The House Intelligence Committee has advised U.S. companies to avoid business dealings with two major Chinese technology companies due to espionage concerns.
The companies, Huawei Technologies Ltd. and ZTE Corp. which are among the world's leading suppliers of telecommunications equipment and mobile phones, were named in a report
released by the committee Monday.
Huawei, the largest manufacturer of telecom equipment in the world, was profiled Sunday by CBS
’ 60 Minutes news program. The show explored the alleged links between the company and the Chinese government.
“If I were an American company today, and I'll tell you this as the chairman of the House Permanent Select Committee on Intelligence, and you are looking at Huawei, I would find another vendor if you care about your intellectual property, if you care about your consumers' privacy, and you care about the national security of the United States of America,” Rep. Mike Rogers, R-Mich., said in an interview on the program.
The intelligence committee’s concerns center around the potential for cyber espionage, including disruption of U.S. communications networks. A former employee for the U.S. State and Commerce departments told the news program the United States should view telecom as a strategic sector akin to aircraft or computers.
Officials from both companies testified before the committee that both firms had no ill intentions and were merely interested in expanding their U.S. business, with a Huawei representative stating the company had no ties to the Chinese government or military.
But experts on China have asserted that ties do exist, noting previous contracts with the country’s People’s Liberation Army.
The committee report released Monday said Huawei’s “assertions denying support by the Chinese government are not credible.” Both companies were dinged in the report for disregarding intellectual property rights, among other allegations.
The investigation into Huawei began in November, after the company in February denied security concerns.
“Despite hours of interviews, extensive and repeated document requests, a review of open-source information, and an open hearing with witnesses from both companies, the committee remains unsatisfied with the level of cooperation and candor provided by each company,” the report said. “Neither company was willing to provide sufficient evidence to ameliorate the committee’s concerns. Neither company was forthcoming with detailed information about its formal relationships or regulatory interaction with Chinese authorities. Neither company provided specific details about the precise role of each company’s Chinese Communist Party Committee. Furthermore, neither company provided detailed information about its operations in the United States.
“Huawei, in particular, failed to provide thorough information about its corporate structure, history, ownership, operations, financial arrangements, or management.” - Eric Johnson