US Probes Huawei, ZTE Spying Link

The US government has launched its latest sally against high-tech competition from China with a Congressional probe into the spying threat posed by Chinese telecommunications equipment makers including Huawei and ZTE.

The House of Representatives’ intelligence committee said the probe would look into “the threat posed by Chinese-owned telecommunications companies working in the United States, and the government’s response to that threat”, citing “serious national security concerns” about Huawei and ZTE in particular.

Lack of trust

The probe is the latest sign of the lack of a full sense of trust between the US government and Chinese high-tech manufacturers.

Agents of the Chinese government are already active in stealing US economic secrets, according to the committee, which said it wants to examine “to what extent” the use of Chinese-made telecoms equipment could aid in the espionage.

The committee “already knows the Chinese are aggressively hacking into our nation’s networks… and stealing secrets worth millions of dollars in intellectual property”, said committee chairman Mike Rogers, a former FBI agent, in a statement.

He said Huawei was at the centre of the investigation, but that the committee would also target other Chinese manufacturers.

“We are looking at the overall infrastructure threat and Huawei happens to be the 800 pound gorilla in the room, but there are other companies that will be included in the investigation as well,” Rogers stated. “The fact that our critical infrastructure could be used against us is of serious concern.”

He said American businesses should continue to hold back from using Huawei technology “until we can fully determine their motives”. He said US intelligence officials would be interviewed as part of the investigation.

Cyber-spying

A report from the Office of the National Counterintelligence Executive recently presented to Congress repeated the US government’s fears of cyber-spying on the part of Russia and particularly China.

“Chinese actors are the world’s most active and persistent perpetrators of economic espionage,” the report said.

Earlier this year Huawei was blocked from its attempt to buy US cloud computing company 3Leaf due to spying concerns.

Other countries are displaying less concern than the US about Huawei and ZTE, allowing the companies to post rapid growth. Huawei said its products have been deployed by 45 of the world’s 50 largest telecommunications service providers, including BT, which chose Huawei to supply a new network backbone.

Huawei hired the British government’s former IT chief John Suffolk as cyber security executive and has allowed GCHQ specialists to inspect its equipment.

The company has recently begun launching its first own-brand smartphones, focusing on the Western European market due to its lack of headway in the US.

The company recently invested £50m in London’s underground railway system.

Real concerns

The company has repeatedly denied links to China’s military and said it had nothing to hide from the probe.

“We acknowledge that network security concerns are very real and we welcome an open and fair investigation, whether by Congressional Committee or otherwise, focused on concerns raised by the interdependent global supply chain used by virtually every telecommunications equipment manufacturer providing solutions in the US and elsewhere,” Huawei stated.

ZTE has also launched its first own-brand handsets in the West and is working with BT on research and development projects.

“ZTE is wholly committed to transparency and will cooperate in addressing any inquiries regarding our business,” ZTE stated. “Our company is publicly traded with operations in more than 140 countries and we are confident a fair review will further demonstrate that ZTE is a trustworthy and law-abiding partner for all US carriers and their customers.”