Latest News:  
Beijing   Sunny    21 / 12 ℃  City Forecast

English>>China Business

Commentary: Telecom sector not in trouble

By Mei Xinyu (China Daily)

16:00, October 19, 2012

The telecom equipment manufacturing industry is the pride of China. Chinese enterprises are surpassing their foreign counterparts in the technology-intensive and capital-intensive industry. China's telecom equipment manufacturing sector has gained advantage in the fiercely competitive market and attracted globally reputable companies.

Huawei and ZTE had been the world's second and fifth largest telecom equipment makers for years. But after Huawei's sales revenue touched 102.7 billion yuan ($16.07 billion) in the first half of this year, it overtook Sweden's Ericsson to become the world's largest telecom equipment maker.

The development path of China's telecom equipment manufacturing industry, however, is becoming increasingly problematic, both economically and politically. Fearing that China would challenge its hegemony, the United States has dealt one blow after another to Chinese telecom equipment makers. As a result, Huawei and ZTE cannot function in the US market freely.

In 2008, the US used national "security concerns" to derail Huawei's proposal to join hands with Bain Capital, a politically reputable equity company, to acquire 3Com. Similar designs prevented the Chinese company from acquiring the wireless network division of Motorola. In 2010, Sprint Nextel excluded Huawei and ZTE from a contract worth billions of dollars, again because of Washington's "security concerns".

The US also prohibited Huawei from participating in the construction of its National Emergency Communications Network and stopped it from buying part of the assets of American computer company 3Leaf Systems. And on Oct 8, the Intelligence Committee of the US House of Representatives issued a report that said: "Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems." The report recommends that US regulators block mergers and acquisitions by Huawei and ZTE in America and that US government computer systems not include any components from the two companies. The reason: Huawei and ZTE equipment can be used to send information to China through remote control.

Given the importance of the US' market in the global economy, Washington's move would create political risks for Chinese telecom equipment makers in other overseas markets, even though the accusation that the two Chinese companies pose a security threat to the US is untenable.

【1】 【2】 【3】

News we recommend:
Let the train, take the strain Personal care market to keep growing An Apple a day isn't keeping critics away
Global companies expand rapidly in China Shanghai's 'other' market China's tourism industry reaps golden harvest
Commentary:Asking the right questions  More Investment, More Woes? All that glitters is gold


Leave your comment0 comments

  1. Name


Selections for you

  1. South China Sea Fleet in training

  2. Airmen repair radar antenna

  3. N. Korea's Kim attends event

  4. Same-sex wedding performed in Fujian Province

  5. Naked truth challenges values

  6. Largest Apple store in Asia on Wangfujing

  7. Feng shui, pilosophy or sham?

  8. Funny pictures by Chinese net friends

Most Popular


  1. Experts on touch-and-go landing on the Liaoning
  2. There is no justification for street violence
  3. Tokyo shrine visit angers neighbors
  4. BRICS can build optimism
  5. Rich list shines a light on China’s shifting economy
  6. Indigenous industry key to change
  7. Miners must break ground overseas
  8. 2nd US debate sees candidates flex China muscle
  9. Romney's post-debate bounce could soon fade
  10. New road rule marks first step to orderly society

What’s happening in China

Food poisoning sickens over 100 students

  1. Survey shows Chinese workers stressed out
  2. Retiring can cause more quarrels, divorces: court
  3. Training center for helicopter pilots opens
  4. Young migrant workers targeted in phone scams
  5. Microblog helps Chinese girl regain father's wages