After investigating China's two biggest mobile manufacturers for about a year, committee chairman Mike Rogers (R-MI) concluded ZTE and Huawei "cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems." The House report cites a laundry list of illegal behavior such as bribery, corruption, immigration violations, and so forth, but it didn't provide concrete evidence, like the names of the accusers or even full details. It essentially presumes that these companies could build in backdoors into routers and phones, and leak information to the Chinese government.
ZTE and Huawei both vehemently deny these claims. ZTE even says that the U.S. is such a small market for it that this investigation doesn't even make sense. And lacking substantial evidence, it could be just another case of China fear mongering. [Reuters, Bloomberg via The Verge]
Update 1: Huawei has released a statement regarding the accusations, reiterating that the report hasn't provided any evidence to back them up:
The report released by the Committee today employs many rumors and speculations to prove non-existent accusations. This report does not address the challenges faced by the ICT (information and communications technology) industry. Almost every ICT firm is conducting R&D, software coding and production activities globally; they share the same supply chain, and the challenges on network security is beyond a company or a country. The Committee's report completely ignored this fact. We have to suspect that the only purpose of such a report is to impede competition and obstruct Chinese ICT companies from entering the US market.
Update 2: Reuters is reporting that Cisco has officially ended its relationship with ZTE after an internal investigation found that the Chinese company sold banned networking equipment to Iran.
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