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US report hurts long-term trade prospects

(China Daily)

08:20, October 23, 2012

The Intelligence Committee of the US House of Representatives issued a report claiming that Huawei and ZTE Corp (Photo/Xinhua)

From New York subway-train ads featuring its handsets to slick, national TV commercials introducing its name, China's Huawei Technologies Co has been working to raise its profile in the United States.

A recent congressional report, however, has drawn unwanted - and, Huawei says, unwarranted - attention to the world's second-biggest maker of telecommunications equipment.

On Oct 8, the Intelligence Committee of the US House of Representatives issued a report claiming that Huawei and ZTE Corp - another Chinese telecommunications-gear provider that has established an American presence - pose a threat to national security and "cannot be trusted".

At a hearing in September, the committee raised questions about Huawei and ZTE. Citing its own and others' investigations, the panel said it "took seriously recent allegations of backdoors, or other unexpected elements" that the two companies installed in their software at the request of the Chinese government as well as their business activities in Iran.

After a year-long probe, the committee recommended in its report that regulators block any acquisition or merger involving Huawei or ZTE, through the Committee on Foreign Investments in the US; advised the federal government against using equipment from the companies; and said American businesses should buy telecommunications equipment from other vendors.

Huawei's corporate senior vice-president, Charles Ding, and ZTE senior vice-president for North America and Europe, Zhu Jinyun, denied all of these allegations at the September hearing.

Much of the House committee's claims stem from the Chinese companies' links to the People's Liberation Army and the central government in Beijing, as well as complaints that it has stolen technology from competitors.

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