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US intelligence panel investigates Huawei and ZTE over spying claims

The red menace rises
Fri Nov 18 2011, 14:17

CHINESE TELECOMS FIRMS Huawei and ZTE are facing a grilling from the US House intelligence committee about whether the firms' US expansion plans threaten the country's national security.

Huawei and ZTE have expressed desires to expand operations in the US, but for a long time the country's lawmakers have viewed the companies and in particular Huawei with suspicion, claiming they have ties to the Chinese military. Now the House intelligence committee will pursue an investigation of whether Huawei and ZTE's expansion plans in fact pave the way for the Chinese government to spy on Americans.

Dutch Ruppersberger, the top Democratic Party congressman on the panel managed to do a pretty bad job of hiding his bias going into the investigation, saying, "The Chinese are aggressively hacking into our nation's networks, threatening our critical infrastructure and stealing secrets worth millions of dollars in intellectual property from American companies, ... This jeopardizes our national security and hurts US competitiveness in the world market." It seems that Huawei and ZTE will have to try to convince the lawmakers that they are not guilty simply by being Chinese.

Huawei told Bloomberg that it welcomes "an open and fair investigation", while ZTE said, "ZTE is wholly committed to transparency and will cooperate in addressing any questions regarding our business."

Huawei's plans in the US have suffered considerably as the US government has repeatedly blocked moves by the firm to acquire other companies in the country's telecoms industry. Following years of requests, Huawei finally disclosed its board members to try to shake off persistent allegations that it is nothing more than a branch of the Chinese military.

Both Huawei and ZTE trade in many countries and Huawei in particular has won several 4G network contracts in Europe, beating out established players like Alcatel-Lucent and Nokia-Siemens. With this latest US congressional investigation underway, it is unlikely that either Chinese outfit will get any significant US telecoms contracts soon. µ


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