China's Foreign Ministry is urging lawmakers in the United States to end discrimination against Chinese companies after a congressional report yesterday labeled two telecom firms as a threat to American national security.
The report by the US House of Representatives' Intelligence Committee said that Huawei Technologies Co and ZTE Corp should be shut out of the US market to prevent "espionage risks."
In response, Chinese Foreign Ministry spokesman Hong Lei said the Chinese companies were developing international operations that were mutually beneficial for both countries.
"China hopes that the US will respect the facts, set aside prejudices and do more to promote the Sino-American economic and trade cooperation, not the other way around," Hong said at a press briefing in Beijing.
After an 11-month investigation into the two Shenzhen-based companies, the intelligence committee said yesterday that US telecommunications operators should not do business with the two top telecom equipment makers because potential Chinese state influence on the companies posed a "security threat."
Committee Chairman Mike Rogers, at a press conference to release the report, said the panel was stopping short of urging a US boycott of mobile phones and other handheld devices made by Huawei and ZTE. The panel's warning pertains only to devices that involve processing of data on a large scale, Rogers said.
The Chinese companies have been fighting an uphill battle to overcome US lawmakers' suspicions and expand in the US after becoming key players in the worldwide market.
Huawei is the world's second-biggest maker of routers, switches and other telecommunications equipment after Sweden's Ericsson. ZTE ranks fifth.
Huawei rejected the US committee's allegations yesterday.
"Huawei is a business in the business of doing business," William Plummer, Huawei's US vice president of external relations, told Xinhua news agency.
The report "is unfortunate political distraction from very real issues related to cyber vulnerabilities on the global basis," he added.
Huawei made "32.4 billion dollars in revenues last year across 150 different markets, 70 percent of our business outside of China. Huawei is not going to jeopardize its commercial success for any government, period," he said.
ZTE said in a statement immediately after the US House panel released the report: "The committee is operating under a broad assumption that any Chinese company must have 'ties' sufficient to enable China's government to direct or control business operations, even including authority to require access to Chinese companies' telecom infrastructure equipment for purposes of espionage and sabotage of critical US telecom infrastructure."
"ZTE has been forthcoming in responding to this assertion. China's government has never requested such access to ZTE equipment; and ZTE expects China's government never to do so. If China's government were to demand such access, ZTE would be bound by US law," said the statement.
ZTE's US telecom infrastructure equipment sales last year were less than US$30 million. In contrast, two of the larger Western vendors alone had combined US sales that topped US$14 billion, ZTE told the committee, an apparent reference to Espoo, Finland-based Nokia Siemens Networks and Paris-based Alcatel Lucent.
"It seems self-evident that the universe of companies examined by the committee is so small as to omit most of the equipment actually employed in the US telecom infrastructure system," ZTE said in a September 25 letter to the panel.