Chinese telecom giants hit back at US allegations

 US blacklists China's tech giants 

 VIDEO: US BLACKLISTS CHINA’S TECH GIANTS CCTV News - CNTV English



US lawmakers have alleged so-called security threat from Chinese telecom giants Huawei and ZTE. The two Chinese tech companies have denied such allegations.

But the U.S. House of Representatives’ Intelligence Committee said it will release findings of a nearly year-long investigation of the alleged security risk on Monday local time.

Huawei and ZTE have had a tough time in the US, and now, it’s going to get even tougher.

The black listing of the two Chinese tech giants, comes amid U.S. allegations that the companies are involved in economic espionage and could pose a risk to the country’s telecommunication infrastructure.

A draft report by the House Intelligence Committee dominated by the Cold-War thinking, says the two firms "can’t be trusted" to be free of influence from the Chinese government and could be used to undermine US security.

In response, China’s foreign ministry has warned the US not to harm the interests of both countries.

Hong Lei, spokesman of Chinese Ministry of Foreign Affairs, said, "Investment by China’s telecommunications companies in the United States showed the countries have mutually beneficial relations. We hope the US will do more to benefit the interests of the two countries, not the opposite."

The firm’s top executives appeared at a hearing held by the panel last month, stressing that they were focused on business, not politics.

Charles Ding, Huawei Vice President, said, "It would be immensely foolish for Huawei to risk involvement in national security or economic espionage."

Zhu Jinyun, ZTE Vice President, said, "Would ZTE grant China’s government access to ZTE telecom infrastructure equipment for a cyber attack? Mr. Chariman, let me answer emphatically: no!"

Both Huawei and ZTE have rejected the allegations that their expansion in the United States poses a security risk and have denied any ties with the Chinese government.

Huawei said that it was "globally trusted and respected."

Although being the second largest telecom equipment maker in the world, the company has already had to drop several of its attempts to expand in the US -- due to allegations from U.S. lawmakers. 

US report accusing firms of being security threat sparks angry denial

Two telecom giants rejected as "baseless" the findings of a US congressional investigation that accused them of posing a national security risk.

The allegations indicated growing commercial disputes between China and the United States, especially in the high-tech sector, trade experts said.

Huawei Technologies Co, the world's second-largest telecom equipment manufacturer in terms of revenue, described the US congressional report as containing "dangerous political distractions” from normal business practice.

"Baseless suggestions purporting that Huawei is somehow uniquely vulnerable to cyber mischief ignore technical and commercial realities, recklessly threaten American jobs and innovation, do nothing to protect national security, and should be exposed as dangerous political distractions from legitimate public-private initiatives to address what are global and industry-wide cyber challenges,” Bill Plummer, Huawei's US vice-president of external relations, said in an e-mail to China Daily.

The US House of Representatives’ Intelligence Committee said that Huawei and ZTE Corp, the world's fifth-biggest telecom gear maker, should be excluded from the US market because they pose a security threat.

ZTE urged the committee to extend equal treatment to all telecom equipment makers because "most or all US telecom equipment is made in China, including that provided by Western vendors”, it said in an e-mail to China Daily.

China hopes the US will "respect reality, discard biases and improve economic relations between China and the US, not vice versa”, Foreign Ministry spokesman Hong Lei said on Monday.

The report, which came amid rising trade disputes between the two countries, surprised experts.

"The report is not just about economic issues, but goes further with guesswork about alleged conspiracy," said Huo Jianguo, director of the Chinese Academy of International Trade and Economic Cooperation Institution. "It has obvious political intentions because displaying a tough attitude to Chinese companies may help win more votes with a presidential election campaign going on,” he said.

More trade disputes are likely to happen in the advanced industries like telecommunications, compared to low-end manufacturing, as Chinese companies move up the value chain and expand globally, Huo said.

There has been an increasingly large number of trade investigations into Chinese exports, led by the US, since 2009.

The committee launched a security probe into the two companies in November. In May, a congressional delegation, including some of the committee members, went to China where they met Ren Zhengfei, Huawei's board chairman, and the top management of ZTE.

On Sept 13, Charles Ding, Huawei's corporate senior vice-president, and Zhu Jinyun, ZTE's senior vice-president for North America and Europe, testified at the House committee hearing. This was the first time the Chinese telecom companies had the chance to communicate with US authorities in public.

In an interview after the hearing, Zhu told reporters that, due to different social and cultural backgrounds, there was one thing he felt difficult to explain to Americans: the relationship between the government, the Communist Party and the enterprise in China, especially when many Congress members still harbor a Cold War mentality and know little about China's development.

"ZTE really understands American concern about cyber security, but we expected more constructive solutions from the US government to address the issue instead of just finger-pointing,” Zhu said.

In a draft of the report made available to Reuters, the panel leaders said that US intelligence must stay focused on efforts by Huawei and ZTE to expand in the US and tell the private sector as much as possible about the purported espionage threat.

"US network providers and system developers are strongly encouraged to seek other vendors for their projects," it said.

The report is likely to have an impact on Huawei and ZTE, both of which are expanding aggressively overseas to fuel growth, said analysts.

"The two companies have been trying to build a larger presence in the US market but failed, and the report is likely to make their business in the US even harder,” said Xiang Ligang, a Beijing-based industry specialist and president of industry website cctime.com.

The companies may find it more difficult to win deals with US telecom carriers and their mobile phone business will be affected, he added.

Huawei, which ranks only after Sweden's Ericsson in the global market, conducts 70 percent of its business outside China. It reported sales of $1.3 billion in the US last year.

The Wall Street Journal reported earlier that Huawei is preparing for a public offering, but the company denied the report later. ZTE has a smaller footprint in the US, mainly through sales of devices like smartphones. Its sales in the US were $30 million last year.

The document cited what it called long-term security risks associated with the companies’ equipment and services but it did not provide detailed evidence, at least not in an unclassified version.

A classified annex provides "significantly more information adding to the committee's concerns,” the draft said.

Based on 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 US and to our systems”, it said.

CBS aired a segment on Huawei on Sunday evening during 60 Minutes. The committee's chairman Mike Rogers told the program's host Steve Kroft: "If I were an American company today, and I’ll tell you this as the chairman of the House Permanent Select Committee on Intelligence, and you are looking at Huawei, I would find another vendor if you care about your intellectual property, if you care about your consumers’ privacy, and you care about the national security of the United States of America.”

Plummer, the only person from Huawei who appeared on the show, insisted that Huawei is a company just doing business.

The company's "$32.4 billion in revenues last year” was obtained from "150 different markets, 70 percent of our business is outside of China. Huawei is not going to jeopardize its commercial success for any government, period”, he told Kroft.

By TAN YINGZI in Washington and CHEN LIMIN in Beijing 
Contact the writers at tanyingzi@chinadailyusa.com and chenlimin@chinadaily.com.cn
Reuters contributed to this story.

Downside of Facebook

Grouses are mounting on the use of Facebook.

According to a recent report, less and less young people in the UK are turning to drugs, partly because they are too busy on Facebook or sending text messages.

“It could be, if they are on Blackberry all the time, that that’s the way they socialise and communicate; you don’t want to be doing that and having a spliff at the same time.” Or so an expert said recently.

Like, why not? Why would having a spliff (joint) stop you from getting on Facebook or sending your friends a text message, or vice versa?

“Just wanted to say high, everybody!” you could write on your Facebook timeline, thereby satisfying two addictions at the same time: the need to get high on drugs, and the need to say “hi” on the Internet.

It also seems that a large number of people go on Facebook when they are drunk, so much so that a browser extension has been developed to prevent them from making embarrassing drunken comments like, “Jenny, you hag. I’m so glad I dumped you.”

Or “My boss sucks big time”. After overlooking the fact that their boss is actually one of their Facebook friends.

Apparently, the software will ask you to do something that only a sober person can do – like recite the alphabet backwards or trace a moving object across a computer screen with your index finger. I’m not sure if I can recite the alphabet backwards with any sort of speed while completely sober, never mind after a couple of glasses of merlot.

If I really wanted to get my message online, I would probably cheat by writing out the alphabet from beginning to end, making it easier to recite it backwards. If you’re really drunk, and you really want to do something, you will find a way.

Of course, after all that faffing around you might get online only to forget what it was that you wanted to say on Facebook. Then your bladder might take charge, so all you get to write is, “Going for a pee, be back in a sec.”

In some Western countries, Facebook’s popularity is waning, with more and more people pulling the plug on their social media accounts.

For example, an increasing number of Australians claim that Facebook promotes a culture of “narcissism and self-absorption.” They are fed up with the constant flow of inane comments like: “Going for a pee, be back in a sec.” Some want to delete their online presence but are afraid of losing contact with their friends.

I’m not sure how that works. If your family and friends make inane, narcissistic comments online, to the extent that you’re irritated by them, why would you want to keep in touch with them anyway?

All you have to do is “unfriend” the irritating narcissistic people in your network and you will be left with people who don’t irritate you – possibly people you have never met before or hardly know.

Another grouse with Facebook comes from former couples who have just split up. It seems that it is easier to extricate yourself from someone in the real world than it is online.

If your ex is one of your Facebook friends, all you have to do is delete him/her, but what about all your mutual friends? If you make an inane comment on Facebook about your current depressed mood, something like, “Bleh, bleh, bleh, bleh, bleh ...”, what’s to stop a mutual friend from writing a response to your comment, thereby enabling your ex to witness your friend’s comment and your depressive state?

Indeed, what’s to stop the person who unceremoniously dumped you from writing a comment on a mutual friend’s timeline to the effect that they have met someone new: the soul mate that they have been waiting for their entire life? And what’s to stop all your mutual friends from “liking” that comment? And you get to watch it all as it unfolds.

Feeling crushed and humiliated, you might want to go out and get drunk. There’s a good chance that you get so inebriated that you want to express yourself online. And there’s also a good chance that your determination ensures you can recite the alphabet backwards and you successfully log onto Facebook.

With a bit of luck, before you have the chance to write anything incriminating about your ex, you might need to go for a pee.

BUT THEN AGAIN BY MARY SCHNEIDER
> Check out Mary on Facebook at www.facebook.com/mary.schneider.writer. Reader response can be directed to star2@thestar.com.my

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Japan rocking the boat to make waves, mostly hitting itself

Japan is striking out diplomatically and politically, hitting mostly itself so far.

IF any country ever wanted to make Japan look bad and feel worse, it could not have done more than Japan itself over disputed islands in the East China Sea.

All parties claiming the five uninhabited Pinnacle (Diaoyu for China, Senkaku for Japan and Tiaoyutai for Taiwan) Islands had long accepted the status quo of lingering disputes because the risk of fighting was too high for any provocative action.

For much of that time, national sensitivities in the disputes were strong enough to ensure that the status quo prevailed.

In the early 1990s for example, a Chinese general declared that the PLA (Navy) would come to Taiwan’s aid if any country challenged Taipei’s claim. Intriguingly, this was despite China and Taiwan occasionally having to work out their differences over their rival claims.

The writing on the wall was that whatever the differences across the Taiwan Straits, China was protective of Taiwan precisely because of its claim to Taipei itself. Taiwan did not question or reject Beijing’s position then or since: Taipei did not regard China’s stand as compromising the US commitment to protecting Taiwan.

This year Vietnam and the Philippines also tangled with China over other rival claims in the South China Sea, with its own separate dynamics. But if any Japanese official thought that would leave China weary enough to be pushed on the defensive, he would soon realise his mistake.

Disputed claims in the East China Sea involving China, South Korea and Japan are also a measure of Chinese and Korean bitterness over Japan’s wartime atrocities in their respective territories.

Both China and Korea suffered gravely under Imperial Japan, and regard modern Japan as insufficiently owning up to its horrific past to make amends for it. Thus Japan’s posturing over disputed territory readily inflames government positions and popular sentiment in China and Korea.

Talk of Japan considering the “purchase” of the Pinnacle Islands from a private owner early this year provoked Beijing and put Seoul on notice. As the purchase drew near in early August, Tokyo released a Defence White Paper re-asserting its claim to the disputed Liancourt Rocks (Dokdo in Korea, Takeshima in Japan).

Within days South Korean President Lee Myung-bak repeated his country’s claim to the territory by personally visiting it, the first for any Korean leader. Japanese officials lambasted his presence there, but media opinion in Japan cautioned against Tokyo overstretching itself with multiple disputes simultaneously.

The idea of purchasing the Pinnacles came in April from the incendiary nationalist Tokyo governor Shintaro Ishihara. His personal politics has enraged China and Korea, with denials of the Japanese massacre of Chinese civilians in Nanjing and the forced sex slavery of Korean (“comfort”) women.

Economy affected

Meanwhile Japanese officials continued to bait China. Last month Japan “nationalised” the islands.
China protested, and anti-Japanese demonstrations erupted in dozens of cities. Protesters targeted retail outlets, resulting in closures and cutbacks in production and distribution.

Employment in China suffered somewhat, but Japan’s economic standing suffered more. Last Thursday an editorial in the Yomiuri Shimbun cited an industry survey indicating Japanese business sentiment in September to be the worst this year.

The commentary quoted the survey as seeing “a bleak outlook... ahead,” with the “scenario... coming off the rails.” It noted that the survey had been done before the latest spat with China, so the situation after September would be worse.

Meanwhile Japanese officials reprimanded China for allowing the anti-Japanese protests to occur. For many in China, Japan’s deliberate act of sealing ownership of the islands by officially nationalising them showed even greater irresponsibility.

Strategically, Japan’s action also brought Taiwan and China closer together against it. Policymakers in Tokyo had not only shot themselves in both feet, but failed to understand what had happened.

Writing in Forbes magazine, Stephen Harner said Japan’s action was “an unmitigated disaster” because economically Japan needed China much more than China needed it. He said “the fundamental truth” was that while China could easily get what it needed from other major suppliers, not so Japan.

Later Harner examined Article 5 of the US-Japan Treaty and questioned a US commitment to defend Japan if hostilities broke out over disputed islands. He noted that after the US Defence Secretary told Japan to behave better on his way to Beijing, Leon Panetta told China that the US was neutral over the dispute and even discussed future US-China military cooperation.

Harner then interviewed Prof Susumu Yabuki, a leading China expert who had warned of the current problems and advocates replacing the US-Japan Treaty with a more realistic “US-China co-dependency.”

After weighing discussions between Japanese and Chinese leaders recently and in the past, Hamer found the current impasse the wilful legacy of Prime Minister Yoshihiko Noda and Japan’s foreign ministry.

Confrontational

In the Washington Post, Chico Harlan reasoned that Japan was becoming more confrontational diplomatically and militarily as China’s rise became more evident. While describing Noda as hawkish, he said all Noda’s likely successors would be even more so.

Columnist Nicholas Kristof in The New York Times reflected on his own longstanding interest in the Pinnacles, observing that the US claimed to be neutral but was actually on Japan’s side. After assessing China’s and Japan’s island claims, Kristof found China’s case to be more persuasive.

In Taiwan’s The China Post, columnist Frank Ching noted that the Chinese government and public both regarded the US as “very much on Japan’s side,” and that Washington should help “calm the conflict it helped create.” Ching mentioned a Chinese foreign ministry document detailing how in the 1951 San Francisco Treaty granting the US trusteeship, Washington “arbitrarily expanded its jurisdiction (over the Ryukyu Islands) to include (the Pinnacles).”

Like Harner, Ching Cheong in Singapore’s The Straits Times found the current problems the clear result of Japan’s actions. He also found Japan not only unable to contain the Pinnacles situation, but opening another can of worms in the disputed Ryukyus (Liuqiu).

He traced China’s connection to these islands to AD621, long before Japan annexed them in 1879. Ching Cheong noted that since the 1943 Cairo Declaration and the 1945 Potsdam Declaration, both the US and the Soviet Union agreed that the islands should be returned to China.

However, with the Cold War the US handed administration of the islands to Japan, for sovereignty to be decided later between Beijing and Tokyo. This vagueness later combined with self-interest to produce the present mess.

The 1972 Sino-Japanese Joint Statement establishing diplomatic relations between China and Japan later required post-war Japan to abide by the conditions of the two declarations. Whether Japan succeeds or fails in that will determine its future, which shall entirely be its own making.

Japan’s ambassador to China Uichiro Niwa had advised against Japan’s confrontational course, but instead of being taken seriously was sacked. Then his replacement suddenly died, and Niwa had to return to the post until another replacement, heightening Japan’s sense of impotent angst.

It’s just not Japan’s year, or century.

On Sept 25 the foreign ministers of Japan and China met in the first of a series of talks to cool down a volatile situation. They may realise that their greatest challenge is not each other’s government, but their own respective publics and popular sentiment on the streets.

Behind The Headlines By Bunn Nagara

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