ZTE has hit back at a US report blackballing it as a supplier, arguing that if the House Intelligence Committee really believes Chinese hack threats are so significant, all Chinese-made hardware should be rejected. Describing itself as “China’s most transparent, independent, globally focused, publicly traded telecom company,” ZTE takes no small amount of issue with the security report’s suggestions that US firms should look elsewhere for safe networking, telecoms, and other hardware. In fact, ZTE alleges, its inclusion in the investigation was based solely on its prominence as a known Chinese company, not because of “any pattern of unethical or illegal behavior.”
That blanket approach to security caution is unfeasible, ZTE argues, given the predominance of China-based production of equipment from so many vendors. “Particularly given the severity of the Committee’s recommendations, ZTE recommends that the Committee’s investigation be extended to include every company making equipment in China, including the Western vendors” the company counters. “That is the only way to truly protect US equipment and US national security.”
ZTE and Huawei were singled out by the US committee over concerns that the Chinese government could use backdoor loopholes in telecoms hardware to access trade secrets among American companies as well as to commit acts of cyberterrorism. In a series of recommendations, the bipartisan group suggested that US companies should look to other suppliers for safer equipment, and called for greater oversight into international hardware orders along with a block on acquisition and merger attempts by either Chinese firm.
“Given ZTE’s cooperation and the facts ZTE has presented to the Committee, ZTE is disappointed that the Committee chose to narrowly focus its review on just the two largest Chinese companies and to exclude Western telecom vendors and their Chinese joint venture partners. Given that virtually all US telecom equipment is produced in China, in some measure, the Committee’s narrow focus addresses the overall issue of risk to US telecom infrastructure so narrowly that it omits from the Committee’s inquiry the suppliers of the vast majority of equipment used in the US market. ZTE is a relatively small US telecom infrastructure equipment supplier in comparison with most of the Western vendors. Sales of ZTE’s telecom infrastructure equipment in the US comprised less than $30 million in revenue last year. Two Western vendors, alone, last year provided the US market with $14 billion worth of equipment” ZTE
Huawei has already voiced its protest, accusing the committee of being “committed to a predetermined outcome” despite its best efforts at openness. ZTE has taken a slightly different approach, highlighting its existing work with the so-called “Trusted Delivery Model” that sees the company’s hardware, software, and firmware all reviewed “by a highly respected independent US threat assessment laboratory.”
You can find ZTE’s full statement here.