ZTE slams Congress spying claims, doubles down on sales ban
'Ban all Chinese hardware and see where it gets you'
ZTE has defended itself against claims that its hardware is a security risk and has suggested that if Congress is that concerned, it should recommend not buying any Chinese-manufactured equipment, which would include tech sold by Western companies who have outsourced their manufacturing.
On Monday the US House of Representatives Intelligence Committee issued a report recommending that ZTE and Huawei should be banned from selling in the US over fears that they will enable attacks against the US and that their businesses are unfairly subsidized. Huawei immediately declared the committee was biased from the start, and now ZTE has stuck its oar in.
ZTE issued a strongly worded denial of the charges against it, saying the committee broke its own rules of evidence. It then doubled down by pointing out the uncomfortable truth that most networking equipment is manufactured in China anyway, including that sold by most major US vendors under their own branding.
"Particularly given the severity of the Committee’s recommendations, ZTE recommends that the Committee’s investigation be extended to include every company making equipment in China, including the Western vendors. That is the only way to truly protect US equipment and US national security," said David Dai Shu, ZTE’s director of global public affairs, in a statement.
The committee's finding that ZTE wasn't "free from state influence," could be applied to any Chinese company, he said, arguing that at no point in the report had Congress challenged the company's fitness to sell in America ethical or legal grounds. It had complied fully with Congress and wasn't holding anything back, he asserted.
ZTE is "China’s most transparent, independent, globally focused, publicly traded telecom company," he said, adding that the company advocates a trusted delivery system whereby equipment is inspected for security issues by a third-party laboratory under US government oversight. This system already works for over 500 network carriers in 140 countries, he pointed out.
Just after the US House of Representatives delivered its report, Cisco cut all sales contracts with ZTE, reportedly after an internal investigation showed it was likely that the Chinese vendor had resold Cisco's hardware to Iran in defiance of international sanctions. The FBI is currently conducting a criminal investigation into the case.
But in a bit of good news for the company (for a change), Reuters reports that the EU has put a hold on its own investigation into Huawei and ZTE's business practices. EU trade commissioner Karel De Gucht has been investigating reports that the two Chinese suppliers are dumping low-cost kit onto European markets.
According to EU officials, the Chinese government is sponsoring the practice with generous credit lines in an attempt to distort competition. One source told Reuters that one Chinese supplier had offered to replace all of a European telecommunications carrier's network for free in an attempt to gain market share.
The only problem is no one has actually complained about these allegations. World leader Ericsson has said it does not want any such investigation, and the third and fourth largest suppliers – Nokia Siemens Networks and Alcatel-Lucent – don’t look keen to complain to regulators, either. Without a complaint, launching an investigation would break EU protocol.
EU diplomats told the news service that the investigation will most likely be put on hold until at least the middle of next year, at the earliest. ®
... truth that most networking equipment is manufactured in China anyway ...
The futility of the U.S.Congress is highlighted again.
This is not about security, it's the U.S.doing an end run around WTO rules and regulations as they have done to other countries. They can't operate on a level playing field.
But they screwed themselves. Companies wanting to up their profits ship their assembly and manufacturing operations to China. The Chinese are no dummies, so they 'borrow' the American technology, and improve it, then sell it back to the US as a competing product. Actually, the Chinese government is now demanding IP transfers / licencing.
Since American imports exceed exports their trade surplus. it drains the treasury. So the Treasury issue bonds, the Chinese fearing a loss of their main market, buy the bonds.
Now the Chinese have US technology, production, and the control of debt. It's called holding all the cards.
And the US thinks it is the greatest? Dumb b*stards. End of the American empire.
The CIA just released a bulletin stating, they found evidence Huawei is using secret facilities in Northern Korea to produce Routers of Mass Distruction in support of Al Qaida.
Re: The problem
Free markets tend to drive prices down and encourage innovation. When the US automotive industry last used Congress to crack down on lower priced, economical (and better quality) Japanese imports, the US auto industry stagnated for decades while the Japanese proceeded to dominate world markets.
I would like to believe we learned a lesson from that last big clusterf*k but this latest debacle doesn't help convince me.
Trade wars and protectionism killed too many people and jobs in the last Great Recession, it really is time to move on.