Huawei, ZTE Under US Scanner For Alleged Chinese Subsidies

June 25, 2012, By Sanjeev Ramachandran

An alleged connection with the Chinese government is making things more difficult for ZTE and Huawei in the US.

US House of Representatives Intelligence Committee chair, congressman Mike Rogers, has turned one more finger of doubt at these Chinese vendors alleging that the Chinese government is helping them sell their kits in the US by subsidizing it, to give them a cutting edge over competition in the market.

Authorities, probing into the alleged links between the Chinese military and these telecommunication companies, are mulling over possible legislation that would help manage any national threats arising from such hidden connections.

Australia has denied Huawei a chance to take part in the bidding for NBN Co contracts citing security issues due to rumored Chinese military links. Officials from Australia, New Zealand, Canada and the UK are in discussion with ten investigators from the committee.

The major fear among the authorities is that such subsidized equipment may help cyber espionage on US companies and government agencies.

According to rumors, Chinese government is giving considerable subsidies to these Chinese vendors in order to help them secure international market share by selling gear multiple times cheaper than their rivals in the local markets.

The committee is planning to file a classified and unclassified report on any national security threat from these Chinese vendors.

As part of this, the committee has issued two letters to the companies asking them to disclose their pricing strategies and connections with the Chinese government.

Though such fears about national security at an era of cyber warfare cannot be laughed at as paranoia, it is funny to recall that all iPads and iPhones which constitute a majority of the gadgets in use in the US, happen to be assembled in China.

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