China's Huawei and ZTE pose national security threat, US Congress report says

Featured - October 8th, 2012

A probe on Chinese network equipment makers is set to take off after a draft report released Monday by a US Congress committee claimed the two companies pose a threat to US national security, underlining the mounting trade disputes between US and China, Reuters reports.

The US House of Representatives’ Intelligence Committee accused Huawei Technologies Co Ltd and ZTE Corp of bribery and violations of US immigration laws. According to the draft report, the companies brought in employees on the wrong kind of visas and paid bribes to gain contracts.

Both companies were linked to the Chinese military and are seeking to infiltrate vital western infrastructure. “The Committee also received internal Huawei documentation from former Huawei employees showing that Huawei provides special network services to an entity the employee believes to be an elite cyberwarfare unit within the PLA [People’s Liberation Army],” the report says.

Huawei denied such accusations. “Huawei is a globally trusted and respected company … The security and integrity of our products are world proven. Those are facts, political agendas aside,” Huawei spokesman Scott Sykes told the FT. ZTE said in a letter sent to the committee that it “profoundly disagrees” with claims that it is run by the Chinese government.

Chinese foreign ministry spokesman Hong Lei urged the US to “set aside prejudices”.

“Chinese telecoms companies have been developing their international business based on market economy principles. Their investment in the US embodies the mutually beneficial nature of Sino-American economic and trade relations,” Hong told Reuters.