WASHINGTON – The leaders of a congressional probe into two Chinese telecom giants expressed fresh concerns Thursday about the firm’s links to the Beijing government, as the companies defended their integrity.
The House Intelligence Committee opened a hearing into “security threats” posed by China’s Huawei and ZTE, as part of a probe begun last year.
Committee chairman Mike Rogers said he has been “disappointed” that the firms have provided little evidence to prove they are not being used by the Chinese government for espionage or cyber attacks on the United States.
“We must get to the truth and see if these companies are tied to or influenced by the Chinese government,” Rogers said as the hearing opened.
Representative Dutch Ruppersberger expressed similar concerns, saying the firms so far have produced “a lack of direct responses and vague answers” to inquiries from the committee.
Ruppersberger said he was concerned that the Chinese companies’ products are subsidized by the Beijing government and that “US consumers may have no idea about the national security implications of their purchases.”
Charles Ding, a corporate senior vice president of Huawei, told the panel: “I am here today to set the record straight about Huawei,” and added that the firm’s success “has been built on entrepreneurship… not on favoritism from any government.”
“Our customers throughout the world trust Huawei,” Ding said in his prepared remarks.
“We will never do anything that undermines that trust. It would be immensely foolish for Huawei to risk involvement in national security or economic espionage… Huawei has not and will not jeopardize our global commercial success nor the integrity of our customers’ networks for any third party, government or otherwise. Ever.”
Zhu Jinyun, ZTE’s senior vice president for North America and Europe, defended his firm’s integrity.
“ZTE is focused on its success as a multinational company,” he said.
“ZTE is not an SOE (state owned enterprise) or government controlled. Indeed, ZTE is China’s most independent, transparent, globally focused, publicly traded telecom company.”
Zhu said he found committee suggestions that it is being used for cyber attacks “very disturbing.”
“The committee’s central question has been: would ZTE grant China’s government access to ZTE telecom infrastructure equipment for a cyber attack?… Let me answer emphatically: No!” he said.
The hearing comes amid ongoing reviews around the world on whether Chinese firms, rapidly expanding in the telecom sector, are linked to the Chinese military or the government in Beijing.
Australia earlier this year blocked Huawei from bidding for contracts on a huge broadband plan due to fears of Chinese cyber attacks. In the US, Huawei was forced to back away from several investments amid pressure from Washington.
Rogers said his panel has heard reports that equipment from the two firms has so-called “back doors” and in some cases were “set to beacon back to China.”
Both executives denied this.
Ding said Huawei operates in 140 countries and that it would be “corporate suicide” to compromise its security.
When asked about a report that at least one ZTE device had a “back door,” Zhu said this was incorrect.
The report, he said, was “not fact-based. What they have been calling back doors are actually software bugs,” which affect all companies.
Huawei earlier released a 78-page report suggesting it had been unfairly denied access to the US market.
“During the past few years, unspecified allegations in the US have led to severe anti-market measures to block Huawei’s expansion efforts,” the report said.
“Viewed from the US perspective, Huawei is currently perceived as a threat. However, the company could be seen as an opportunity.”
Huawei said its 2007 effort to buy networking firm 3Com “was thwarted by political forces” and that it was in line for a 2010 contract for a network upgrade for Sprint before intervention by the Congress and even by then Secretary of Commerce Gary Locke.
Ruppersberger told the executives that the firms cannot be treated on a par with other firms as long as China remains a threat to cybersecurity.
“If you want to do business in the United States, you have to tell your Chinese government to stop cyber attacking our businesses,” the lawmaker said.
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