Print 20 comment(s) - last by Monkey's Uncle.. on Feb 22 at 3:43 PM

Some say the U.S. is acting hypocritically given its own spying

According to a Friday account published in The Wall Street Journal, South Korea's government begrudgingly caved to U.S. pressure and successfully lobbied one of its largest cellular carriers to reject a bid for sensitive communications equipment from China's Huawei Technology Comp., Ltd. (SHE:002502)

I. China, North Korea, and South Korea -- a Worrisome Web

Huawei -- a company founded by a former officer in China's People's Liberation Army (PLA) -- reportedly had the leading bid, offering a very competitive rate to sell carrier towers, routing, and switching equipment to South Korea.

South Korea's government was reportedly considering the deal before the U.S. ratcheted up the political pressure, pointing out that Huawei equipment could be used to perform espionage on the U.S. and South Korean military forces, as well as the government of South Korea.

North Korea
North Korea last-year threatened to attack its Southern neighbor. [Image Source: CNN]

The U.S. currently maintains 28,500 troops in South Korea and 15 active military bases [source].  The large American presence has been maintained ever since the end of the Korean War in July 1953.

The equipment in question was to be purchased by UG Corp. (KRX:032640), a sister company of LG Electronics, Inc. (KRX:066570)(KRX:066575).  It would have connected some U.S. military bases and Korean government sites.   UG Corp. is South Korea's third largest cellular carrier.

Ren Zhengfei
Ren Zhengfei, founder and CEO of Huawei, is a former PLA officer. [Image Source: CFP]

U.S. Department of State spokeswoman Jennifer Psaki claimed to Reuters that the U.S. did not force South Korea to reject Huawei, although she confirms U.S. officials did raise concerns with their South Korean counterparts.  She comments:

While the United States has expressed concerns in the past, these decisions were made by the Republic of Korea and the Republic of Korea alone.

Likewise a UG Corp. spokesperson claimed it made the choice on its own free will, stating:

U.S. Forces in Korea is one of our valuable customers, and we will do our best to satisfy our customers

Huawei sign
An employee walks towards a Huawei office in Wuhan, China. [Image Source: Reuters]

But a source of The Wall Street Journal indicates that South Korea's government might have been much more forceful in ordering UG Corp. to reject the bid.  They comment:

To address these security concerns, South Korea decided to make changes to the project so that sensitive South Korean government communications won't pass through Huawei equipment.

The U.S. government has been known to block sales of Huawei and other Chinese telecommunications equipment makers since at least 2010.  In 2010 Sprint Corp. (S) rejected bids by Huawei and its local rival ZTE Corp. (SHE:000063).  The U.S. late last year convinced Australian telecoms to stay away from Huawei and ZTE equipment, as well.

II. Hypocrisy?

The market interference has raised criticism from some.

Chinese firms complain that they're being unfairly attacked.  They argue there's no evidence they compromise their business partners' data for the Chinese government.  They also attack the other side of the debate, pointing out that many U.S., Canadian, and European telecommunications equipment makers manufacturer parts or even entire products in China and could be equally vulnerable, were the risk real.

And late last year the world obtained evidence that the U.S. National Security Agency (NSA) was intercepting electronics shipments and planting bugs in them, including tiny wireless transmitters and malicious firmware.  Those revelations led the U.S. to face similar criticism as Huawei has faced.

In December Brazil's national government shot down a bid by The Boeing Comp.'s (BA) for a $4.5B USD jet fighter contract, saying the American company was a security risk.  The F/A-18 Super Hornet was formerly the front runner for the contract according to Reuters.  Now the update to Brazil's jet fleet will go to Swedish Saab AB (STO:SAAB-B) which will provide the South American nation 36 new Gripen NG fighters by 2020.

The NSA spying is expected to cost the IT space $21.5-35B USD (according to the Information Technology and Innovation Foundation (ITIF)) over the next three years, due to damaged trust in the international community.
Cottonmouth receiver
The U.S. has been revealed to actively spy on its allies and enemies via sabotaging electronic equipment. [Image Source: NSA via Der Spiegel]

A former NSA director -- Michael Hayden -- last summer accused Huawei of actively spying for the Chinese government.  Officially, though, no evidence of such claims has been produced.

Following a 2012 Congressional discussion about banning Chinese OEMs due to security concerns, a White House report found no instances of active spying in the wild by Chinese equipment makers.  However, it said such spying could occur in the future.  Currently Huawei, ZTE, and others are not banned from the U.S. market, but they have been minimized in it, thanks to the government pressure.

Sources: The Wall Street Journal, Reuters

Comments     Threshold

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By chromal on 2/18/2014 2:42:46 PM , Rating: 2
The large American presence has been maintained ever since the end of the Korean War in July 1953.

How can you write about South Korea if you don't know that the Korean War isn't over and never ended. We have a long-running armistice, which is not the same thing as "the war ended."

RE: nope.
By LBID on 2/19/2014 3:06:00 PM , Rating: 2
You beat me to it, sir. Hard to believe that anyone with even a cursory knowledge of the Korean peninsula would say something so patently false.

By MechanicalTechie on 2/17/14, Rating: -1
RE: Ugh!
By coburn_c on 2/17/14, Rating: -1
RE: Ugh!
By ritualm on 2/17/2014 7:39:38 PM , Rating: 2
US to South Korea: it's only okay when we, not the Chinese, spy on you.

Stop being an NSA apologist.

RE: Ugh!
By SlyNine on 2/17/2014 10:48:38 PM , Rating: 2
Yes, because China has been as helpful to South Korea as the US has been.

RE: Ugh!
By inperfectdarkness on 2/18/2014 1:18:50 AM , Rating: 2
Well let's be historically accurate and fair:

If China had GTFO of N.Korea--and stayed out--there would be no N. Korea today. Just Saying.

RE: Ugh!
By bug77 on 2/18/2014 7:08:55 AM , Rating: 2
Well, I may not be ok with a friend going through my own stuff, but I'd sure call the police if some stranger did it.
Though both are objectionable, the situations are very, very different.

RE: Ugh!
By Reclaimer77 on 2/17/2014 7:45:38 PM , Rating: 1
How much longer do they think people are going to accept this?

Uhh those same people reelected Obama and kept this Administration in power. Sooooo, yeah...

RE: Ugh!
By FITCamaro on 2/18/2014 8:53:10 AM , Rating: 1
While you know my hatred of the Obama administration, we can be fair and say this goes back longer than him. However for a guy who ran on a platform of "change", the only things that have changed are less economic freedom, less rights to live according to your faith (unless you're anything other than Christian), more government intrusion into life, and less transparency in government than ever.

RE: Ugh!
By tayb on 2/18/2014 8:57:30 AM , Rating: 2
Can you expand on the "less rights to live according to your faith" bit? I would love to hear more.

RE: Ugh!
By HostileEffect on 2/17/2014 9:36:16 PM , Rating: 2
Reasons to pick a fight haven't out weighed responsibilities to families and soft living. Given how much the anti-big government speech has grown over the last four years, I sense the breaking point is very near.

The sad part is the scum that got us here will probably leave the country and live it up else where.

RE: Ugh!
By SlyNine on 2/17/2014 10:45:47 PM , Rating: 2
Sorry. This is not the same thing. China is friendly to NK, SKs ENEMY. The spying here could cause one side to lose a war. It would be stupid for NK to introduce such a liability; Regardless of how we feel about the US's spying (on its own citizens).

RE: Ugh!
By SlyNine on 2/17/2014 10:46:59 PM , Rating: 2
It would be stupid for NK to introduce such a liability
of course I meant South Korea.

RE: Ugh!
By ritualm on 2/17/2014 11:45:46 PM , Rating: 2
China is friendly to NK

Only because it serves as a regional deterrent to US influence in the far east, and one of NK's exceedingly few trading partners. Friendly? Nope, because China isn't happy about NK's continued military intransigence.

Territorial disputes are one thing. All out nuclear war instigated by a mad dictator is quite another.

RE: Ugh!
By StevoLincolnite on 2/18/2014 1:59:43 AM , Rating: 2
How much longer do they think people are going to accept this? I have many friends and collegues starting to boycotting american good and services because how they feel toward TEAM America.

I have already boycotted American goods and services if a company has been in bed with the NSA.
I have a right to my privacy and freedom, especially from other countries.

RE: Ugh!
By atechfan on 2/18/2014 9:10:43 AM , Rating: 2
That doesn't leave you many options, seeing as MS, Google, and Apple have all shared with the NSA. I guess your phone will have to be a Blackberry?

RE: Ugh!
By coburn_c on 2/19/2014 3:04:14 AM , Rating: 1
Why don't you get the fuck off America's internet then.

RE: Ugh!
By Monkey's Uncle on 2/22/2014 3:38:50 PM , Rating: 2
It ain't "America's Internet".

RE: Ugh!
By Monkey's Uncle on 2/22/2014 3:43:54 PM , Rating: 2
How many of those goods and services do you think are actually Made in the USA? Where you gonna get your gas? Do you use electricity in your house? Who picks up your trash? Plows the snow off yojur road? Teaches your kids their Readin', Writin' and 'Rithmetic? I would bet most of the crap the NSA is bugging is made in China like just about everything else.

Good luck with your boycott of all things American!

"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il

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