News / Asia

Congressional Warning on Chinese Telecoms Could Prompt Retaliation

Bill Plummer, Huawei's vice president for external affairs in the US speaks on Capitol Hill in Washington, October 8, 2012
Bill Plummer, Huawei's vice president for external affairs in the US speaks on Capitol Hill in Washington, October 8, 2012
Analysts say this week's U.S. congressional report that called two Chinese telecoms a threat to national security is likely to prompt China to retaliate against U.S. businesses.

The House Intelligence Committee report warned U.S. companies against doing business with China's largest phone equipment companies, Huawei and ZTE.

Released Monday, the bipartisan report said the telecom giants could use their equipment to spy on the U.S., citing what it described as "a close relationship" with China's Communist Party.

Retaliation

So far, Beijing has only issued stern complaints about the report in official press briefings and state media editorials. But analysts say more moves are likely to come.

"I think it would be surprising if there wasn't retaliation," says Stan Abrams, a Beijing-based corporate IT lawyer. "It might not be tomorrow or next week, but at some point, something will happen and it will be to the detriment of U.S. companies."

Abrams, who is also a foreign investment law professor, told VOA that China's government has a reputation for responding in kind when a country makes a decision it views as antagonistic.

"China's foreign policy and its economic policy in terms of other countries is all about reciprocity. They're very much into a reciprocal type arrangement with other nations," Abrams said.

Consequences

Observers say the stakes are large, and could affect U.S. tech firms that the Commerce Department estimates sold $20 billion in advanced technology to China last year alone.

One U.S. business that could be affected is network equipment company Cisco, a competitor of Huawei that has relied on China for sales. The California-based company this week cut ties with ZTE, saying an internal investigation led it to believe the Chinese firm had re-sold Cisco equipment to Iran in violation of U.S. sanctions.

But Patrick Chovanec , a business professor at Tsinghua University, tells VOA it is tough to say how China would retaliate, given its already restrictive stance toward foreign investment.

"Perhaps they can tighten that up, and perhaps they may selectively retaliate in order to send a signal. But that's really just a continuation of policies that have already existed that prohibit foreign companies and American companies from competing on an even playing field in China," Chovanec said.

Others say that China could also respond indirectly by failing to make progress on other unrelated trade issues that have angered Washington, including currency valuation and intellectual property rights.

Trade war

But analysts do not expect a trade war between the U.S. and China, the world's two largest economies, since China relies on U.S. technology for its infrastructure and U.S. companies depend on Chinese components for their products.

Abrams says he thinks the issue will eventually die down, not least of all because China's Communist Party is busy working on putting the finishing touches on a sensitive once-a-decade leadership transition.

"I don't think China will complain about it for very much longer," he says."China right now has much bigger fish to fry and much bigger domestic concerns."

You May Like

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

US Secret Service Head: White House Security Lapse 'Unacceptable'

Julia Pierson faces tough questions from lawmakers after a recent intrusion at the White House: 'It is clear that our security plan was not executed properly' More

Frustrated, Liberian Students Want Ebola Fight Role

Thousands have volunteered to go to counties, rural villages to talk to people in their language about deadly virus More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Malaysia Struggles to Stop People Joining Jihadi
X
Mahi Ramakrishnan
September 30, 2014 2:16 PM
Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid