Two Giant Telecom Companies Banned from U.S. Market

Monday, October 08, 2012

Business as usual just got more difficult with China. The House Intelligence Committee will formally call for the ban of two giant Chinese telecommunications companies, Huawei and ZTE, from operating in the U.S. market.

A draft report says those two companies can't be trusted to be free of Chinese state influence and so pose a security threat. It's a charge the two firms deny. Last month, President Obama stopped a Chinese-owned company from buying four wind farms in the United States, also citing national security concerns.

Shaun Rein is author of the "End of Cheap China" and runs CMR, a consultancy based in Shanghai.

"It's important that people aren't naive. There is increased tension between the United States and China, so people should be worried about security concerns," Rein says. "However, the level of anti-China hysteria that's emerging in the United States from both President Obama and Mitt Romney is something that all Americans need to be concerned about, because it's going to cost jobs creation in the United States." 

Shaun Rein agrees with the Mayor of Toledo that the anti-China rhetoric is worrisome, especially as it escalates during the election season. "By causing them to think twice about investing in America, you definitely are losing thousands of American jobs." 

"We have to have a serious discussion,"  Rein says. "China does pose a threat, in some ways, but we can't exaggerate it."  

Guests:

Shaun Rein

Produced by:

Maggie Penman

Comments [4]

Robert Kits van Heyningen from Rhode Island

Are you aware of the report regarding ZTE phones?

....A team of security analysts studying Android phones several months back found a back door in a device made by ZTE. If the analysts typed in “ZTEX1609523,” they gained complete control over the phone, allowing them to monitor text messages, listen to calls or install malicious programs.
“It certainly was something that was put in there intentionally,” said Dmitri Alperovitch of CrowdStrike, one of the security analysts who discovered the back door, which he called “very unusual.” “You could remain stealth on that device and do whatever you want.”
The company quickly issued a fix after the discovery became public, but Alperovitch said he advises his clients not to buy either ZTE or Huawei products.

Given such reports I think they are making the correct call. see also
http://www.securityweek.com/chinas-zte-ships-smartphone-backdoor-metropcs

Oct. 17 2012 09:25 PM
Dr. Brian Schwartz from Suzhou, China

Living in China the last 27 months has been a sobering experience and puts me firmly in step with Shaun Rein and his measured comments. The real threat to the USA is coming from within and the heated rhetoric from Obama and Romney only serve to divert Americans from looking at the economic and restructuring necessary to stimulate job creation and support the innovation and creativity necessary for that challenge. China-bashing is an easy way out of an embarrassingly poor set of policies to restart, with vigor, the USA economic engine

Oct. 16 2012 12:06 AM
Kim from Malaysia

Well, it may seems that the danger of security threat has been exaggerated but I not so sure. Everything penetrates into a community usually posing as something innocent and clean ( wolf in a sheep clothing) and it strikes swiftly and silently without anyone realizing it. One day it will just be too late!!

Oct. 09 2012 09:26 PM
Mark Kolier from New York, NY

I feel exactly the same way as Shaun Rein does. U.S. National security is a serious issue and sensitive information must be protected. But I don't know that Huawei and ZTE are threats the way the Obama and Romney campaigns would like Americans to believe. After the U.S. election I expect the rhetoric to be toned down.

Oct. 09 2012 10:02 AM

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