Panel: China tech poses threat

American companies should avoid doing business with China’s two leading technology firms because they pose a national security threat to the United States, the House Intelligence Committee is warning in a report to be issued Monday.

The panel says U.S. regulators should block mergers and acquisitions in this country by Huawei Technologies Ltd. and ZTE Corp, among the world’s leading suppliers of telecommunications gear and mobile phones.

Reflecting U.S. concern over cyber-attacks traced to China, the report also recommends that U.S. government computer systems not include any components from the two firms because that could pose an espionage risk.

“China has the means, opportunity, and motive to use telecommunications companies for malicious purposes,” the report says.

The recommendations are the result of a yearlong probe, including a congressional hearing last month in which senior Chinese executives of both companies testified, and denied posing a security threat.

A U.S. executive of one of the companies said the firm cooperated with investigators, and defended its business record. Huawei is a “globally trusted and respected company,” said William Plummer, vice president for external affairs.

The bipartisan report is likely to become fodder for a presidential campaign in which the candidates have been competing in their readiness to clamp down on Chinese trade violations. Republican Mitt Romney, in particular, has made it a key point to get tougher on China by designating it a currency manipulator and fighting abuses such as intellectual property theft.

The committee made the draft available to reporters in advance of public release Monday. In a CBS report Sunday night on “60 Minutes,” the committee’s chairman, Rep. Mike Rogers (R-Mich.), urged American companies not to do business with Huawei.

The panel’s recommendations will likely hamper Huawei and ZTE’s ambitions to expand their business in America. Their products are used in scores of countries, including in the West. Both deny being influenced by China’s communist government.

“The investigation concludes that the risks associated with Huawei’s and ZTE’s provision of equipment to U.S. critical infrastructure could undermine core U.S. national-security interests,” the report says.

The report says the committee received information from industry experts and current and former Huawei employees suggesting that Huawei, in particular, may be violating U.S. laws. It says that the committee will refer the allegations to the U.S. government for further review and possible investigation. The report mentions allegations of immigration violations, bribery and corruption, and of a “pattern and practice” of Huawei using pirated software in its U.S. facilities.

 

Published by:

CWZ's picture

Name
Reza Rafati

Information
I am the founder of Cyberwarzone.com and I focus on sharing and collecting relevant cyberconflict news., The goal of Cyberwarzone is to provide the world a portal with global cyberwar information. The effort in getting this cyberwarfare information is hard. But as the internet is growing we need to get an global cyberwar & cybercrime monitoring system., By the people and for the people. We will be gathering information about Cybercrime, Cyberwarfare and hacking. LinkedIn: http://www.linkedin.com/pub/reza-rafati-%E2%99%82/1a/98b/197

Country
The Netherlands

My website
Cyberwarzone.com

Twitter:
http://twitter.com/#!/cyberwarzonecom