The furor over allegations of Chinese industrial espionage and national security threats reached the highest levels of the Beijing government Saturday when China’s commerce minister took time away from his nation’s 18th Communist Party Congress to deride U.S. criticism of technology firms like Huawei Technologies Co. and ZTE Corp.
Commerce Minister and Communist Party member Chen Deming chastised U.S. critics, saying their complaint “smacks a little of Cold War mentality.” Deming said the United States was entering dangerous territory by attempting to blacklist Huawei, the world’s second-largest telecom equipment maker, because of its alleged relationship with the ruling communists.
“The U.S. raised the security issue of Huawei and ZTE to the level where they are asking whether the companies have Communist Party cells and what their relations are with the party,” Deming told a group of reporters during a break in the Congress, being held to organize new leadership for the Asian country of 1.3 billion people. “Can you imagine if China started asking U.S. companies coming to China what their relationship was with the Democratic or Republican parties? It would be a mess. Personally I think this has gone too far.
“If you see me as a Trojan horse, how should I view you?” Deming asked. “By this logic, if the Americans turned it around, they would see that it’s not in their interest to think this way.”
Deming’s comments mirror a dismissive statement his organization released last month aimed squarely at eth U.S. House intelligence committee’s report.
“This report by the relevant committee of the U.S. Congress, based on subjective suspicions, no solid foundation and on the grounds of national security, has made groundless accusations against China,” commerce ministry spokesman Shen Danyang said at the time.
The dustup was kicked off in early October when Rep. Mike Rogers (R-Mich.), chairman of the powerful House Select Committee on Intelligence, appeared on CBS’s 60 Minutes to warn the U.S. market of what lawmakers perceived as the Huawei threat.
“If I were an American company today… and you are looking at Huawei, I would find another vendor if you care about your intellectual property, if you care about your consumers’ privacy, and you care about the national security of the United States of America,” Rogers said.
The House admonition was followed with reports that the Obama administration had led its own security review of Huawei equipment and business practices and found no evidence of espionage or deliberate cybersecurity threats or practices that would undermine the national security of the United States, Reuters news service reported. The White House has since denied it authorized any such report and disavowed the conclusion that Huawei had been exonerated.
The damage was done, however. A poll conducted by Channelnomics and The 2112 Group after the House report was made public found that U.S. solution providers overwhelmingly felt the U.S. assertions against Huawei would dampen sales and marketability of the company’s products, and they would be less likely to work with companies labeled as a national security threat.
European countries, meanwhile, continue to embrace Huawei, with officials in the U.K. in mid-October announcing the vendor’s $2 billion investment in a new regional headquarters and the plans to expand in the British Isles. And indeed there are dozens of foreign technology companies who supply the underpinnings of critical infrastructure with whom U.S. companies and the U.S. government have no problem at all.
William Plummer, vice president for external affairs at Huawei in Washington, told Channelnomics the House report was a “political distraction” and that the intelligence committee “seems focused on the acts of other states.
“To the extent that there are issues between states, they should be managed through appropriate diplomatic or other channels, not by holding hostage an independent, world-respected and trusted company,” Plummer said.
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