According to a draft report that will be released on Monday, the U.S. House of Representatives’ Intelligence Committee has decided that the rapid expansion by Chinese telecom equipment makers Huawei and ZTE in the U.S. market is a potential threat to national security. The report based on an 11-month investigation claims Huawei and ZTE could possibly be working with the Chinese government for non-commercial reasons.The report comes as Huawei is reportedly mulling over an IPO. Both Huawei and ZTE have rebutted the report and have called it baseless.
“Baseless suggestions otherwise or purporting that Huawei is somehow uniquely vulnerable to cyber mischief ignore technical and commercial realities, recklessly threaten American jobs and innovation, do nothing to protect national security, and should be exposed as dangerous political distractions from legitimate public-private initiatives to address what are global and industry-wide cyber challenges,” said Huawei spokesman William Plummer.
ZTE also issued a statement saying it ”profoundly disagrees” with the allegations that it’s engaging with Chinese government espionage and that it “should not be a focus of this investigation to the exclusion of the much larger Western vendors.”