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More Chinese Whispers

7:40 AM -- With the House of Representatives' Intelligence Committee apparently desperate to raise suspicions about the intentions of Huawei Technologies Co. Ltd. and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), there seems little prospect that the U.S. security spotlight trained on the Chinese vendors is likely to be turned off any time soon.

Committee chairman Mike Rogers raised the key issues of security and government subsidies during a conference late last week and is preparing a lengthy report into the two communications equipment vendors that should be completed within a few months, reports Reuters.

That same report includes a denial from Huawei global board director Chen Lifang that her company has developed its business on the back of illegal subsidies.

Rogers and fellow committee member Dutch Ruppersberger have requested documents from both of the Chinese firms as part of an intensified investigation into their businesses, they noted in a recent press statement.

The ongoing investigation appears to be affecting Huawei's business in the U.S., where it has been trying to gain a foothold in the carrier and enterprise equipment, and mobile handset, markets. Light Reading recently reported that Huawei had reduced its U.S. headcount as, according to sources, the ongoing probe is leading network operators to exclude the Chinese vendors from their plans. (See Huawei Cuts Some US Staff.)

The U.S. isn't the only tricky market for the Chinese vendors, which are also coming under scrutiny in Europe and elsewhere. (See Euronews: EC Sharpens Knives Over Huawei, ZTE, Huawei Denied German Bid, ZTE Defends Iran Position and Australia's (Safe) Bet Against Huawei.)

For more on Huawei and ZTE see:

— Ray Le Maistre, International Managing Editor, Light Reading

digits 12/5/2012 | 5:29:16 PM
re: More Chinese Whispers

There is a sense that it's an investigation that already has a conclusion and that it is now trying to work backwards...

Flook 12/5/2012 | 5:29:16 PM
re: More Chinese Whispers

"Intelligence Committee" in this case is an oxymoron.

digits 12/5/2012 | 5:29:12 PM
re: More Chinese Whispers

A spokeswoman from China's Commerce Ministry has commented publicly on the issue - this could escalate...


mothilalds 12/5/2012 | 5:21:42 PM
re: More Chinese Whispers

In the South East Asian and South Asian region, Huawei has an excellent service record. They deliver things on time and in excellence at a reasonable price. Most of the time they are flexible. What is more? Most of the Asian operators are not bothered about the politically motivated smear campaigns and unilateral trade barriers. Huawei will take more courage to introduce more competitive products to outperform the competitors who are well protected by their respective Governments.

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