Huawei, ZTE risks 'overstated'

Updated: 2012-11-13 07:32

By Wang Jun in Los Angeles (China Daily)

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Congressional report 'politically' driven, says former top Clinton aide

A former top US official who served under Bill Clinton has branded last month's House of Representatives Intelligence Committee report, alleging China's Huawei Technologies Co and ZTE Corp posed risks to US national security, as "vastly overwritten and overstated".

Speaking exclusively to China Daily, Mickey Kantor - who served as US trade representative from 1993 to 1996, followed by nearly a year as US secretary of commerce - said the report was politically motivated, coming as it did, in election year in the country.

The long-time advocate of open trade said he regrets the anti-China rhetoric that flared up during the presidential campaign.

But he added that now the race to the White House is over, with Clinton's fellow-democrat President Barack Obama winning a second term in office, he expected people, or at least US politicians, to talk more rationally about China-related issues.

Referring to the Intelligence Committee report, which alleged illegal conduct and was vigorously denied by the two Chinese companies, Kantor said: "You've got to remember this is a political year in the United States. Therefore, people believed that if you criticize China, that will help you politically. I'm sorry that's the case."

"I believe the report is vastly overwritten and overstated," he said. "Interestingly enough, the report admits they have no evidence that Huawei and ZTE have done anything."

The congressional report capped a series of actions by Obama's administration involving US trade with China.

In mid-September, the White House filed a trade complaint with the WTO claiming that Beijing subsidizes automobile and auto-parts exporters.

Later that month, Obama then said he was blocking Ralls Corp, a Chinese-owned company backed by leading Chinese construction machinery conglomerate Sany Group, from erecting wind turbines near a navy test site in Oregon - the first time in 22 years that a US president had barred a foreign investor for national security reasons.

In stark contrast to this year's anti-Chinese US sentiment, an Asia Society report titled An American Open Door reported last year that Chinese direct investment in the US was "soaring, both in value and number of deals".

The report, undertaken by the society's Center on US-China Relations and the Kissinger Institute on China and the US at the Woodrow Wilson International Center for Scholars, outlined the relationship's enormous potential to create economic growth.

But it had warned the US may squander immense opportunities for employment and investment gains through political fear-mongering.

It said Chinese companies had established operations and created jobs in at least 35 of the 50 US states, across dozens of industries, such as manufacturing and services.

"The actual number of (US) jobs that Chinese investors have created likely exceeds 10,000 - many times the official estimate," the report said.

"If China follows the pattern of other emerging economies, more than $1 trillion in direct Chinese investment will flow worldwide by 2020, a significant share of which will be destined for advanced markets such as the United States," the Asia Society added.

Kantor, who was also a key member of the Clinton administration's team on trade-led negotiations that formed the WTO in 1995, makes the point that all governments have security laws to protect themselves against commercial acquisitions of home-grown technology.

"What interests me is that the US government continues to focus on Huawei," he said.

"Now companies that compete with Huawei are pressing the US government to take their side, and they're trying to convince the government that Huawei is doing something wrong."

The former official added he was concerned that such claims could have escalated to the point they have, without firm evidence being cited.

"Everyone's technology can be hacked," he said.

Last year, The Washington Post obtained a presentation titled "Huawei and National Security", which was prepared by Cisco Systems Inc, the Silicon Valley giant that competes against the Chinese company in the manufacture of networking equipment and other telecommunications gear.

The presentation's content was seen as similar to that of the eventual House committee report.

"It's good if it's healthy and everyone plays fairly, by the same rules," Kantor said of competition between such rival companies.

"But in this case, the report is wrong. I hope that responsible officials in the US government read it, understand that the report is not what it pretends to be, and will act in a mature fashion supporting open trade.

"We can use investment and commercial relations to build our political relations as well," he added.

"Commercial relations are wonderful ways to bring countries closer together because both sides have something to gain and something to lose.

"We've got to be open to each other in promoting our own products and attracting products and investment from other nations.

Kantor's work since leaving government office has seen him guiding US companies' entry into European and Asian markets, and he said the US must turn its concerns over China into opportunities.

"Opportunities to make progress, to cooperate, to sit down and understand each other's goals, aspirations," he said.

"We have many things in common that bring us together. We need to use that as a foundation to build our relations," Kantor added.

"There's a huge amount of Chinese investment in the US. Haier and Lenovo, for instance, have been very viable and have done very well in the US."

Criticisms such as those in the House committee report can be costly to any company, individual or government, Kantor said.

"We are by far the two most powerful nations. Therefore, we have a special obligation to work together."