As more and more of the electronics we use every day are made by Chinese manufacturing firms, is America being put at risk? That's what a new 52-page report by the U.S. House of Representatives' Intelligence Committee claims, citing security concerns about Huawei and ZTE, two top Chinese electronics companies that are trying to make inroads in the United States.
The investigation lasted 11 months and lawmakers didn't like what they found. Speaking to CBS's 60 Minutes, Michigan Representative Mike Rogers said that U.S. businesses that work with Huawei should "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."
60 Minutes' examination of the issue is embedded above.
The Intelligence Committee's report alleges that the companies may engage in bribery and copyright infringement, and neither supplied documentation when the committee asked for details to help alleviate concerns that technology from the two companies could be used by the Chinese government to engage in espionage and spying. From CNN, which had access to the draft report:
"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."
The report doesn't include any smoking guns, but Huawei and ZTE's reluctance to respond to the inquiries lead the committee to recommend that law enforcement agencies should further investigate the matter, while further suggesting that the U.S. government should block any acquisitions or mergers by ZTE and Huawei on U.S. soil and ban the use of their technologies in government systems.
But is the threat real or xenophobic political wrangling? Huawei spokesman William Plummer told Reuters that the allegations are "Baseless," while a Huawei statement says that "The United States is a country ruled by law, where all charges and allegations should be based on solid evidence and facts. The report conducted by the House Permanent Select Committee on Intelligence (the Committee), which took 11 months to complete, failed to provide clear information or evidence to substantiate the legitimacy of the Committee's concerns."
The statement goes on to list the ways in which Huawei worked with U.S. investigators, but says that "despite our best effort, the Committee appears to have been committed to a predetermined outcome." The Congressional report comes just days after Huawei was reported to be considering an IPO.
A ZTE statement also disagreed with the thrust of the report and said that a proper security investigation should also include Western technology vendors. However, this morning Reuters also reported that Cisco ended a long-term partnership with ZTE after it investigated reports of the Chinese company selling Cisco switches to Iran despite the parts being subject to U.S. sanctions. The FBI is also investigating the issue.
Given the report's lack of concrete evidence, however, U.S. citizens are left wondering: are Huawei and ZTE a legitimate threat or just the victims of complex political chess moves in an election year that places a strong focus on the national economy and its reliance on China?
Image via Huawei