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Politics, not security, behind Huawei, ZTE allegations, say analysts

China's Huawei and ZTE pose security threats to the U.S., according to an upcoming report from a U.S. congressional committee

By Michael Kan
October 8, 2012 05:25 AM ET

IDG News Service - A year-long investigation by a U.S. congressional committee has reportedly concluded that Chinese telecommunication equipment vendors Huawei Technologies and ZTE pose a security threat to the nation, and the committee is advising U.S. firms to buy networking gear from other vendors. But analysts say the committee's investigation is motivated more by politics, while doing little to safeguard U.S. telecommunication networks.

The U.S. House Intelligence Committee is scheduled to release a report on its investigation on Monday. It made its conclusions after finding that both Huawei and ZTE could be influenced by the Chinese state government to undermine U.S. security, according to media reports. The committee has also recommended the U.S. block any attempts by the two companies to make acquisitions or mergers in the country, and has encouraged U.S. private firms to consider the security risks in doing business with Huawei and ZTE for equipment or services.

The investigation's findings could tarnish the reputations of both Huawei and ZTE, which have faced repeated accusations that the companies' equipment could be used by the Chinese government to spy on U.S. telecommunication networks.

In an interview on CBS News' show 60 Minutes aired on Sunday, chairman of the committee and U.S. representative Mike Rogers said, "If I were an American company today ... I would find another vendor if you care about your intellectual property, if you care about your consumers' privacy, and you care about the national security of the United States of America."

While Huawei and ZTE have yet to receive the report, both companies have repeatedly defended themselves from allegations that they pose security risk, while trying to assist with the committee's investigation. Last month, representatives from Huawei and ZTEappeared at a hearing with the House Intelligence Committee, and denied any ties with the Chinese government, stating that their companies would never sabotage a customers' network.

"The security and integrity of our products are world proven," said Huawei spokesman Scott Sykes, citing how the company has done business in almost 150 markets with more than 500 telecommunication operators. "Those are the facts, political agendas aside," he said in an email.

ZTE spokesman David Dai Shu said the company would offer comment once the congressional committee's report is released. A ZTE letter addressed to the committee on Sept. 25, however, questioned why ZTE was the focus of the committee's investigation, when larger Western telecommunication equipment vendors were also manufacturing their equipment in China.

"By way of example, ZTE's U.S. telecom infrastructure equipment sales last year were less than $30 million. In contrast, two of the larger Western vendors alone had US sales in excess of $14 billion," the letter said. "ZTE has suggested, respectfully, that the scope of the Committee's inquiry is too narrow to fully protect US national security."

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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