Huawei and ZTE...a Threat to the U.S.?

Last week, in a draft report, the Intelligence Committee of the House of Representatives urged American companies to avoid doing business with Huawei and ZTE, two of China's largest telecommunications companies. Huawei, the world's second largest telecom company after Ericsson, and ZTE, its smaller rival in China, were found to be national security threats. The report goes on to urge U.S. regulators to block all mergers and acquisitions by the two companies in the U.S. For the reason stated for these actions was that the 2 companies could not proof that they were not influenced by the Chinese Communist Party. However, being the largest telecom companies in China, Huawei and ZTE would not be able to be completely free from Chinese government influence...that is just how business in China operates. If U.S. regulators truly blocked all Huawei and ZTE investments into the U.S., it would be losing out on a lot of job creating foreign investments (Huawei is investing $2 Billion into the UK). Many people believe that this action was just another political positioning before the November elections, but, no matter what the reason, it definitely sends a bad message to the Chinese investors.