Cisco's Chambers downplays danger of trade war over Huawei

IDG News Service - The U.S. and China are likely to resolve the conflict over potential security threats from Huawei Technologies' network equipment without a trade war, Cisco Systems chairman and CEO John Chambers said on Tuesday.

A U.S. Congressional report released last month said Huawei products could threaten national security because they are vulnerable to malicious attacks and cyberespionage. The report repeated ongoing allegations that the company has strong ties to the Chinese government. Huawei has defended the security of its products and said it has no government ties, and China's commerce minister reportedly has condemned the report.

Cisco consistently calls Huawei its chief rival, but on a conference call on Tuesday to discuss his company's first-quarter financial results, Chambers downplayed the confrontation. Chambers said the chances of the disagreement leading to a trade war were "very low."

"I think you'll see the two sides work it out, because it's in the best interests of the world to do that, and both economies," Chambers said. The disagreement has put pressure on Cisco in China, he said.

Chambers also distanced Cisco from last month's report, refuting reports that the Congressional panel was doing Cisco's bidding. "We did not have anything to do with that, nor would we have done that," Chambers said.

"It's very important that the issues involved here are not between countries," Chambers said. Instead, he emphasized strong competitive language against the company.

"We are out-executing Huawei on many fronts at the same time," Chambers said. As in past comments, he said Cisco offers a better total architecture, services and long-term cost of ownership than Huawei and other rivals.

Awareness of security issues is also helping Cisco, he said, possibly taking a dig at the allegations against Huawei. "We don't give our code to anybody, not even our own government," Chambers said.

Chambers also said he sees ZTE, China's second-largest networking company, as more a partner than a competitor. Cisco is open to expanding partnerships with ZTE in the future, he said. Cisco is committed to China for the long term, he said.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com