US security warning over China telecom firms

A US House Intelligence Committee has warned that US companies should avoid doing business with China’s two leading technology firms because they pose a national security threat to the country.The panel, in a report to be issued on Monday, says US regulators should block mergers and acquisitions by Huawei Technologies Ltd and ZTE Corp, who are among the world’s leading suppliers of telecommunications equipment.Reflecting US concern over cyber-attacks traced to China, the report also recommends that US government computer systems not include any components from the two companies because that could pose espionage risk.“China has the means, opportunity, and motive to use telecommunications companies for malicious purposes,” the report says.“The investigation concludes that the risks associated with Huawei’s and ZTE’s provision of equipment to US critical infrastructure could undermine core US national-security interests.”The recommendations are the result of a year-long probe, including a congressional hearing last month in which senior Chinese executives of both companies testified, and denied posing a security threat.A US executive of one of the companies said the firm co-operated with investigators, and defended its business record. Huawei is a “globally trusted and respected company,” William Plummer, vice president for external affairs, said.The bipartisan report is likely to become fodder for a presidential campaign in which the candidates have been competing in their readiness to clamp down on Chinese trade violations.