“China’s top telecoms gear makers should be shut out of the U.S. market as potential Chinese state influence on them poses a security threat, the U.S. House of Representatives’ Intelligence Committee said in a draft of a report to be released on Monday,” Jim Wolf and Lee Chyen Yee report for Reuters.

“U.S. intelligence must stay focused on efforts by Huawei Technologies Co Ltd and ZTE Corp to expand in the United States, and tell the private sector as much as possible about the purported espionage threat, the panel leaders said, based on their 11-month investigation of the two firms,” Wolf and Lee report. “Employee-owned and unlisted Huawei is the world’s second-biggest maker of routers, switches and telecoms equipment by revenue after Sweden’s Ericsson. ZTE ranks fifth. In the global mobile phone sector, ZTE is fourth and Huawei sixth… In the U.S. handsets market where Apple Inc and Samsung Electronics dominate, ZTE ranks sixth and Huawei eighth, according to industry figures.”

Wolf and Lee report, “The U.S. panel’s draft report faulted both Huawei and ZTE for failing to satisfy its requests for documents, including detailed information about formal relationships or regulatory interaction with Chinese authorities. U.S. companies thinking about buying from Huawei should ‘find another vendor if you care about your intellectual property; if you care about your consumers’ privacy and you care about the national security of the United States of America,’ panel chairman Mike Rogers [R, MI-08] said in comments broadcast late on Sunday on the CBS News program ’60 Minutes.’ Rogers and the committee’s top Democrat, C.A. Ruppersberger [D, MD-02], have scheduled a 10 a.m. Eastern time (1400 GMT) news conference to release the final, unclassified version of their report.”

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