Huawei Found to Pose National Security Threat (Updated)

Chinese company Huawei, the world’s largest telecommunications manufacturer, has been under the scrutiny of U.S. Congress for potentially posing a national security threat as it tries to expand its business overseas. A Congressional committee just concluded a year-long investigation which found that Huawei does indeed pose a security risk. From the Wall Street Journal:

The year-long investigation by the House intelligence committee concluded the firm, Huawei Technologies Inc., and a second firm, ZTE Inc., pose security risks to the U.S. because their equipment could be used for spying on Americans.

In a report to be released Monday, the committee recommends that the U.S. block acquisitions or mergers involving the two companies through the Committee on Foreign Investments in the U.S. It also recommends that the U.S. government avoid using equipment from the firms, and that U.S. companies seek alternative vendors for telecommunications equipment.

The report is likely to add to tensions with China. American military and intelligence officials have long been warning privately that China poses a cyberespionage threat to U.S. defense systems and companies. Government officials have been reluctant to voice those concerns publicly for fear of angering China. That has begun to change, and the House report represents the most direct statement of concerns about specific Chinese companies.

CBS investigative news magazine 60 Minutes featured a segment on Huawei in tonight’s episode, in which they interview Bill Plummer, Huawei’s U.S. vice president of external relations:

Steve Kroft: One national security expert said that if you build a network like this in another country, you basically have the keys to intercepting their communications. Is that a true statement?

Bill Plummer: Part of that might be a little bit fantastical. But you know, Huawei is a business in the business of doing business — $32.4 billion in revenues last year across 150 different markets, 70 percent of our business outside of China. Huawei is not going to jeopardize its commercial success for any government, period.

Steve Kroft: What’s the relationship between Huawei and the Chinese government?

Bill Plummer: We have a Beijing office. So, you know, we’re a regulated industry the same as we are here. You need to be able to interface with government.

Steve Kroft: So you’re saying the Chinese government has no influence over Huawei.

Bill Plummer: We’re another business doing business in China.

Watch the full 60 Minutes segment here:

Listen also to a Sinica Podcast segment on Huawei from September and read a post by Bill Bishop of Sinocism on suspicions of Huawei in light of U.S. plans to build surveillance technology into telecom networks in Afghanistan.

Read more about Huawei from CDT, including a post from August, “Who’s Afraid of Huawei?

Update 8:20 am PST: Huawei has issued a statement in response to the House Intelligence committee report. An excerpt:

The United States is a country ruled by law, where all charges and allegations should be based on solid evidence and facts. The report conducted by the House Permanent Select Committee on Intelligence (the Committee), which took 11 months to complete, failed to provide clear information or evidence to substantiate the legitimacy of the Committee’s concerns.

We had hoped to ensure that the investigation would be fact-based and objective in its review of our business activities and the global issue of cyber-security. Over the past 11 months, Huawei has cooperated with the Committee in an open and transparent manner, and engaged in good faith interaction: our top management team carried out multiple rounds of face-to-face communication with the Committee members in Washington D.C., Hong Kong, and Shenzhen; we opened our R&D area, training center, and manufacturing center to the Committee and offered a wealth of documentation, including the list of members of the Board of Directors and the Supervisory Board over the past 10 years, and the annual sales data since our establishment in 1987; we also made the list of our shareholding employees, the shares they hold, as well as information about our funding resources and financial operations available to the Committee. We adopted a transparent approach in providing this information to ensure the results are fact-based and unbiased, hoping the Committee’s objective review of our business activities and the global cyber security issue can clarify the misperception of Huawei.

See also the full report from the House Permanent Select Committee on Intelligence, “Investigative Report on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE.

October 7, 2012 10:06 PM
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