Wednesday, December 04, 2013

As cyberspying accusations continue, Huawei CEO says company is done with the U.S.,

In mid-July, Michael Hayden, former head of the CIA, accused mobile device and telecommunications manufacturer Huawei of spying for its native land, China. Apparently tired of the accusations, the company is about to exit the U.S. market, Venture Beat reported on Tuesday.

Ren Zhengfei is the 69-year-old founder and CEO of China-based Huawei, and -- speaking in a recent interview with French media -- he said he and his company would no longer look for new business in the United States. He said,
If Huawei gets in the middle of U.S-China relations, it's not worth it. Therefore, we have decided to exit the U.S. market, and not stay in the middle.
It's unclear, though, what exactly Huawei meant by its statement, though. Most of the accusations seem to center around Huawei networking and telecommunications equipment. It's possible that Huawei's mobile business, which Ren said was doing well, could remain:
Our handsets in the United States are still selling well.
A Huawei VP added that despite Ren's statements, the company wasn’t pulling out of the U.S. completely. Instead, Huawei is shifting its focus to markets like Europe, which “welcomes competition and investment,” he said.

Dan Rosen, a partner and China practice leader at the Rhodium Group, an economic advisory firm, said:For research and development, and retail handset provision,
Huawei will likely stick around (the United States for a long time).
Some U.S. officials worry that, considering the company's Chinese roots, Huawei's telecommunications equipment could come with preinstalled malware, enabling the Chinese government to easily spy on or commit cyberattacks against U.S. infrastructure.

In addition to Hayden's cautionary note, in Oct. of 2012, a report from the U.S. House of Representatives Intelligence Committee warned against use of equipment, not just from Huawei, but from fellow Chinese firm ZTE. The report said that:
China has the means, opportunity and motive to use telecommunications companies for malicious purposes. Based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems.
The report, though, stopped short of asking telecommunications firms to boycott the two companies.

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