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Chinese electronics firms Huawei and ZTE represent a potential threat to U.S. national security, according to a draft congressional report. The report from the U.S. House of Representatives' Intelligence Committee follows an 11-month investigation into the firms. A draft seen by Reuters suggests that the companies may be  subject to the influence of the Chinese government, thus representing a possible espionage threat.

Much of the panel's conclusions are drawn from Huawei and ZTE's failure to deliver documents relating to their interactions with the Chinese government. The panel said it also received evidence from "industry experts and current and former Huawei employees" suggesting corruption, bribery and copyright infringement at Huawei in particular.

The document states that Huawei and ZTE "cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems," and that "U.S. network providers and system developers are strongly encouraged to seek other vendors for their projects."

Speaking on CBS's "60 Minutes," committee chairman Mike Rogers said U.S. companies should "find another vendor if you care about your intellectual property; if you care about your consumers' privacy and you care about the national security of the United States of America."

In addition to Android smartphones, both ZTE and Huawei produce networking equipment such as routers. Though the U.S. represents a small quantity of their overall business, the companies are looking to rapidly expand within the U.S., particularly where smartphones are concerned. The Reuters report does not specifically mention whether networking equipment alone is suspected, or whether smartphones, too, could make up part of the alleged espionage threat.

In statements given to Reuters today, Huawei and ZTE deny the committee's allegations. Huawei dismissed the accusations as "baseless" and a "dangerous political distraction," while ZTE says it "profoundly disagrees" with the panel's conclusions.

The full report is due to be released later this morning.

Source: Reuters

 

Reader comments

Huawei and ZTE a risk to national security, says U.S. Congressional report

41 Comments

I think the real story here, is the dire state of the US economy, and the desperate tactics to try and convince Americans to buy American manufacturerd tat instead.

Soooo....the US is attempting to sell more American-made phones? I guess we can expect to see a report today expressing security risks for Samsung, HTC, Kyocera, LG, etc. The report will likely say that iphones are the only products allowed, right? No offense, but that's a rather short-sighted comment.

How about this...unless you live under a rock, China is WIDELY known to permit (and even encourage) widespread copyright infringement and theft of intellectual property in an effort to catch up on years of tech advancements other nations have created. This report is saying that ZTE and Hauwei are refusing to comply with requests for documentation stating their relationships with the Chinese government that widely permits these behaviors. Not to mention the constant cyber-attacks on American companies and government agencies, which evidence has shown is led by the government?

And the US government issues warnings because they only want to sell American products...riiiight.

Aaand the concern is about 4G wireless networks which no US company makes sooo the best hypocrisy the Americans can come up with is the to make people buy Swedish equipment?

I'm not entirely sure you know what a "play on words" is. Try reading the original comment and then read my comment. You see what I did there? Its called a "play on words".

Get it? No. I know what hypocrisy means, it was a joke.

It's not saber rattling. Signals intelligence is a legitimate job of the US Federal government. Unlike wealth redistribution, toilet water use monitoring and forcing you at the point of a gun to buy health insurance (well, except for their buddies).

Let's see here...Huawei and ZTE refuse to provide documentation regarding the state of their relationship with the Chinese government. Both companies have been alleged to have "backdoors" in their tecomms equipment, which both companies deny ( http://www.theinquirer.net/inquirer/news/2205654/huawei-and-zte-deny-bac... ). Yet in February Huawai was BRAGGING about their ability to infiltrate us communications networks ( http://www.wnd.com/2012/06/china-tech-company-admits-hacking-u-s-telecoms/ ) and then in May security researchers actually discovered backdoors in devices manufactured by ZTE ( http://www.zdnet.com/researchers-find-backdoor-on-zte-android-phones-304... ).

Do you really think that this isn't tied to national security? Nobody in the world devotes more effort into infiltrating American corporate and government systems as the Chinese government and state-backed companies. Espionage and theft of U.S. companies' intellectual property by Chinese nationals both in the U.S. and abroad is absolutely rampant. Most major technology companies have a presence in China, but they make sure to keep operations as separate as possible in order to protect trade secrets. Executives from most U.S. companies can't even take their usual corporate phone or laptop computer with them, for fear of having company secrets compromised. They have to have special hardware that is used ONLY for trips to China and ONLY for non-confidential communications.

Think we're paranoid? Australia recently banned ALL Chinese tech companies from participating in bids for government networks. It's not just the United States.

Sure, the Chinese government is going to cry foul, and yeah, the cheerleaders of Chinese business in the united states are going to cry and act all butthurt over it, but they reap what they sow. They've spent decades stealing trade secrets from American companies, and now the government is calling them on it and suddenly they're offended.

What exactly do they think their devices are doing? If they are 'spying' on users with some sort of hardware or software add-on then surely there is evidence of this, if not them what's the problem exactly?

The problem with this is they want Huawei and ZTE to release information about their relationships with the United States. I doubt that the United States would want Google, Apple, or Microsoft revealing sensitive information dealing with their relationships with the U.S. It is shameful that this would come out and is another example of old people with old ways of thinking trying to make sense of the "INTERNETS"

Exactly jate322, I was just going to recommend that to all who have not watched the segment. Watch it, and form your opinion after.

Exactly. There is real evidence that there is direct Chinese government influence at Huawei and the Chinese government has a track record of using companies to do their espionage. They weren't talking about smart phones, they were talking about 4G networks. Huawei is one of only a couple of companies in the world that make 4G wireless networks. If a communist government that is our main economic rival has access to a whole network of information, including every single conversation, text,email,and internet usage,than yes, this is something to be concerned about.

And to those claiming this is just an attempt to make people buy American, there are no American companies that make and install 4G networks.

(Posted after watching the 60 Minutes segment)

Yeah, the Republican and the Democrat were in agreement on this. It's not a political issue, it's a security issue. Huawei is not an "open book" like the American Huawei rep said; they could certainly be more open/public about their operations and relationship to the Chinese government. Seriously, there's a government committee based INSIDE HUAWEI'S HEADQUARTERS.

I'm glad to hear Sprint didn't use Huawei to build their new network 2 years ago (presumably 4G WiMAX, considering the timing). Come to think of it, I don't think Sprint carries Huawei devices, either.

This is why I buy and use technology from companies I trust (Google, HTC, and possibly Asus in a few months; I trust Mozilla the most, but Chrome is faster).

Glad you had a chance to watch the segment. From what I recall last night, Sprint was going to use them as a Vendor for their new 4G LTE Network.

What about USAID and direct investment in development of Russian "democracy"? The Sleaziness is so obvious that you can cut it with the knife!

This is so biased, and totally political. Based on this kind thinking, then i can say that Microsoft, Google and Apple are the risk to every single country's national security on this earth expect the USA.

What kind of thinking is that? The kind where you make a conclusion without hearing any evidence? Read the Reuters report or watch the 60 Minutes segment and you'll change your tune.

Congress decides that a couple of electronics outfits are fronts for the Chicoms because they didn't provide documents to prove otherwise, when the NSA and the 16 other intelligence outfits slurp up everything sent through the US telecommunications network. Pots, kettles etc.

oh the key word I left out was illegally, until the US graciously let them off the hook. Is there any difference between the US and/or Chinese government snooping?

They are right. in fact china now is making aggresive moves against Japan, The Philippines, Vietnam and almost all of the southeast asian nations. china is grabbing all the territory it could get. based on their "DREAM MAPS". its not just about phones.

Im not from the U.S... but you can't TRUST china. just read the news. its better safe than sorry. be safe everyone.

China has a history of having companies do their espionage work for them - America just has drones and military do it.

Still hypocritical.

+1. Mention the word "Congress" and everything turns political. I'm gonna go watch the 60 Minutes segment so I know what I'm talking about before I say anything more.

If the US has a problem then why do they Build out a standardized 4G network and have it subsidized but the Carriers that way they get to spy on the US taxpayers like they wanted and not have the Chinese do.

Honestly, can you really not see the difference between a US corporation gathering marketing data about US users and a foreign corporation with possible ties to their government gathering data on US soil?

no but im sure the NSA would love it more if the US goverment build it and i bettter get a major discount on my bill is all im asking for. i know that what i do on my smartphone and online all the companies want to know too bad its nothing interesting thou.

I think people are forgetting one key fact, the Chinese government is not our friend. They continually perpetrate acts of electronic espionage against the US and her allies and are known to influence companies in their own borders. They will stop at nothing to gain the advantage against key members of the international community, be that by stealing secrets via physical spying or electronic means such as possibly using back doors in these companies networking equipment. They may not be committing acts of espionage right now but whose to say they aren't in an effort to gain the trust needed to gain access to key areas in the US and then little by little wreck havoc...

If you'd like your data collected by the Chinese government, PRESS 1

If you'd like your data collected by the US government, PRESS 2

If you'd like your data collected by a multi-national corporation, PRESS 3