China derides U.S. "Cold War mentality" towards telecoms firm Huawei

BEIJING Sat Nov 10, 2012 10:47pm IST

A man walks past an advertisement board showing the logos of Huawei and ZTE on it, outside a mobile phone repair shop in Wuhan October 11, 2012. REUTERS/Stringer/Files

A man walks past an advertisement board showing the logos of Huawei and ZTE on it, outside a mobile phone repair shop in Wuhan October 11, 2012.

Credit: Reuters/Stringer/Files

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BEIJING (Reuters) - The United States is exhibiting a "Cold War mentality" with its fears that Chinese telecommunications equipment manufacturer Huawei poses a security risk because of its ties to the Communist Party, China's commerce minister said on Saturday.

The U.S. House of Representatives' Intelligence Committee warned last month that Beijing could use equipment made by Huawei, the world's second-largest maker of routers and other telecom gear, as well as rival Chinese manufacturer ZTE, the fifth largest, for spying.

The report cited the presence of a Communist Party cell in the companies' management structure as part of the reason for concern.

The state role in business prompted a U.S. congressional advisory panel to complain this week that Chinese investment in the United States had created a "potential Trojan horse".

"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," Commerce Minister Chen Deming, himself a Communist Party member, told reporters on the sidelines of the 18th Party Congress, which will usher in a new generation of leaders.

"If you see me as a Trojan horse, how should I view you? By this logic, if the Americans turned it around, they would see that it's not in their interest to think this way."

All Chinese state-owned enterprises and a growing number of private Chinese firms have a Communist Party secretary at the top of their management structure. In most cases, the top management are themselves party members.

Neither Huawei nor ZTE is state-owned. Huawei is owned by its employees and ZTE by different institutions.

Suspicions of Huawei are partly tied to its founder, Ren Zhengfei, a former People's Liberation Army officer. Huawei denies any links with the Chinese military and says it is a purely commercial enterprise.

China's Commerce Ministry last month dismissed the U.S. suspicions as groundless.

"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," spokesman Shen Danyang said.

(Reporting by Lucy Hornby; Editing by Nick Macfie)

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Comments (1)
Aboriginal1 wrote:
Chen Deming does not seem to remember that China places rigid requirements on foreign companies who want to do business in their country many of which result in the transfer and loss of intellectual property and other problems not encountered when dealing with more reputable countries (regions). China itself is the real trojan horse to business ventures.

The problems for ZTE and Huawei range from their inability to operate independently from government intervention and monitoring to the poor business and ethical issues that surround the companies and their awkward activities in other countries. There are plenty of bodies of companies and individuals left languishing in the business world from trying to do honorable deals with two very dishonorable companies.

Nov 10, 2012 4:42am IST  --  Report as abuse
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