A House intelligence committee report gives a stern warning about two Chinese telecommunications giants that have been trying to expand their business in the US, and cautions that China could use their devices to spy on Americans. Huawei Technologies Inc. and ZTE Inc. say the claims are "baseless" and threaten trade relations between the US and China—but the report, due out today, mentions bribery and fraud allegedly perpetrated by Huawei. It also claims that China's Communist Party secretly influences each of the companies, reports the Wall Street Journal.
"We simply cannot trust such vital systems to companies with known ties to the Chinese state, a country that is the largest perpetrator of cyber espionage against the US," says Mike Rogers, chairman of the House committee—which urged the US government to avoid using any equipment made by the Chinese firms. The two named in the report aren't the only Chinese companies causing concern among lawmakers, but their size makes them the biggest threat; Huawei is the second largest provider of telecommunication equipment in the world.