US-Sino Cold War Protectionism in Play


A report of the US House of Representatives Intelligence Committee that blamed 2 leading Chinese technology companies, Huawei (SZ:002502) and ZTE (SZ:000063) for possible threats to US national security is totally groundless and comes out of protectionism, China says.

The report, which was released Monday, charges that China has the means, opportunity and motive to use telecom firms for “malicious” purposes.

Malicious hardware or software implants in Chinese-made telecom components and systems could serve as a potent espionage tool for penetrating sensitive US national security systems, the report, based on wild guesses, alleged.

Turning a blind eye to the 2 companies’ good record, the report suggested Huawei may be violating US laws. But it failed to substantiate its claim with any evidence.

In an open and competitive global market, the Golden Rule for an international company’s sustainable development lies in consistent and strict observation of local regulations and laws.

Huawei’s and ZTE’s great success and world class reputation speak for themselves and serve as counter evidence to the US claims.

Established in Y 1987, Huawei has become the world’s largest telecommunications equipment maker, serving 33% of the global population in more than 140 countries.

According to figures released by Huawei, the company invests about 20% of its U.S. revenue, or US$135-M, into its US R&D centers annually to develop more advanced civilian products.

To safeguard internet security, it also employs 3rd party local test institutions to give safety examination and certification to its products.

Huawei’s Vice President William Plummer has dismissed the committee’s accusations, saying the report politicizes what are cyber-security problems facing the entire industry.

Chinese companies, especially in such areas as energy and telecommunications infrastructure, have long been viewed through “rose colored glasses” by some US lawmakers on misplaced security concerns.

The report lays open a Cold War mentality as well as protectionism among politicians at Capitol Hill to contain Chinese investments, which could offer new business and job opportunities for the sluggish US economy.

Protectionism or anti-market intervention is not a wise choice for Washington. Such practice will harm both economies, as it not only dampens the ambitions of Chinese companies seeking more overseas operations, but costs US citizens jobs and cheaper products brought by the Chinese companies investing there.

It is highly advisable that US politicians stop their “China Threat” rhetoric and adopt a rational view toward business activities of Chinese companies so as to help create a fair and discrimination-free market environment.

A favorable business environment will be conducive to the recovery of the US economy.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

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