In other words, it's business as usual.
With four weeks to go until the US elections, a Congressional committee (ostensibly adjourned for the fall campaign season) chose this day to release a report highly critical of two Chinese companies who have entered the US market and who threaten to create competitive challenges for American companies. The two, Huawei and ZTE, were labelled threats to national security. Coincidence? Nah. We didnt think so either.
The issue of Chinese spying and the theft of intellectual property are practically synonymous with Chinese commercial enterprises in the US and Europe. The perception in the west is that the monolithic Chinese state government security apparatus has open access to technological and electronic products which can then be used to gather intelligence about western companies that purchase them - as well as other companies that connect with them.
US paranoia about Chinese hacking of US electronic systems is feverish in the quietest of times. During an election campaign, use of the word 'China' infers job loss and the decline of US economic or military status. Huawei and ZTE were singled out because they have entered the markets for routers and connectors and are inside both the commercial and security fence. They are also of sufficient scale and sophistication to pose a business threat to industries deemed essential to US economic as well as homeland security.
China has, for this election season, become the boogie man everyone fears. Huawei and ZTE are the tips of its spear. Even though they employ thousands of US workers and have made an effort to integrate themselves into the global supply chain, the perception remains in the west that they must do the Chinese government's bidding when asked. And, to be truthful, as the saying goes, 'just because you're paranoid doesnt mean they're not out to get you.'
These injunctions will hurt Huawei and ZTE sales. The irony is that in the US, the FBI, CIA, Defense Intelligence Agency and others have demanded that US tech companies provide similar access. In some cases they have gone to court to secure it.
US security fears may be well-founded, but so may business concerns that this will be an expensive stand-off for both countries. The danger is that this may eventually lead to economic sanctions and a hardening of relations on both sides. JL
John Koetsier reports in VentureBeat:
The U.S. Congress Intelligence Committee and telecommunications vendor Cisco are agreed on one thing: Chinese networking equipment companies can’t be trusted.
Whether that’s just political posturing and jingoistic protectionism or the plain simple facts of global geopolitics depends a lot on who you believe. According to Reuters, this morning Cisco killed a seven-year partnership with Chinese networking manufacturer ZTE after investigations reportedly showed that ZTE sold banned technology to Iran. Sending U.S.-developed technology that could allow Iran to monitor and control internet usage violates U.S. sanctions against that country — and could put Cisco’s U.S. business in jeopardy.
According to Cisco’s financial statements, more than half of its revenue is from North and South America, and most of that will be from the U.S. Cisco had partnered with ZTE, licensing the up-and-coming company Cisco-developed technology, in an attempt to fight the larger and more dangerous competitor, Huawei, in emerging markets.
Coincidentally, perhaps, the U.S. House of Representatives’ Intelligence Committee released a draft report saying, in part, that both Huawei and ZTE “cannot be trusted to be free of foreign state influence,” and therefore, U.S.-based internet service providers and telecommunications companies should “seek other vendors” for infrastructure projects.
This is not new.
Congress has been concerned about China electronically spying on the U.S. for some time now. The concern is that since Chinese companies either have close ties to the Chinese government, or can be compelled to allow significant amounts of government access to their technology, products used in the sensitive telecom industry could contain backdoors or intentional security holes to facilitate espionage.
Very similar, of course, to what the FBI wants Facebook, Twitter, and Skype to grant it. Or to what the NSA was rumored to have built into various version of Windows.
China has been accused of industrial espionage many times, as well as spying on activists and political dissidents, and very recently was reported to be attempting to access military systems in the White House itself (and not for the first time). So it’s hard for China to wear the white cape here.
But that doesn’t stop the country from trying, and a spokesman for China called upon Congress to “set aside prejudices and respect the facts,” according to Reuters, as well as offering a veiled threat, saying that the U.S. should “do more that is beneficial to Sino-American economic and trade ties, rather than the contrary.”
The story won’t end here.
But if it continues in the current path, this war of words threatens to become something more substantial, potentially involving trade sanctions on both side.
0 comments:
Post a Comment