Huawei Technologies Co. Ltd. and ZTE Corp., China’s two biggest makers of telecommunications equipment, are facing intense scrutiny thanks to a US House Intelligence Committee report. Speaking on 60 Minutes, Committee chairman Mike Rogers urged businesses to "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." The report is the result of an 11-month fact-finding mission, and will be officially released at a Monday morning press conference, although some news organizations have managed to get an advance look.
"Cannot be trusted to be free of foreign state influence"
According to Reuters, which received a copy of the draft, the crux of the recommendation is the two companies’ failure to provide documents that detail their relationships and regulatory interaction with Chinese authorities. Presumably, the fear is that Huawei and ZTE will could somehow build backdoors into their routers and switches, leaking sensitive information to Chinese government and industry. The report also found "credible" reports of immigration violations, bribery, and corruption at the two companies, reports Bloomberg.
Both Huawei and ZTE are vociferously denying any risk of impropriety, even under an imagined compulsion by the Chinese government to use their products for espionage. ZTE points out that its US sales are so small ($30 million) as to be insignificant from a security standpoint, and argues that the Committee should broaden the scope of its investigation to include "larger Western vendors."