Chinese telecoms pair should be banned from operating in US, says committee

CHINA’S top telecoms companies should be shut out of the US market as potential Chinese state influence on them poses a security threat, the US House of Representatives’ Intelligence Committee has said.

US intelligence must stay focused on efforts by Huawei Technologies and ZTE to expand in America, and tell the private sector as much as possible about any possible threat, the panel leaders said, based on their 11-month investigation of the two firms.

Huawei – employee-owned and not stock market listed – is the world’s second-biggest maker of routers, switches and telecoms equipment by revenue. ZTE ranks fifth.

Huawei, founded by former Chinese military engineer Ren Zhengfei, denies being financed to undertake research and development for the Chinese military. However, the US committee said it had received internal Huawei documentation from ex-employees showing that the company provides special network services to an entity alleged to be an elite cyber-warfare unit within the People’s Liberation Army.

The impact of China’s growth on US jobs has been a presidential campaign issue.

The panel said it received credible allegations from unnamed industry experts and current and former Huawei employees suggesting Huawei, in particular, may be guilty of bribery and corruption, discriminatory behaviour and copyright infringement.

Huawei and ZTE “cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems,” the committee said.

However, last month, 
Huawei announced a new 
£1.2 billion investment in the UK, following talks with the British government.