Chinese government and military. Huawei’s CEO, Ren Zhengfei, used to work in the IT research division of the People’s Liberation Army of China, and the company still has strong ties with the government.
It was was recently barred from a major broadband project in Australia over similar concerns.
“China has the means, opportunity and motive to use telecommunications companies for malicious purposes,” the House Intelligence Committee says in its report.
“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.”
Huawei argues that it’s a perfectly normal multinational company.
“Not a day goes by that we do not read or hear politically- or competitor-inspired negative commentary about cyber security,” complained John Suffolk, who heads up its global security, in a recent pitch to the British government.
“Huawei is proud of its heritage and proud to have an entrepreneurial founder who, by an act of fate, just so happens to have been born in China.”
ZTE, too, has complained that it’s the subject of discrimination.
“ZTE has set an unprecedented standard for cooperation by any Chinese company with a congressional investigation,” David Dai Shu, the company’s director of global public affairs, tells China.org. “ZTE equipment is safe.”
