Global markets pose global security risks

The US House intelligence Committee (HIC) fears that the Huawei Technologies and ZTE - China’s biggest phone-equipment makers - pose security risks to the US telephone infrastructure.

“There is a reason to question whether the companies are tied to the Chinese government or whether their equipment is as it appears,” said Representative Mike Rogers, at a HIC hearing which examined testimony given by both organisations.

Representative Rogers felt that the position of the two companies meant that it would be all too easy for Chinese intelligence agencies to secret have hardware and/or software built in to critical telecommunications components and system.

Both ZTE and Huawei Technologies have petitioned congress for increased access to US telecoms markets. And complained that they are facing barriers to market entry based on concerns over espionage and security. Both organisations deny there are any realistic dangers
It would be “immensely foolish” for Huawei to risk involvement in espionage, Corporate Senior Vice

President Charles Ding said in testimony to the US Congress.
Zhu Jinyun, the ZTE  senior vice president for North America and Europe insisted that ZTE would never allow the Chinese government access to their equipment.

These statements to Congress are part of a much more public attempt by the Chinese corporations to counter the suspicions of the US intelligence community linking them to alleged cyber-espionage by the Chinese government.
The hearings are seen by industry insiders as being crucial to the future expansion of the Chinese companies.

The HIC asked if Huawei and ZTE – both of which are listed on the Hong Kong stock exchange – if they were funded by  the Chinese government or have connections with Chinese government officials.

Ding however insisted that Huawei was owned by its employees and that the Chinese government had no influence over Huawei’s daily operations, investment decisions, profit distributions, or staffing.
While ZTE insists that it isn’t state-owned or government-controlled the US China Economic and Security Review Commission says that organisations close to the Chinese government appear to own a majority share in ZTE.

It is difficult to tell if US fears of Chinese government involvement stem from the possibilities of espionage or from the opportunity that government funding will afford the Chinese companies to dump product onto the American market at rock bottom prices.