Are Chinese Telecoms Firms Really Spying on Americans?

The House Intelligence Committee recommended that American businesses stay away from computer network products made by two Chinese firms, Huawei and ZTE, for fear that they may compromise U.S. national security. The world’s second and fifth-largest information-and-communications-technology companies have large operations overseas but have failed to expand extensively in the States.

“Based on available classified and unclassified information,” said the U.S. panel’s 52-page report, “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… Malicious implants in the components of critical infrastructure, such as power grids or financial networks, would also be a tremendous weapon in China‘s arsenal.”

Are ZTE and Huawei victims of the China-bashing that has characterized the U.S. presidential campaign? Or is there more going on? The answer is probably a bit of both. President Barack Obama and Republican nominee Mitt Romney seem intent on one-upping each other in showing their tough-on-China street cred. Congress may be simply joining in on the game. But it’s also not hard to believe that these Chinese firms, should they be pressured by their government to do so, may feel compelled to commit a secret, untoward act toward foreign entities in order to protect the growth of their business back home.

Accusing the U.S. panel of engaging in protectionism, Huawei released a statement on Monday:

The United States is a country ruled by law, where all charges and allegations should be based on solid evidence and facts. The [congressional] report failed to provide clear information or evidence to substantiate the legitimacy of the Committee’s concerns… The report released by the Committee today employs many rumors and speculations to prove non-existent accusations.

Chinese analysts have, unsurprisingly, dismissed concerns that the two companies might target the U.S. with cyber-espionage. They point out that Huawei and ZTE have never been caught spying on its global customers or slipping malicious coding into its software. Instead, they counsel more trade and collaboration as the way forward. “If you take China as the enemy, that’s the wrong way of doing things,” says Zeng Jianqiu, a professor at the Beijing University of Posts and Telecommunications... “If America does this, then there’s the possibility that China will do the same thing, too.”