Chinese Telecoms Open U.S. to Spying

House report says Huawei, ZTE give Chinese intelligence opportunities to tamper with U.S. networks.

Huawei Technologies Co. and ZTE Corp., China’s two largest phone-equipment makers, provide opportunities for Chinese intelligence services to tamper with U.S. telecommunications networks for spying, according to a congressional report to be released today.

The House intelligence committee report says the two companies failed to cooperate with a yearlong investigation and to adequately explain their U.S. business interests and relationship with the Chinese government, according to a draft provided by the panel.

‘Economic Espionage’

Rogers and Ruppersberger announced the probe of the Chinese companies last November, citing concerns about hacking into U.S. systems and theft of intellectual property. U.S. counterintelligence officials called China the world’s biggest perpetrator of economic espionage in a report last year, saying the theft of sensitive data is accelerating and jeopardizing an estimated $398 billion in U.S. research spending.

Market Roadblocks

The report’s conclusions may create more U.S. roadblocks for the Chinese companies in the U.S. market.

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