by Staff Writers
Washington (AFP) Sept 13, 2012
The leaders of a congressional probe into two Chinese telecom giants expressed fresh concerns Thursday about the firms' links to the Beijing government, as the companies defended their integrity.
The House Intelligence Committee opened a hearing into "security threats" posed by China's Huawei and ZTE, as part of a probe begun last year.
Committee chairman Mike Rogers said at the close of the hearing that he was "a little disappointed" in the responses
"I was hoping for more transparency, more directness in some of the answers," he said.
He said earlier that the reach of the two firms "provide a wealth of opportunities for Chinese intelligence agencies to insert malicious hardware or software implants into critical telecommunications components and systems" and could be required "to cooperate with any request by the Chinese government."
Representative Dutch Ruppersberger expressed similar concerns, saying the firms so far have produced "a lack of direct responses and vague answers" to inquiries from the committee.
Ruppersberger said he was concerned that the Chinese companies' products are subsidized by the Beijing government and that "US consumers may have no idea about the national security implications of their purchases."
Charles Ding, a corporate senior vice president of Huawei, told the panel: "I am here today to set the record straight about Huawei," and added that the firm's success "has been built on entrepreneurship... not on favoritism from any government."
"Our customers throughout the world trust Huawei," Ding said in his prepared remarks.
"We will never do anything that undermines that trust."
Zhu Jinyun, ZTE's senior vice president for North America and Europe, defended his firm's integrity.
"ZTE is focused on its success as a multinational company," he said.
"ZTE is not an SOE (state owned enterprise) or government controlled. Indeed, ZTE is China's most independent, transparent, globally focused, publicly traded telecom company."
Zhu said he found committee suggestions that it is being used for cyber attacks "very disturbing."
"The committee's central question has been: would ZTE grant China's government access to ZTE telecom infrastructure equipment for a cyber attack?... Let me answer emphatically: No!" he said.
"China's government has never made such a request. We expect the Chinese government never to make such a request of ZTE. If such a request were made, ZTE would be bound by US law."
The hearing was called amid ongoing reviews around the world on whether Chinese firms, rapidly expanding in the telecom sector, are linked to the Chinese military or the government in Beijing.
Australia earlier this year blocked Huawei from bidding for contracts on a huge broadband plan due to fears of Chinese cyber attacks. In the US, Huawei was forced to back away from several investments amid pressure from Washington.
Rogers said his panel has heard reports that equipment from the two firms has so-called "back doors" and in some cases were "set to beacon back to China."
Both executives denied this.
Ding said Huawei operates in 140 countries and that it would be "corporate suicide" to compromise its security.
When asked about a report that at least one ZTE device had a "back door," Zhu said this was incorrect.
The report, he said, was "not fact-based. What they have been calling back doors are actually software bugs," which affect all companies.
Huawei earlier released a 78-page report suggesting it had been unfairly denied access to the US market.
"During the past few years, unspecified allegations in the US have led to severe anti-market measures to block Huawei's expansion efforts," the report said.
Huawei said its 2007 effort to buy networking firm 3Com "was thwarted by political forces" and that it was in line for a 2010 contract for a network upgrade for Sprint before intervention by the Congress and even by then commerce secretary Gary Locke.
In a related matter, US Representatives Sue Myrick and Frank Wolf released a letter expressed concern that ZTE may have supplied equipment to Iran, in violation of US sanctions.
But when asked during the hearing if ZTE sold equipment to the Iranian government, he replied, "No."
Ruppersberger told the executives that the firms cannot be treated on a par with other firms as long as China remains a threat to cybersecurity.
"If you want to do business in the United States, you have to tell your Chinese government to stop cyber attacking our businesses," the lawmaker said.
Cyberwar - Internet Security News - Systems and Policy Issues
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Security concerns boost IT spending
Rio De Janeiro (UPI) Sep 11, 2012
Growing security concerns and economic recovery in emerging markets will boost global spending on information technology with Brazil leading the way in Latin America and China in Asia, latest data indicate. Including telecom services, total information and communication technology spending will increase 5 percent this year to $3.6 trillion - a 2.5 percent growth over last year. ... read more
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