Huawei deputy invites US scrutiny

Huawei’s deputy chairman has launched a PR offensive in the US, explaining why the firm backed out of the acquisition of 3Leaf and seeking to clear up rumors that have stymied his firm’s progress in the market for the past decade.
Ken Hu said fighting a recommendation from the US Committee of Foreign Investment (CFIUS) to abandon its $2 million (€1.4 million) 3Leaf acquisition would have taken up too many resources, despite believing the firm had satisfied all relevant US standards regarding the purchase.
“[T]he significant impact and attention that this transaction has caused were not what we intended,” Hu explained in an open letter.
Hu also used the statement to address “a number of misperceptions” US authorities hold about the Chinese vendor, including its policy over Intellectual Property Rights, links to the Chinese military and state aid.
He re-iterated previous denials of any links to the military beyond the fact founder Ren Zhengfei served in the army prior to establishing Huawei. However, he noted that Ren had eventually held the equivalent of a civilian role within China’s military, and quit the army several years before establishing Huawei in 1987.
Hu conceded the firm has received state financial aid in the form of tax breaks on research and development of new technologies. The firm received 593 million Yuan (€65 million) in 2010, but Hu says the payments are no different to those made by several governments around the world.
Furthermore, the R&D tax incentives do not imply links to the Chinese government that could pose a security risk to other nations, Hu noted, referring to concerns that saw it excluded from a lucrative Sprint Nextel 4G tender last year.
“The allegation that Huawei somehow poses a threat to the national security of the US has centered on a mistaken belief that our company can use our technology to steal confidential information or launch network attacks on entities in the US at a specific time,” he said.
Hu said Huawei hires independent, third party security companies in the US to audit its products, and said it was willing to work with the government to prove the security of its products.