A fiery Congressional report singled out two top Chinese equipment manufacturers -- ZTE Corp. (SHE:000063) and Huawei Technologies Comp. (SHE:002502) -- as a national security threats. However, new details are emerging which suggest that the worst case scenario -- China leveraging its influence on the telecoms to steal U.S. commercial secrets -- has not yet happened.
I. White House Probe: No Spying by Huawei, but Lots of Security Holes
In Huawei's case, suspicion is heightened by the fact the company's founder and chief executive Ren Zhengfei is a former PLA officer, and subject to contractual relations between Huawei and China's People's Liberation Army.
But according to two sources which spoke with Reuters, an 18-month U.S Intelligence review on behalf of the White House found no evidence that Huawei had spied on U.S. companies. White House National Security Council spokeswoman Caitlin Hayden released a carefully worded comment, remarking, "The White House has not conducted any classified inquiry that resulted in clearing any telecom equipment supplier."
But the Reuters sources concurred -- Huawei was not cleared of being considered a security risk, but critically it was not for the spying question. According to the sources Huawei was instead considered to risky for the government to use as a contractor due to vulnerabilities in its firmware and software, which could leave its telecommunication equipment vulnerable to hacker intrusions.
Describes one source of Huawei's code, "We found it riddled with holes."
Networking expert Felix Lindner agrees, saying that Huawei's problems appear to be more than likely due to sloppy coding rather than deliberate sabotage. He reveals, "I'd say it was five times easier to find one in a Huawei router than in a Cisco one."
The supposed classified investigation involved interviewing over 1,000 telecommunications equipment buyers asking them questions regarding Huawei and other top Chinese OEMs.
China's government, as well as Huawei and ZTE, attacked the Congressional report and the suggestion that the Chinese OEMs should be banned from the U.S. market. A ZTE spokesperson pointed out that most American electronics firms also manufacture their electronics in China. Huawei's U.S. spokesperson Bill Plummer commented, "Huawei is a $32 billion independent multinational that would not jeopardize its success or the integrity of its customers' networks for any government or third party. Ever."
The Congressional report suggests its recommendations were based partially on a "classified annex", a source Reuters suggests is likely the 18-month intelligence probe.
II. Possibility for Future Spying is Still Strong
It's important to note that the report does not completely clear Huawei. One source, who investigated Huawei's products between 4 and 6 years ago on behalf of the intelligence community, claimed to Reuters that he had observed code snippets that appeared to be so-called "back-doors" -- deliberately inserted security flaws that would allow later exploitation. Huawei has repeatedly denied such holes exist, amid rumors.
Chris Johnson, a form China analyst for the U.S. Central Intelligence Agency tells Reuters that even if the unconfirmed classified report did clear Huawei of any obvious deliberate spying, that it still represents a major threat in the future tense.
That line of logic has led Canada and Australia to join the U.S. in banning Huawei's telecommunications equipment from government networks. However, Britain recently offered up a dissenting take when its government security experts declared Huawei fully vetted and capable of bidding on government contracts.
Source: Reuters
No comments:
Post a Comment