Huawei and ZTE refute spying allegations

By John Leonard
14 Sep 2012 View Comments

A US congressional panel examining the Chinese telecom firms Huawei and ZTE is concluding an investigation into whether the companies' equipment is a threat to US infrastructure and commercial confidentiality with a public hearing.

In statements to the House of Representative's intelligence committee, executives from the firms denied claims that their equipment could be co-opted for the purposes of espionage by the Chinese government when they appeared before the intelligence committee yesterday.

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"Huawei has not and will not jeopardize our global commercial success nor the integrity of our customers' networks for any third party, government or otherwise," senior vice president Charles Ding said in written testimony, according to Reuters.

ZTE's senior vice president for North America and Europe, Zhu Jinyun, also denied accusations that his firm had put back-door channels into its equipment.

"What they have been calling back doors are actually software bugs," said Zhu, likening them to the sort of vulnerabilities that cause Microsoft to issue patches on a regular basis.

In addition to concerns about their links to the Chinese Communist Party and military, Huawei and ZTE have been criticised by US lawmakers for allegedly stealing trade secrets from US companies, such as Cisco and Motorola.

The expansion plans of Huawei hit something of a wall in 2008 when it and Bain Capital were forced to give up a joint bid for 3Com after the Committee on Foreign Investment in the US (CFIUS) raised objections. It was also blocked from bidding for a contract for Sprint Nextel and forced to drop plans to buy assets from 3Leaf Systems, an US telecoms start-up, after CFIUS indicated its opposition.

Huawei, which is now the second-largest telecoms firm in the world, has also been blocked in other western markets such as Australia, where it was was barred from bidding for work on the National Broadband Network, and both Huawei and ZTE face restrictions in India. In the UK, meanwhile, Huawei's telecoms equipment is being examined for hidden back doors by GCHQ.

However, in talks on Tuesday with prime minister David Cameron, Hauwei's CEO, Ren Zhengfei, announced a UK investment and procurement deal worth £1.25 billion, with the potential to create 700 jobs.

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