For a while now the US has been working out how to deal with the two Chinese telecommunications outfits that have been flogging their gear in the Land of the Fee.
There have been rumours that hardware made by Huawei and ZTE shipped with back doors which would enable Chinese spooks to listen in to the communications of decent American citizens as they order their Apple pies.
Apparently it is in the constitution as spying on US citizens is the preserve of American companies and anyway so far no back door has actually been found.
Now it seems that the US spooks have come up with another novel way of getting the cheap as chips Huawei and ZTE from winning contracts which would have gone to US companies.
The head of the US House of Representatives’ Intelligence Committee claims that the companies are subsidised by the Chinese government.
Panel chairman Mike Rogers did repeat the line that there was a concern is whether any of their equipment or its software is designed to steal information or “establish the ability to do cyber attacks”.
But what seems to have really got his goat was that the gear is subsidised “so it can be multiple times cheaper than any local competitor.”
This could mean that the US could act to place tariffs on the imports of the products and thus make them less competitive. This is exactly what the big US telecommunications industry lobby groups want, because it means that they have to do something like compete.
Both companies deny getting Chinese subsidies and deny any suggestion that they are involved in espionage.
Rogers told Reuters that ZTE and Huawei were a huge problem which will have to get a handle on it very quickly. He said that it might need legislation or new rules to guard US networks from possibly booby-trapped hardware or software.
He claimed that his committee’s coming report would help US companies considering buying equipment “to make the right decision and allow us to go forward with appropriate legislation as required”. The right decision, of course, would be to buy American.
Williams Plummer, a Huawei spokesman in Washington, said that Huawei has publicly and repeatedly and in a detailed fashion debunked this type of misinformation with solid facts. He could not understand why the US government continued to base its decisions on unsubstantiated and unclearly motivated statements. Clearly he has never read anything about the US approach to issues like evolution and stem cell research.
ZTE spokesman David Dai Shu said his company “receives no illegal or hidden subsidies, nor does it dump products in any markets where it operates”.