US vs Huawei/ZTE: The Verdict
That, reports Bloomberg, is the general conclusion of the Intelligence Committee following a probe that saw members of the investigating team visit China and representatives of both Huawei and ZTE give evidence to the Committee (testimony that included some ill-advised claims). (See Huawei, ZTE Get Grilled in US.)
The Committee's main concern, it would seem, is that it's not possible for Huawei and ZTE to operate without influence from the Chinese government, a claim that both vendors have always rejected and which ZTE has once again denied, reports Reuters.
The verdict should come as no surprise to anyone. The tone of the Committee's statements always suggested that the only thing in doubt was just how damning of the Chinese vendors the final conclusions would be.
That's not to say that the Committee's findings have no validity and, for sure, both Huawei and ZTE have been guilty over the years of having indulged in less than creditable business practices, including industrial espionage and bribery. To what extent those two companies engage in those practices any more than their counterparts is another issue altogether -- international business in any industry is far from squeaky clean.
Once the full report is released it'll be interesting to see the full details of the Committee's decision. What's immediately clear, though, is that this provides a greater opportunity for the Chinese vendors' rivals to win business in the critical U.S. market and that any engagement with Huawei and ZTE by U.S. companies hereon in is likely to be public relations suicide.
Of course, the fallout from the Committee's verdict could be far more wide-ranging. China's foreign ministry has already issued a statement about the verdict, urging the U.S. to set aside any prejudices when dealing with Huawei and ZTE, reports Reuters. It's hard to imagine that the Chinese government's reaction will begin and end with a statement.
— Ray Le Maistre, International Managing Editor, Light Reading
The Economist had a very intersting piece on this over the summer.
They discuss a lot of the issues: Huawei's success, the very genuine concerns about security in general, how other countries are facing these issues.
They contrast the US approachj (a panel of politicians) with how UK Govt has invested & involved GCHQ in audits and diligence.
They also made the point about complacency: merely because a product is US owned is no particular reason to trust it is secure (after all, how much of the technology used in Western Company X's product was developed in China anyway...?)
http://www.economist.com/node/...
That said, there are things Huawei & ZTE could and should do to improve clarity.
Maybe this move will help that - but I suspect the reality may make little difference to US Trade Policy.