The US Congress has deemed that the two Chinese telecoms companies, Huawei and ZTE pose a security threat to the US, and recommended that the two companies should not be allowed to take part in any US mergers or acquisitions.
Based on available classified and unclassified information, 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 panel said their investigation had received credible allegations from current and former Huawei employees of bribery and corruption, discriminatory behaviour and copyright infringement.
Of course we are in the midst of the US presidential election campaigns, and China has (once again) become a central issue. Both Republican and Democratic candidates promise to apply more pressure on Beijing, ranging from the perennial human rights issues to the laboured, though clearly entrenched views on the value of the Yuan. Being tough on China is a vote winner.
But whereas China has never accused any American enterprises of any complicity with its government, China has taken a broadly similar stand in regards to some usage of American software, and in particular the Chinese government made a conscious decision not to use Microsoft Windows and Office products within government. Whereas some may see this as a shrewd move for technical reasons, the decision was guided by national security concerns. Microsoft lost out, but on the plus side it was a huge boost for China’s chosen operating system, Linux. Being open source, the Chinese could see exactly what was being installed on their computers.
Are there any truths to the allegations? The two companies concerned naturally say not. What is telling is that the Congressional Committee actually stops short of calling for a boycott of the products. This would suggest that the evidence is at best circumstantial if we assume that any hard evidence would lead to such a call. This is further supported by the use of the word “credible allegations.” Credible and true are far from the same.
Once again the notion of a threat to national security appears to be being used as the ultimate beating stick which people find hard to challenge.
Meanwhile, back in China responses ranging from calls to boycott Apple to allegations that this is yet one more attempt by the USA to proactively prevent Chinas development.
Whatever the truth of the matter, until trust between the world’s two largest economies rises beyond the sceptical it is likely that businesses will continue to be caught in the middle.