Eager to expand in the United States, China's biggest technology companies face an America anxious about threats to jobs and national security.
The latest blow: A US report that says telecom equipment makers Huawei Technologies Inc. and ZTE Corp. are potential security threats that Americans should avoid doing business with.
The report, coming amid an American presidential race in which trade tensions with Beijing are a prominent issue, highlights conflicting US sentiments toward China, an important trading partner but a potential strategic rival. US companies see China as both a crucial growth market and a source of competition and industrial spying.
The US report’s concerns about Huawei has caused a bit of a stir in New Zealand too because the Government has contracted the company to help with rolling out broadband initiatives here.
Huawei, founded in 1987 by a former Chinese military engineer, has grown into the world's biggest supplier of network gear, competing with Nokia Siemens Networks and Sweden's Ericsson AB.
The New Zealand Government says it takes security very seriously, but Paul Brislen of the Telecommunications Users Assocation of New Zealand says even if it had similar concerns to the US, the Government would find it near-impossible to block the Chinese company which has built the 2degrees mobile network, and also has involvement in the Ultrafast Broadband Initiative and Rural Broadband Initiative.
“I think a lot of these security concerns are just trade protectionism from the US,” he told Firstline this morning, “I do think that their evidence is rather flimsy… It really doesn’t have any meat behind it at all.”
Last year, Huawei was forced to rescind its purchase of a small California computer company, 3Leaf Systems, after a US government security panel rejected the deal.
The report Monday by the House Intelligence Committee said US companies should avoid doing business with Huawei and ZTE and recommended regulators block them from buying US companies. It said government computer systems should not include components from them because they might pose an espionage risk.
Mr Brislen says the local situation is not as clear-cut. Australia, which has also voiced similar concerns about Huawei to the US, is a major security partner, while the National-led Government has been forging ahead as it attempts to improve trade relations with China, which is seen as a major market for Kiwi exporters.
“To unpick Huawei from New Zealand at this stage you’d have to presumably shut down the 2degrees network, you’d have to get them out of Vodafone where they use the fixed line network, Telecom has been selling handsets, you’d have to roll back the UFB and RBI projects, it’s a big mission at this point and potentially for very little gain,” he says.
China's government rejected the report as false and an effort to block Chinese companies from the US market.
"The Chinese side expresses its serious concerns and strong opposition," Commerce Ministry spokesman Shen Danyang said in a statement Tuesday. He called on the United States to "abandon the practice of discrimination against Chinese companies."
3 News / AP