House Intelligence probe targets Huawei, ZTE over national security concerns

A powerful House intelligence committee has launched an investigation into whether the increased presence of Chinese vendors Huawei and ZTE in the U.S. infrastructure market will provide "the Chinese government an opportunity for greater foreign espionage." The probe is the latest indication of official U.S. government opposition to the companies gaining a foothold in the market.

In a joint statement, Reps. Mike Rogers (R.-Mich.), chairman of the House Permanent Select Committee on Intelligence, and Dutch Ruppersberger (D.-Md.), the panel's top Democrat, said that a preliminary review of the issue "suggests that the threat to the supply chain constitutes a rising national security concern of the highest priority."

"This investigation will review the extent to which these companies provide the Chinese government an opportunity for greater foreign espionage, threaten our critical infrastructure, and further the opportunity for Chinese economic espionage," the statement said. "The committee will also review whether the United States government--including the collection resources of the intelligence community--are appropriately focused on discovering the full scope of the Chinese threat and developing mitigation measures to ensure the security of our nation's telecommunications networks."

The statement drew a shark rebuke from the Chinese Foreign Ministry as well as the companies, which have long denied ties to the Chinese government and military and have argued they pose no national security threat. Chinese companies operate "totally on market principles" and China hopes the U.S. won't "politicize" economic relations, Foreign Ministry spokesman Liu Weimin said, according to Bloomberg.

Huawei spokesperson William Plummer told the BBC that the company--the second largest equipment vendor in the world--delivers equipment to 90 percent of the top 50 telecommunications service providers and that there has been "zero security incidents" with any of them. ZTE said in a statement that it is a publicly-traded company committed to transparency and is confident that "a fair review will further demonstrate ZTE is a trustworthy and law-abiding partner for all U.S. carriers and their customers."

The latest tension between the U.S. government and Huawei and ZTE came after ZTE, in a stark reversal, said it will not abandon plans to try and enter the U.S. network infrastructure market with Tier 1 carriers. "Although we have been blocked by the U.S. government, we just can't give up breaking into the U.S. market because its size is huge and per-capita spending is high," Richard Ye, senior director of wireless-product operations, told Dow Jones Newswires this week.

Last month the U.S. Commerce Department decided to block Huawei from participating in the construction of a nationwide, interoperable public-safety LTE network. The government said the decision was based on national security and declined to elaborate. Huawei has since been pushing back strongly against the decision.

For more:
- see this statement (PDF)
- see this Bloomberg article
- see this BBC article

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