Caixin
Oct 09, 2012 06:27 PM

Three Firms Blocked from Entering U.S.

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(Beijing) – Three companies with links to China have been blocked from entering the United States recently over U.S. concerns they are a threat to national security.

Huawei and ZTE, leading Chinese telecoms equipment manufacturers, pose a threat to U.S. national security, the U.S. House Intelligence Committee said in a report released on October 8.

The Chinese government has access to the two companies and the motive to undermine the U.S. national security interests, the report said.

The committee said "the Committee on Foreign Investment in the United States (CFIUS) must block acquisitions, takeovers, or mergers involving Huawei and ZTE given the threat to U.S. national security interests. U.S. government systems, particularly sensitive systems, should not include Huawei or ZTE equipment, including component parts."

When Mike Rogers, chairman of the House Intelligence Committee, was asked if CFIUS should block any acquisition activities by either Huawei or ZTE, he said: "Yes, I think CFIUS should do that."

Huawei said "the report released by the committee employs many rumors and speculations to prove non-existent accusations."

Huawei said that it had to suspect that the only purpose of such a report was to impede competition and obstruct Chinese telecom companies from entering the United States.

ZTE said it "has set an unprecedented standard for cooperation by any Chinese company with a U.S. congressional inquiry. ZTE has presented the committee with ample facts that demonstrate ZTE is China's most transparent, independent, globally focused, publicly traded telecom company."

Another Chinese company encountered a similar problem recently. On September 29, U.S. president Barack Obama blocked Ralls Corp., a U.S.-based company owned by senior executives of Chinese heavy equipment maker Sany Group Co., from building four wind farms in the northwestern state of Oregon and asked it to withdraw all the investment for the projects within 90 days. Obama said the work threatened the U.S. security.

In October, Sany Group and Ralls sued CFIUS and Obama in U.S. court.

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