ZTE, China warn of US trade relations risk

ZTE and the Chinese government have both taken their turns to respond to the US House Intelligence Committee report claiming that equipment from Chinese vendors poses a potential security risk.
 
China's commerce ministry and foreign ministry have responded to the report, with the former warning that the report risks harming trade relations between the US and China, Wall Street Journal reported
 
A spokesperson for the commerce ministry also asserted that the report violates USA's “long-held free-market principles,” and is full of groundless and subjective conjecture.
 
ZTE, while still firmly denying that use of its equipment poses a security risk, has taken a more measured tone in its public response compared to the response proffered by Huawei earlier this week.
 
David Dai Shu, ZTE's director of global public affairs, challenged the premise of the report. “It is noteworthy that, after a year-long investigation, the Committee rests its conclusions on a finding that ZTE may not be ‘free of state influence’,” he said.
 
“This finding would apply to any company operating in China. The Committee has not challenged ZTE’s fitness to serve the US market based on any pattern of unethical or illegal behavior.”
 
In its response, ZTE suggested that the committee erred by not also including Western vendors in the probe.
 
“Given that virtually all US telecom equipment is produced in China, in some measure, the Committee’s narrow focus addresses the overall issue of risk to US telecom infrastructure so narrowly that it omits... the suppliers of the vast majority of equipment used in the US market,” the statement reads.  
 
ZTE said it has suggested a solution to the committee's concerns based on a trusted delivery model, whereby the vendor transfers hardware, software, firmware, and other structural equipment to an independent third-party threat assessment laboratory with US government agency oversight.
 
The vendor noted that the committee has some reservations about this model, but has not ruled out a solution on these lines.

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