“Huawei and ZTE have failed to assuage the committee’s significant security concerns presented by their continued expansion into the United States,” the report said. “In fact, given their obstructionist behavior, the committee believes addressing these concerns have become an imperative for the country.”
The United States has become more vocal about the growing problem of economic cyber espionage, particularly by China. The U.S. intelligence community has publicly accused China of engaging in widespread cyber theft of corporate secrets. A report last fall by the Office of the Director of National Intelligence singled out “Chinese actors” as “the world’s most active and persistent perpetrators of economic espionage.”
Both firms, which are seeking to expand their business in the United States, have staunchly denied that they are influenced by the Chinese government or pose a security threat.
“The concept of a conspiracy in which Huawei would infect its own gear at the behest of some government would require thousands of our employees to be complicit with the conspiracy,” William Plummer, Huawei’s vice president for external affairs, said in an interview last week. “It is inconceivable.” The investigation, he added, is “a political distraction.”
At a hearing before the panel last month, ZTE Senior Vice President for North America Zhu Jinyun asked rhetorically whether ZTE would grant China’s government access to its equipment to conduct a cyberattack. “Let me answer emphatically — no!” he said. “China’s government has never made such a request. We expect the Chinese government never to make such a request of ZTE. If such a request were made, ZTE would be bound by U.S. law.”
The committee, led by Chairman Mike Rogers (R-Mich.) and Vice Chairman C.A. Dutch Ruppersberger (D-Md.), began its investigation in November after Huawei, the world’s second-largest vendor of telecom equipment, requested a formal investigation into allegations that it is linked to the Chinese military and a threat to U.S. national security.
The firm requested the probe in February 2011 after a federal panel, the Committee on Foreign Investment in the United States, blocked its purchase of assets from U.S. server technology firm 3Leaf.
The risk, the committee said, is that systems made in China can be tampered with in a way that can potentially aid the espionage effort. “Industry giants like Huawei and ZTE provide a wealth of opportunities for Chinese intelligence agencies to insert malicious hardware or software implants into critical telecommunications components and systems” sold in the United States, the report said.