House panel wants U.S-China telecom mergers blocked

Source: Wash. post

The federal government should block mergers of U.S. firms with Chinese telecommunications companies suspected of ties to the Chinese government to lower the potential risk that such firms could serve as conduits for espionage, a congressional panel concluded.

The recommendation is one of several growing out of a nearly year-long investigation by the House Permanent Select Committee on Intelligence, which is set to issue its report Monday. The report accuses two major Chinese telecoms, Huawei and ZTE, of failing to cooperate fully with the panel’s probe into their operations and alleged ties to the Chinese government and military.

“Huawei and ZTE have failed to assuage the committee’s significant security concerns presented by their continued expansion into the United States,” the report said. “In fact, given their obstructionist behavior, the committee believes addressing these concerns have become an imperative for the country.”

The United States has become more vocal about the growing problem of economic cyber espionage, particularly by China. The U.S. intelligence community has publicly accused China of engaging in widespread cyber theft of corporate secrets. A report last fall by the Office of the Director of National Intelligence singled out “Chinese actors” as “the world’s most active and persistent perpetrators of economic espionage.”

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