Huawei says U.S. report will not harm its business in overseas markets

Huawei does not think that a U.S. government report that said both Huawei and fellow Chinese vendor ZTE pose a security risk because their equipment could be used for espionage will affect its business in other overseas markets.

"No, I don't think there will be an impact," Huawei's Senior Vice President Zhang Chunxiang told Reuters, responding to a question on whether its other overseas business would be affected. Huawei, the second-largest network infrastructure vendor after Ericsson (NASDAQ:ERIC), has had difficulty securing network infrastructure contracts with Tier 1 U.S. carriers.

Zhang said both sides of the dispute are still talking but that the report was a sign of U.S. trade protectionism. "They investigated for 11 months and they didn't consider all the different material supplied by Huawei and they still came to that conclusion," he said. "They investigated like they never investigated at all."

The report, from the House Permanent Select Committee on Intelligence, recommended the U.S. block acquisitions and mergers involving Huawei and ZTE and also recommended that the U.S. government and U.S. companies avoid using equipment from the two Chinese companies. Huawei and ZTE pushed back aggressively against the report's conclusions, and have repeatedly said they do not pose a security threat and have no ties to the Chinese military or government. The Chinese government has also denied the claims and  has suggested that the report could set back relations between the United States and China.

The U.S. market contributes single-digit percentages to both Huawei and ZTE's overall revenue; both companies have had greater success in getting U.S. carriers to buy their handsets.

For more:
- see this Reuters article

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