Asia

China says proposed US legislation against Huawei and ZTE due to 'hysteria'

BEIJING (REUTERS) – China’s Foreign Ministry said on Thursday (Jan 17) that proposed US legislation targeting Huawei, ZTE and other Chinese telecommunications equipment companies was due to “hysteria”, and urged US lawmakers to stop the Bills.

Ministry spokeswoman Hua Chunying made the comments at a regular news briefing in Beijing.

On Wednesday, a bipartisan group of US lawmakers introduced Bills that would ban the sale of US chips or other components to Huawei Technologies, ZTE Corp or other Chinese firms that violate US sanctions or export control laws.

The Bills specifically cite ZTE and Huawei, both of which are viewed with suspicion in the United States because of fears that their switches and other gear could be used to spy on Americans.

The legislation is the latest in a long list of actions taken to fight what some in the Trump administration call China’s cheating through intellectual property theft, illegal corporate subsidies and rules hampering US corporations that want to sell their goods in China.

In November, the US Department of Justice unveiled an initiative to investigate China’s trade practices with a goal of bringing trade secret theft cases.

At that time, Washington had announced an indictment against Chinese chipmaker Fujian Jinhua Integrated Circuit for stealing trade secrets from US semiconductor company Micron Technology relating to research and development of memory storage devices. Jinhua, which has denied any wrongdoing, was put on a list of entities that cannot buy goods from US firms.

On Capitol Hill, Senator Tom Cotton and Representative Mike Gallagher, both Republicans, along with Senator Chris Van Hollen and Representative Ruben Gallego, both Democrats, introduced the Bills that would require the president to ban the export of US components to any Chinese telecommunications company that violates US sanctions or export control laws.

“Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People’s Liberation Army,” Cotton wrote in a statement.

“If Chinese telecom companies like Huawei violate our sanctions or export control laws, they should receive nothing less than the death penalty – which this denial order would provide.”

The proposed law and investigation are two of several challenges that Huawei, the world’s biggest telecommunications equipment maker, faces in the US market.

In addition to allegations of sanctions-busting and intellectual property theft, Washington has been pressing allies to refrain from buying Huawei’s switches and other gear because of fears they will be used by Beijing for espionage.

Huawei’s founder, Ren Zhengfei, denied this week that his company was used by the Chinese government to spy.

Canada detained Ren’s daughter, Meng Wanzhou, who is Huawei’s chief financial officer, in December at the request of US authorities investigating an alleged scheme to use the global banking system to evade US sanctions against Iran.

For its part, ZTE agreed last year to pay a US$1 billion (S$1.3 billion) fine to the United States that had been imposed because the company breached a US embargo on trade with Iran. As part of the agreement, the US lifted a ban in place since April that had prevented ZTE from buying the US components it relies on heavily to make smartphones and other devices.

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