US investigation finds Huawei, ZTE a threat

A US congressional investigation concluded that the US expansion of Chinese telecommunications giants Huawei Technologies and ZTE (0763.HKG, 000063.SHE) posed a threat to national security and may have violated US law, The Wall Street Journal reported. In a report to be released Monday, the committee will urge lawmakers to block the companies’ mergers and acquisitions via the Committee on Foreign Investment. The report will also suggest that US firms, as well as the US government, avoid using Huawei or ZTE products. Although the US is reluctant to upset trade with China, intelligence officials have long been wary of cyber-espionage threats from the country. Huawei and ZTE have routinely denied allowing the Chinese government to use their equipment for surveillance. The two Chinese companies continue to undercut US prices, and both have large shares in the US telecommunications market.