China has two major telecom companies - Huawei and ZTE. Both companies create networking devices and Android phones. The latter are becoming more popular in the US as they make some of the smallest phones on the market. That popularity has become concern as the House Intelligence Committee says both companies are security threats.
For the past year, the House Intelligence Committee has been probing the inner workings of Huawei and ZTE. US lawmakers are concerned that these two companies would help China access the critical infrastructure in the US. The fears are not entirely unfounded either as Huawei was founded by Ren Zhengfei, a former member of the People's Liberation Army. This gives Huawei a close relationship with China's military that makes US officials uneasy.
For their part, both Huawei and ZTE are dismissing the claims as nothing but paranoia. In fact, Huawei's vice-president, William Plummer, had this to say on the matter:
Purporting that Huawei is somehow uniquely vulnerable to cyber mischief ignores technical and commercial realities, recklessly threatens American jobs and innovation, does nothing to protect national security, and should be exposed as dangerous political distractions.
Even so, the House Intelligence Committee says that Huawei and ZTE both provided "incomplete, contradictory, and evasive responses" during the investigation. This has led the House to recommend that all US companies and federal contractors refrain from using Huawei or ZTE products.
Adding to all the fear, the White House was attacked last week by hackers. The Obama administration wouldn't say where the attack came from, but other reports claimed China was behind the attack. This recent attack probably only further confirmed the House committee's fears.
China is going to remain a hot button issue as we near the presidential election. Both candidates are going to speak on their foreign policy in regards to China. It remains to be seen if either candidate will bring up this latest report as reason to start being more cautious around China.[h/t: BBC]