US panel warns of cyber espionage threat from Chinese telcos

The panel also recommended that US government systems should exclude Huawei or ZTE equipment or component parts.

Washington: A committee of US lawmakers on intelligence Monday warned of cyber espionage threats from telecom networks built by Chinese companies and suggested that Amercian companies considering to do business with Huawei and ZTE should look for other vendors.

In its report, the US House of Representatives' Permanent Committee on Intelligence said the US companies should take into account the long-term security risks associated with two Chinese firms -- Huawei and ZTE -- providing equipment or services to our telecommunications infrastructure.

The panel also recommended that US government systems, particularly sensitive systems, should exclude Huawei or ZTE equipment or component parts.

Huawei said in a statement it has cooperated with the Committee in an open and transparent manner, but the panel has "failed to provide clear information or evidence to substantiate the legitimacy of the Committee's concerns".

It also said the Committee appears to have been committed to "a predetermined outcome" and its report has used "many rumors and speculations to prove non-existent accusations".

ZTE could be be reaced for immediate comments.

The panel has warned of "heightened threat of cyber espionage and predatory disruption or destruction of US networks if telecommunications networks are built by companies with known ties to the Chinese state, a country known to aggressively steal valuable trade secrets and other sensitive data from American companies."

The report further said Huawei and ZTE provided incomplete, contradictory, and evasive responses to the Committee's s core concerns during its investigation.

The report follows a year-long probe into the national security dangers posed by Huawei and ZTE, the two largest Chinese telecommunications companies doing business in the US.

The panel said that ZTE, when asked about its R&D activities, said that "it had established 18 state-of-the-art R&D centers throughout China, France, and India, and to employ over 30,000 research professionals."

"ZTE failed, however, to answer Committee questions about the technologies it may create or sell to the Chinese government and military," the report said.

In its recommendations, the panel suggested that the US government systems and contractors, particularly those working on sensitive systems, should exclude any Huawei or ZTE equipment or component parts.

It also sought blocking of mergers or acquisitions involving Huawei and ZTE due to national security concerns.

The panel said that "Huawei, in particular, must become more transparent and responsive to US legal obligations."

"We have to be certain that Chinese telecommunication companies working in the US can be trusted with access to our critical infrastructure," the panel Mike Rogers said.