Chinese high-tech firms interrogated in US

14 Sep 2012, 8:15 am   -   Source: AAP

Chinese companies Huawei and ZTE have denied being influenced by their government, receiving special treatment or posing a security threat to the US.

Two Chinese technology companies are struggling to to convince US politicians they are independent from the dictates of Beijing's communist government.

Raising their right hands, executives of Huawei Technologies and ZTE took an oath before testifying to the House Intelligence Committee, in what was a rare appearance by Chinese business leaders before a congressional panel.

The hearing lasted three hours and the executives answered questions through interpreters.

The committee is finalising a 12-month probe into whether the companies pose a risk to US national security.

They are among the world's largest suppliers of telecommunications equipment and want to expand their operations in the US.

Huawei had to unwind its purchase of a US computer company, 3Leaf Systems, last year after it failed to win approval from a government security panel. Australia in April barred Huawei from bidding to work on the national broadband network (NBN) due to concerns about cyberattacks traced to China.

ZTE has faced allegations about the sale of banned US-sanctioned computer equipment to Iran, and the FBI is probing reports that the company obstructed a US Commerce Department investigation into the sales.

Huawei is a private company, founded by a former Chinese military engineer. ZTE is partly state-owned.

"If you want to do business in the United States," said the committee's top Democrat, CA "Dutch" Ruppersberger, "then you have to tell your Chinese government to stop cyberattacking our businesses".

Both companies denied being influenced by the Chinese government, receiving special treatment or posing a security threat. Company officials said it would be bad for their global business to compromise their customers' networks to any third party.

Huawei corporate senior vice president Charles Ding said that would amount to "corporate suicide".

But the committee chairman, Mike Rogers, criticised the companies for citing Chinese state secrecy laws as the reason for failing to supply all corporate documents requested in the investigation. He also said their testimony failed to satisfy concerns that the companies were subject to Chinese state influence.

"Huawei and ZTE provide a wealth of opportunities for Chinese intelligence agencies to insert malicious hardware or software implants into critical telecommunications components and systems. And under Chinese law, ZTE and Huawei would likely be required to co-operate," Rogers said.

Rogers said the committee has received multiple reports that Huawei's equipment has been known to "beacon" back to China, or relay data without the consent of the user.

He cited unnamed sources overseas as saying that anomalies of equipment from both Huawei and ZTE appeared designed to allow unauthorised access.

Both executives denied that. ZTE senior vice president for North America and Europe, Zhu Jinyun, said all major high technology firms periodically provided patches to fine tune their software. "A bug is not a back door," he said.

"One person's bug is yet another person's back door," Rogers responded.

Both executives said their companies were willing to co-operate with efforts to improve cybersecurity and allow independent testing of their equipment. They said it was unfair to single out companies based in China and exclude from scrutiny Western companies also operating and sourcing equipment from China.

The committee says it will finalise its investigation and issue a public report in early October.

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