By Yu Runze, Sina English
Beijing on Monday urged Washington to "set aside prejudices" after a draft Congressional report said Chinese telecom firms Huawei and ZTE were security threats that should be banned from business in the US.
"We hope the US Congress will set aside prejudices, respect the facts, and do things that will benefit China-US economic cooperation instead of the contrary," said foreign ministry spokesman Hong Lei.
The draft report by the US House Intelligence Committee said an investigation has concluded that the two firms "cannot be trusted" to be free of influence from Beijing and could be used to undermine US security.
It said US authorities "must block acquisitions, takeovers or mergers involving Huawei and ZTE given the threat to US national security interests".
The panel launched its probe over concerns that China could use the fast-growing firms for economic or military espionage, or cyber attacks.
Hong defended the Chinese telecom firms.
"China's telecom enterprises have been engaged in international cooperation according to market economy rules and their investment has demonstrated the mutually beneficial nature of China-US economic ties," he said.
ZTE Corp said on Monday that the scope of a U.S. committee probe into Chinese telecom equipment makers should be expanded to protect U.S. national security and that it is not directed or controlled by the Chinese government.
"ZTE should not be a focus of this investigation to the exclusion of the much larger Western vendors," ZTE, China's second largest telecom equipment maker, said in a letter addressed to the U.S. committee.
U.S. Congress: Chinese tech giants pose security threat
China's top telecommunications gear makers should be kept from the U.S. market because of security threat, the U.S. House of Representatives' Intelligence Committee leaders said in a draft of a report to be released Monday.
U.S. intelligence must stay focused on efforts by Huawei Technologies Co Ltd and ZTE Corp to expand in the United States and tell the private sector as much as possible about the threat, the panel leaders said based on their 11-month investigation of the pair Chinese tech giants.
Huawei is the world's second-biggest maker of routers, switches and other telecommunications equipment after Sweden's Ericsson. ZTE ranks fifth.
The panel's draft report faulted both companies for failing to provide enough information to allay its concerns, including detailed information about formal relationships or regulatory interaction with Chinese authorities.
The panel said that it had received allegations from unnamed industry experts suggesting that Huawei, in particular, may be guilty of bribery and corruption, discriminatory behavior and copyright infringement.
The document cited what it called long-term security risks associated with the companies' equipment and services but it did not provide detailed evidence, at least not in an unclassified version.
Based on classified and unclassified information, Huawei and ZTE, which are both based in Shenzhen, South China, "cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems," it said.
The companies had no immediate comment on the draft. Top executives of both told a committee hearing on September 13 that their companies would never bow to any attempt by anyone to seed their products for spying, equating this with corporate suicide.
The draft showed that the committee is calling on an interagency government group that reviews national security implications of foreign investments to block acquisitions, takeovers or mergers involving Huawei and ZTE.