Caixin
Nov 21, 2011 06:29 PM

Huawei and ZTE Respond to U.S. Security Investigation

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(Beijing)—Chinese telecommunications giants Huawei and ZTE defended their attempts to expand into American markets Monday after the U.S. House of Representatives Intelligence Committee announced that it would investigate whether the companies pose a national security risk.

In a statement, Huawei said the company welcomed an investigation as long as it is "public and justified." ZTE released a statement saying the investigation "will further prove that ZTE is a law-abiding company and a trustworthy business partner to its American clients."

Chinese telecommunications equipment manufacturers like Huawei and ZTE have long faced suspicion in the United States. In September, the U.S. Ministry of Commerce prohibited Huawei from bidding on a contract to produce communications technology for first responders, citing "national security concerns" but declining to elaborate. In 2010, ZTE lost a project worth US$ 2.1 billion for similar reasons.

"I don't know what U.S. regulators' concerns are," Cheng Lixin, head of ZTE's North American operations, told Caixin. Cheng said that U.S. regulations governing foreign companies aren't transparent, and that the United States has failed to articulate how exactly ZTE threatens national security.

Huawei and ZTE's entry into the American telecom market has so far been slow. Neither company has received equipment contracts from a major American telecommunications company. The investigation is likely to slow their progress even further.

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