U.S. announces national security investigation into Chinese telecom companies

On Thursday, the U.S. House of Representative Intelligence Committee announced it was launching an investigation into the threat posed by Chinese-owned telecommunications companies working in the U.S., including Huawei (Shenzhen, P.R.C.) and ZTE (Shenzhen, P.R.C.).

The investigation comes after a ten month preliminary review of Chinese communications companies was conducted by the committee staff.  The preliminary review suggested that there was a national security concern of “the highest priority” and that a more extensive investigation should be conducted.

The investigation will decide to what extent Chinese companies provide its government with opportunities for a greater foreign and economic espionage; as well as threaten the U.S. infrastructure.

Early this month, the Intelligence Committee reported that both China and Russia were hacking into U.S. databases and stealing secret, high-tech research and development information.

“We already know the Chinese are aggressively hacking into our nation’s networks, threatening our critical infrastructure and stealing secrets worth millions of dollars in intellectual property,” says Dutch Ruppersberger, ranking member of the Intelligence Committee.

According to Ruppersberger, this jeopardizes national security and can hurt U.S. competiveness in the international market.  The purpose of this new investigation is to determine the extent of which Chinese communications companies are exploiting the global supply chain.

“The same way hacking can be a threat, vulnerabilities can derive from compromised hardware on which our telecommunications industry rely,” says Ruppersberger.

Liu Weimin, a Chinese foreign ministry spokesperson emphasized that Chinese companies acting in the U.S. follow the law, and asked that the U.S. government not politicize Chinese investment, according to a report by the Associated Press,

But the Intelligence Committee still has its worries about Chinese equipment companies in the U.S. market.

“The fact that our critical infrastructure could be used against us is of serious concern,” says Intelligence Committee Chairman Mike Rogers. “We are looking at the overall infrastructure threat and Huawei happens to be the 800 pound gorilla in the room”

But, Huawei has said that it acknowledges that network security concerns are real.  According to Bill Plummer, vice president of external affairs with Huawei Technologies USA, the company welcomes a fair investigation, but insists that Huawei does not present a security threat to the U.S.

“Network security concerns are not about Huawei. The integrity of our solutions has been proven worldwide, having been deployed by 45 of the world’s top 50 operators across the globe without security incident,” says Plummer. “Citing vague unsubstantiated national security concerns to prevent open competition in the U.S. market is unfair to the tens of thousands of Americans who either directly work for Huawei or whose jobs are supported by Huawei’s procurement of U.S. goods and services to support our global business – such procurements have totaled over $20 billion over the last five years.”

The committee said it plans on investigating other Chinese companies in addition to Huawei and ZTE.

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