US sets bad model by blocking Huawei, ZTE

BEIJING -- The US House of Representatives Intelligence Committee last week issued a report alleging that two leading Chinese technology companies, Huawei and ZTE, pose possible threats to US national security.

The committee suggested that US companies should avoid buying their equipment from Huawei and ZTE. The two companies have been described as being under the control of the Chinese government and having entered the US. market through unfair means.

However, the report does not tell the whole story.

"There's nothing in the report, unless you count innuendo, supposition and guilt by association, to suggest either company has engaged in cyber-espionage, is malevolently interfering with America's telecommunication supply chain or presents a threat to American free enterprise," said a recent column in the San Francisco Chronicle.

While claiming itself to be an open and free market, the United States has frequently used trade protectionism to protect its companies from overseas competition, leading some experts to believe that the US is setting a bad example for the rest of the world amid a global economic downturn.

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The committee report represents another instance of trade protectionism without justification, said Song Guoyou, assistant professor of the American Studies Center at Fudan University.

The struggling US economy, Chinese commodities' continuous entry into the US market and the upcoming US presidential election are the reasons behind its demonization of Chinese companies, Song said.

The unfair containment of Chinese companies' overseas expansion disregards the rising competitiveness of Chinese companies and ignores the economic benefits that could be gained by both sides, said Cheng Biding, a counselor for the government of East China's Anhui province.

An investment analysis of the 535 representatives of the US Congress, conducted by the Chinese Business Journal, indicates that the US committee's report may be catering to the interests of the country's politicians.

It reported that 73 of the representatives have invested in Cisco, the country's largest telecommunications company, as well as a company that considers Huawei to be its top competitor.

A seven-page September 2011 presentation distributed by Cisco was recently obtained by the Washington Post. Titled "Huawei & National Security", the document was used to lure clients away from Huawei, the journal quoted an anonymous source at Cisco as saying.

The US market accounts for more than half of Cisco's revenues. To keep its leading role in the US market, Cisco has been continuing to lobby representatives, analysts said.

Most information technology products can be abused in some fashion and safety risks can never be completely avoided, said Chen Jinqiao, deputy chief engineer of the Electronics and Telecommunications Research Institute under the Ministry of Industry and Information Technology.

There are telecommunications equipment suppliers from Europe and Japan active in the US market, but the US committee's investigation only targeted Chinese companies, which was selective and unfair, he said.