Senators Concerned About Chinese Telecom Bid

Eight republican congress members sent a letter to the Obama administration last week asking that they closely review a bid by a Huawei Inc., a massive Chinese telecom corporation, to supply equipment to Sprint Nextel in the U.S.

The letter sites national security concerns as Huawei purportedly had business ties with Saddam Hussein and the Islamic Revolutionary Guard Corps of Iran, which was previously sanctioned by the U.S. for its role in weapons of mass destruction proliferation.

The letter states, “A Chinese company with such a leading role in Iran’s economy, and close relationship with the IRGC, should not be able to do business in the U.S.”

Among the senators who sent the letter were Jon Kyl of Arizona, Susan Collins of Maine, and Christopher S. Bond of Missouri. They expressed concern that Huawei’s position would be threatening because Sprint Nextel supplies equipment to the U.S. military and law enforcement agencies.

“Is there any concern that Huawei, if it gained any measure of control over a U.S. contractor involved with sensitive U.S. government contracts, would present a national security threat for technology leakage or enhanced espionage against the United States?” the letter asks.

The move points out a debate that has been taking place for some time now, where a balance is yet to be struck between open trade and national security—especially when Chinese companies are trying to invest in sensitive U.S. industries.

Huawei executives countered the letter saying that the company only wished to do business with its counterparts in the U.S., and that the Chinese government and military had no sway over the company’s dealings.

The senators dismiss this claim as posturing, pointing out the contracts between the company and the military and government, as well as saying the Chinese government may have directly funded Huawei.

The Senators asked the Obama administration to appoint an investigative team to fully examine the company, its dealings and the potential risks of a deal with Sprint Nextel.