News / Asia

    China Rejects US Charges Telecoms Pose Security Threat

    A Huawei logo is seen above the company's exhibition pavilion during the CommunicAsia information and communications technology trade show in Singapore on June 19, 2012.
    A Huawei logo is seen above the company's exhibition pavilion during the CommunicAsia information and communications technology trade show in Singapore on June 19, 2012.
    Shannon Sant
    BEIJING — China has rejected a U.S. Congressional report accusing two major Chinese telecommunications companies of posing a security threat to the United States.
     
    The draft report from U.S. lawmakers said American companies should avoid doing business with China’s largest phone equipment companies, Huawei and ZTE, out of concern government influence over the companies could pose a security risk to the United States.
     
    Foreign Ministry spokesman Hong Lei rejected that claim, saying Chinese companies are not a security threat to the United States, as the report alleged.
     
    He said China’s telecom companies have developed their international business based on market economy principles. He said their investment in the United States embodies the mutually beneficial nature of Sino-American economic and trade relations. He said China hopes the U.S. Congress will set aside prejudices and respect facts.

    The Congressional report
     
    The Congressional report’s findings came after a nearly year long probe into the companies. The draft report cited industry experts and former Huawei employees alleging immigration violations by the company, bribery, corruption and industrial espionage.
     
    Huawei executives deny the allegations. They say the company has a very good track record in network security and would not engage in the illegal behavior described in the committee’s report.
     
    House lawmakers also warned that technology in Chinese-manufactured phone components could allow Beijing authorities to intercept high level communications, gather intelligence and shut down network systems during national emergencies.  
     
    During hearings into the issue last month, Jan Schakowsky, a member of the House Intelligence Committee, said the investigation raised many questions that remain unanswered, despite testimonies from senior executives of both ZTE and Huawei
     
    “I know that the Intelligence Committee asked for a number of pieces of information, that it’s been hard to get or it hasn’t gotten, so it’s been difficult to confirm or discredit some of the questions that have been raised,” said Schakowsky.
     
    The report said Huawei and ZTE did not provide documentation and detailed information on their corporate structure, financial arrangements and relationships with the Chinese government.
     
    The committee said the United States should block mergers and acquisitions with Huawei and ZTE and that the U.S. government should ban the use of any components made by the two firms in its computer systems.

    China's telecom giants

    Huawei has rapidly grown to become the world’s second largest telecommunication equipment manufacturer, with operations in 140 countries.  ZTE is the world’s fourth largest mobile phone maker.
     
    Huawei employs 1,700 people in the United States. Revenues there rose to $1.3 billion in 2011. But the Congressional report may limit both companies’ expansion in the domestic market.
     
    The report’s findings will likely also become an issue in the final weeks of the U.S. presidential campaign in which both candidates have said they will stop Chinese trade violations.

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    Comment Sorting
    Comments
         
    by: Valsor from: Mars
    October 10, 2012 12:21 AM
    Chinese government press releases are not to be trusted.

    by: Hosyo Gatoko from: Japan
    October 09, 2012 5:14 PM
    Chinese are treacherous stink people... America, do not trust these people!!! in Japan we know that the American democratic party is for sale... but beware who buys... China look at us and America as enemies... we hate them, and America be careful not to trust them...

    by: kaka from: Vietnam
    October 09, 2012 12:36 PM
    Any1 works with china will receive deficit, obviously, sooner or later

    by: john from: german
    October 08, 2012 10:54 PM
    Obviously, it is just a protectionism for their own firms, nothing more.
    In Response

    by: yisi from: China
    October 10, 2012 8:50 AM
    Is china become your enemy?
    In Response

    by: Hoang from: Canada
    October 10, 2012 6:29 AM
    Why don't German telecom company try going into China. It is not protectionism when China poses a security threat. How do you think China attain nuclear weapons?
    World war 2 is over. The U.S. is not the enemy.

    by: Habi from: Canada
    October 08, 2012 3:27 PM
    US should have the know-hows to identify specific security-related telecomm issues, why bother to set prejudice on Chinese companies? American should be more confident about its own technologies and know-hows instead of blow other competitors out of America. US and China should cooperate and talk more rather than just try to eliminate Chinese companies from America. If US doesn't pose a threat on China, why concern China threat so much?
    In Response

    by: Hoang from: Canada
    October 10, 2012 6:23 AM
    If you are a telecom company from the West, try going into China.
    You can't trust Chinese products.

    by: Keith from: California
    October 08, 2012 11:21 AM
    Nothing new. I can almost imagine that Space shuttle, Drone, & Jumbo jets soon to be made in China. Then we will finally learned that cheap Chinese contract will be very costly in terms of our children's future and security. Maybe it is already too late.

    by: nps_ca from: California
    October 08, 2012 10:50 AM
    Absolute BUNK by protectionist Washington. This has happened both under Republican and Democrat Administrations.

    Even the UK Signals Agency has FULL access to all source code from both and has deemed NO security issues.

    This is dumb politicians trying to grasp something they know nothing about. While the rest of the world deploys networks with both ZTE and Huawei we have to use other (NON US) vendors who charge an arm and a leg which means cell phone, DSL, Cable rates here reflect these higher charges.

    by: Hisham
    October 08, 2012 10:25 AM
    Anyone else think the title is confusing or makes no sense? Its at least missing a punctuation mark or something!
    In Response

    by: Chuck Spohr from: USA
    October 08, 2012 3:05 PM
    The headline would be fuller if the words "That" were before "Telecom" and "a" before "Security Threat."

    by: Swagat Acharya from: India
    October 08, 2012 10:24 AM
    Numerous other products which people use everyday, such as computers, cell phones and electronic equipment, are all made in China. The only difference is that these are owned by American firms. If these security threats did indeed exist then the United States surely has the know how to identify these and would have identified these specifically. The way I say it, this is just an excuse to prevent American firms from being eliminated by foreign competition. So much for capitalism.
    In Response

    by: BBB&T from: 33025
    October 08, 2012 11:13 AM
    They own a piece of everything in China. If you have a factory in China then the Gov owns you. Period. Besides they steal everything. I would not trust them as far as I can throw a bus.
    In Response

    by: Mitchel Eisenstein
    October 08, 2012 11:06 AM
    The point is, we dont mind capitalism when it actually is capitalism. In china, the marriage between capitalism and communism results in an attempt by the communist dicatorship to rule the world. Think of how horrible it is to have to live in a china of ONE VOICE, and if you dare to challenge the status quo you and your family are executed. No Swagat, we must challange the Chinese Government or this world shall be ruled by a ruthless, soulless dictatorship. Indian capitalism is more my style, despite the corruption.

    by: Alan from: Asheville, NC
    October 08, 2012 9:53 AM
    I saw the 60 Minutes segment and thought it the absurd dribble of a bunch of Washington paranoids.
    In Response

    by: yoko from: Japan
    October 08, 2012 5:10 PM
    Wow. So many 中人 trolls ... dont ostrichize your views. Look hard and at all facts before you. If any person here owns lets say a Dell, you KNOW youre electronically compromised. Espionage had been around long before time become BC/AD. I am glaf a govt would be worried for its people security. Anyone posting otherwise is anti-that particular country due to lining his own pockets. Live daily your best, be aware and deal -- and vote on issues that affect your life.
    In Response

    by: Hu Jintao from: your house, in china
    October 08, 2012 10:44 AM
    so says the chinese government troll with their incorrect and blatantly obvious chinese english grammer.
    give it up before you make a fool of yourself!
    In Response

    by: bob goodwin from: florence oregon
    October 08, 2012 10:18 AM
    during the olympics cell phones were at risk in china.
    the story is the phones can be turned on and emptied of thier data.
    if the chinese have long term plans commo security can be a target. i think its possible

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