Flagging the Chinese technology giants Huawei and ZTE as security threats to the nation, a United States House Intelligence Committee has directed American companies to avoid doing business with them in the interest of national security.
US House of Representatives' Intelligence Committee report advised the regulators to block any mergers or acquisitions by the Chinese companies for their suspected ties to the Chinese government to reduce an espionage risk. "Private-sector entities in the United States are strongly encouraged to consider the long-term security risks associated with doing business with either ZTE or Huawei for equipment or services," the report said.
Speaking on the '60 Minutes' on CBS News, Committee Chairman Mike Rogers directed the US businesses to "find another vendor if you care about your intellectual property; if you care about your consumers' privacy, and you care about the national security of the United States of America."
After 11-month fact-finding mission and hearings in Washington where many of the executives of both companies were summoned to testify, the committee ruled that both Huawei and ZTE cannot be trusted to be free of foreign (Chinese) state influence.
Accusing the Chinese multinationals for their failure to cooperate fully with the committee's probe, the panel report said, "Huawei and ZTE have failed to assuage the committee's significant security concerns presented by their continued expansion into the United States. In fact, given their obstructionist behaviour, the committee believes addressing these concerns have become an imperative for the country."
The Shenzhen-headquartered Huawei, owned by its employees, is the world's second-biggest telecommunications equipment maker and ZTE is ranked fifth in the world. While Huawei makes up to 4 percent of its group sales from the United States, 2-3 percent of ZTE's overall revenue is generated from the US.
Concerned about the economic cyber espionage, especially by China, the United States at multiple occasions had accused the communist nation for being the world's most active and persistent perpetrators of economic espionage.
