The U.S. House intelligence committee will be investigating Huawei and ZTE to see if these companies will pose a potential threat to U.S. security as it expands its phone and telecom equipment business. Is this a legitimate look at protecting the nation’s interest or is this xenophobia that will lead to another Red Scare?
ZTE and Huawei have been growing by leaps and bounds over the last few years with a stronger telecom equipment presence around the world and a bigger stake in the mobile handset market. In fact, ZTE is now the fifth-largest handset maker in the world, even with just a piddling presence in the United States. The probe will see if allowing these companies to have larger roles in the U.S. telecom infrastructure will make the nation more vulnerable to hacking from the Chinese.
This isn’t the first time that the U.S. has cast a suspicious eye at these Chinese companies, as Huawei walked away from its 3Leaf acquisition over similar concerns. There have also been credible evidence that the elements within the Chinese government have used hacking against the United States and cyber warfare will undoubtedly be a part of nearly any future conflicts between countries. Because of that, I do understand taking a close look but a lot of this seems like pandering with a touch of xenophobia.
Huawei and ZTE seem ready for the scrutiny.
“Our company is publicly traded with operations in more than 140 countries and we are confident a fair review will further demonstrate ZTE is a trustworthy and law-abiding partner for all U.S. carriers and their customers,” Mitchell Peterson, ZTE spokesperson, told Bloomberg.
I understand not wanting to put your valuable infrastructure in the hands of a foreign company that could potentially use that against you. I don’t think that’s what ZTE and Huawei are planning at all but I can kind of dig the sentiment. But it’s not like American companies are stepping up to provide this, as many companies find it cheaper to outsource the infrastructure for higher margins and profits. If it truly is a national priority to have American control of this infrastructure, then it might take some government spending on it or at least incentives for American companies.
What’s your take?