Chinese telecoms blacklisted

Oct 11, 2012

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Two Chinese telecoms groups have been branded a threat to American national security by a US Congressional intelligence committee. It has recommended that Huawei, the world’s second-largest telecoms network equipment maker, and its rival, ZTE, be banned from US government procurement and any mergers and acquisitions activity. Huawei described the report as “an exercise in China bashing”.

What the commentators said

Since much of the evidence in the report was classified, and there is an election going on, it is “hard to shake off the suspicion of protectionist undertones”, said the FT. Nonetheless, “at a time of rising fears about cyber warfare, the first onus must be on the companies to open up to greater scrutiny”.

Huawei in particular hasn’t helped itself. It has remained tight-lipped about its ownership structure and its chairman has been linked to the security services. They monitor “everything from emails to texts” on China’s network.

Moreover, said Mic Wright on Telegraph.co.uk, America isn’t the only country where Huawei is under suspicion. The Australian government decided not to let it bid for contract to construct a national broadband network.

As the International Institute for Strategic Studies has pointed out, “there is no such thing” as a truly private-sector firm in China. It makes sense to subject Chinese tech firms to additional scrutiny when their government is known to support cyber attacks and online spying, said Wright.

But Washington must beware of starting a tech trade war. “Knee-jerk techno-nationalism makes no sense in an industry in which supply chains have become global,” said Economist.com. Most telecoms equipment groups manufacture at least some of their products in China.

The way forward is “an international effort” to develop standards covering the security of telecoms networks. “Sadly, the House Intelligence Committee isn’t smart enough to see this.”

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