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Huawei, the Chinese giant of the cell phone and telecommunications equipment industry, is finding it increasingly difficult to compete in the US market.
This week, the heads of the main intelligence agencies of the United States indicated that they do not advise the use of smartphones of the Chinese brands Huawei and ZTE due to security issues.
In a hearing before the Senate Intelligence Committee, the directors of the Central Intelligence Agency (CIA) and the Federal Bureau of Investigation (FBI) expressed their concern about the possibility that Chinese devices could be used for espionage activities.
“We are deeply concerned about the risks of allowing any company or entity committed to foreign governments that do not share our values to acquire positions of power within our telecommunications networks,” said Chris Wray , the director of the FBI .
Wray said the United States should have “a more strategic perspective on China’s efforts to acquire companies or join other companies” to enter the US market.
And responding to a question from Republican Sen. Tom Cotton, the six heads of intelligence agencies agreed that they would not use or recommend the use of Huawei or ZTE devices.
“Extraordinary links with the Chinese government”
Cotton and Sen. Marco Rubio last week introduced a bill to prevent the government from buying or leasing Huawei or ZTE telecommunications equipment, arguing that Asian companies could use this access to spy on US officials.
The chairman of the Senate Intelligence Committee, Richard Burr , expressed concern about what he described as “counterintelligence and security risks that are embedded in the goods and services of certain foreign vendors.”
“The focus of my concern now is China and specifically companies like Huawei and ZTE Corp, which is widely known to have extraordinary ties to the Chinese government ,” Burr said at the hearing.
Dan Coats, director of National Intelligence, said that “cyber-espionage and the ability of cyber attacks will continue to serve the economic and national security priorities in China.”
Huawei categorically denied that its devices are espionage tools at the service of Beijing .
A Huawei spokesperson quoted by Reuters said the company “is aware of US government activities aimed at inhibiting Huawei’s business in the US market.”
The spokesperson added that the company has the trust of governments and consumers in 170 countries and does not represent a greater cybersecurity risk than other vendors.
Speaking from Beijing, Chinese Foreign Ministry spokesman Geng Shuang said the United States is the most powerful country on the planet.
“I do not know where the feeling of insecurity in the United States comes from,” Geng said.
“But I want to emphasize that in this world absolute security does not exist, and the security of one country can not be placed above the security of another.”
Back of AT & T
Since its founding in 1987, Huawei has become one of the leading suppliers of telecommunications equipment worldwide.
The company has about 180,000 employees and reaches “more than a third of the world’s population” with its products, according to its website.
But the Chinese giant has not managed to consolidate in the US market.
At the Consumer Electronics Show (CES 2018) congress, held in January in Las Vegas, Huawei was expected to announce an alliance with US telephone operator AT & T.
But the operator backed down and several media pointed out that the change in position was due to pressure from the Trump government.
According to Reuters, AT & T withdrew from the agreement after 18 members of the Senate and the House of Representatives signed a letter to regulators expressing concern about the participation of Chinese companies in the US telecommunications sector.
Huawei responded to the decision of AT & T saying that it would launch on its own the star product that the company hopes to compete with Apple, the Huawei Mate 10 Pro, a great challenge for any foreign company.
US users they can buy Huawei phones, for example, from Amazon, but the operators have almost complete control of the market and it is considered very unlikely that a product will be massive if it is not offered in the operators’ catalogs.
Huawei president, Richard Yu , spoke after the announcement of AT & T saying that “everyone knows that in the US market more than 90% of smart phones are sold by operators .”
“It is a great loss for us and also for operators, but the biggest loss is for consumers, because they are left without the best option,” he added.
“We serve more than 70 million people around the world, we have demonstrated our quality, our privacy protection and our security.”
Huawei is not the only Chinese company facing difficulties in the US market.
Regulatory bodies blocked the sale of the Moneygram money transfer company in January to Ant Financial, the digital payment arm of Alibaba , the Chinese consortium dedicated to online commerce.
The value of the sale was close to US $ 1.2 billion, but regulators expressed concern about the possibility of a Chinese company accessing data from millions of US users.