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Despite ties to China's PLA, Chinese company did not actively engage in spying, yet

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."

Huawei router
Huawei's routers are reportedly riddled with security holes -- some of which some analyst claim are deliberate back doors. [Image Source: The Hacker News]

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. 

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

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



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What?
By bug77 on 10/18/2012 5:43:09 PM , Rating: 4
It's like I saw a bunch of thieves parking the moving truck in front of my house and I look inside and conclude: "It's ok, they haven't moved any of my furniture yet."
Are the guys reaching these conclusions brain-dead?




RE: What?
By TSS on 10/18/12, Rating: 0
RE: What?
By MechanicalTechie on 10/18/12, Rating: 0
RE: What?
By Reclaimer77 on 10/18/2012 11:41:41 PM , Rating: 2
quote:
While I don’t agree with you that they should be spying.. but i do agree that without China the US would be fishing out of the toilet to look for its next meal.


And you talk about ignorance? Without China we would have just:
1. Borrowed from someone else.
2. Printed out more money.

Or better yet..

3. Been forced to be fiscally responsible.

This reminds me of the 80's and 90's when Americans thought Japan "owned" most of the US. Now it's happening again only with China. Get a clue. Hell China hasn't held a majority of our debt in forever. They only hold 10% of US Treasuries now. OMG THE SKY IS FALLING!!!

quote:
What amazes me is the arrogance and just total lack of understanding toward china by the average US citizen.


Obviously talking about yourself here.

And you have it totally backwards. Without American, China would be the third world dump it was before we poured trillions into their economy and traded with them. Even at our lowest point, our GDP was TWICE theirs. Hello?


RE: What?
By MechanicalTechie on 10/19/2012 12:34:28 AM , Rating: 1
I’m speechless... you’re the pin up boy for retardation.

Which other country has the available credit to loan to the US? Europe is in the toilet, Japan is up to its neck in domestic debt and you have alienated the majority of the planet.. so that’s not going to work.

Printing money(presume you mean QE) increases inflation, devalues the currency, destabilized the global financial system, makes more countries want to move alway from the greenback as the world reserve currency, become incredibly expensive to pay back when interest rate return back to normal(totally unavoidable) and it doesn’t solve the underlying problem only delays the tonic economic conditions.

Responsible economical management is the only option available if china wasn’t around but is not possible in the current and foreseeable future. Wall Street has too much influence and cares little for the rest of the 99%.

US debt is increasing at 3.9 billion dollars a day, more and more jobs are being offshored, student debt is over 1 trillion dollars, 4 million technical and engineering jobs have been lost in just the past 4 years, only 3 industries (agriculture, scientific instruments and military hardware) exceed exports into import ratio to china, average wealth per citizen is in free fall, 47.2million live below the poverty line and Washington has never been so polar and is controlled by special interest groups.

Yeah really bright future you have there.. just do me one favour vote for Romney.. pleaseeeeeee!!! It would make me so happy :)


RE: What?
By MechanicalTechie on 10/19/2012 1:05:40 AM , Rating: 1
Correction

**4 million technical and engineering jobs have been lost in just the past 9 years


RE: What?
By Alexvrb on 10/19/2012 1:37:28 AM , Rating: 5
I don't think he was championing options 1 or 2. They were for comparison's sake, I'd say. Anyway thanks for being so supportive and insightful. Only, by supportive and insightful I mean nasty and useless.


RE: What?
By MechanicalTechie on 10/19/2012 1:54:26 AM , Rating: 1
Nasty… For stating the bleeding oblivious? American’s bitch about China yet so few of them understand without the BRIC countries (but mainly China) driving the world economy we would all be screwed thanks to the US inspired GFC... and yeah thanks for that!

Greed and corruption going strong in the land of the free.

Plus if it’s 'useless' to punch holes in ridiculous suggestions then what a mixed up world we live in. Using moronic examples to justify a cause helps no one and only propagates misinformation.

Time to face facts the US and Chinas paths will be forever linked and using China as a scapegoat for all your domestic problems is unbelievably short slighted.


RE: What?
By semiconshawn on 10/19/2012 1:56:21 AM , Rating: 3
quote:
and you have alienated the majority of the planet


And yet here you are on an obscure U.S. based techie web site bashing the U.S. and worrying about who we elect for President. Alienated indeed.


RE: What?
By MechanicalTechie on 10/19/2012 2:18:00 AM , Rating: 3
The daily tech isn't obscure.. its a good source of information... be it slightly bais from time to time.

And dont get upset I'm bashing no one.. jsut trying to show the other side of the coin.. which seems to be so taboo. I mean really do you think in your mind the US is seen as a highly respected country that has no history of international crimes and never seen as having double standards? Please open your eyes.

Finally I couldnt care who gets elected.. wont make a difference I just know Romney would alienate the rest of the world further and prove my point more.


RE: What?
By michael67 on 10/19/2012 5:32:03 AM , Rating: 2
quote:
be it pretty bais from time to time.
(in some articles that are some how political or made political)

There corrected it for you. ;-)

But seriously, its pretty simple why Americans cant make a good impartial opinion anymore, because all there news is just at best bias garbage in quality.

I am just back from 2 weeks in Huston and watched the news, and watched both Fox News and MSNBC, seriously cant any of they make any unbiased independent news anymore.

The news is so polarized that there is only black and white left, and there are no shades of gray any more, as in how the real world is colored.

Just yesterday there was a article in a Dutch newspaper was writing about the same thing i was seeing.

Here is a so so, Google translation.
quote:
Split to the bone

NEW YORK - Who are wondering why the U.S. is so divided into two camps, they should enjoy a night zapping behind the TV. There are two different worlds shown. Even a night political humor during the traditional and very venerable Alfred E. Smith Memorial Foundation Dinner by the Fox News channel (right) and MSNBC (left) is as falsely charged as it gets.

For the event, where John F. Kennedy and Richard Nixon in 1960, the first speakers were, came President Barack Obama and his Republican challenger Mitt Romney from their political comfort zone in order to help raise money for Catholic charities. Al Smith, the Catholic governor of New York who once was the first Catholic presidential candidate.

Tradition dictates that the guests of honor at funny way what plague punches together handing, but themselves take the grain. The latter is not the best feature of politicians and makes the White Tie dinner at the Waldorf Astoria in New York so special.

Romney the ball rolling and set the tone:,, Nice to walk around in clothes that we wear at home always. "A reference to his wealth. Another nice:,, Joe Biden is not here. This is unfortunate, who always laughs at least. "A good-natured pitch below the belt to the vice president. Politically convenient:,, My help and support is my wife Ann, who President Obama is Bill Clinton. "

Have you counted them? I have three jokes Romney told. Of bias must be no, we are not Fox News or MSNBC! So here the three merry notes of Barack Obama. At the opening applause:,, Please go to your seat. Before you know it screams Clint Eastwood against you. "That obviously hit on the conference of the Hollywood star at the Republican Convention in which he told an empty chair that Obama would be sitting, talking. And his poor first debate on his wedding took place. ,, I have at least learned that there are worse things than that day gift you forget. "And number three: 'It's nice to be in New York. I bought some in a few stores. Romney has a few shops bought. "

In short, both men put their best foot forward, no doubt helped by professional copywriters and pranksters. On Romney you could see that he felt uncomfortable. A successful joke, he looked somewhat furtive. I thought that was something charming have. This was despite his 65-year suddenly looked like a boy, even do he never really belonged to the most popular in his class, and was now, to his own surprise standing in the spotlight.

And what made it MSNBC? ,, You can see that Romney dose not mean it. He looks like he is stabbed from behind, but it does not wane show it. "

It was true that Obama looked more confident. But I found his smiles also not always true. And what made it Fox? The president was arrogant because he was there with his show business friends who he likes to visit and loves to play golf. This was of course followed by a clip with images of the golfing president instead of hard work rather on the green state.

And who won now? Romney or Obama? That didn't mater to me last night. It is a blessing for the country two days after a fierce debate both ruffs bombard each other with humor. I don't see that happening in Tehran or Islamabad, to name but a few places to mention, not so fast.

Source: http://www.telegraaf.nl/buitenland/amerikaanse_ver...

So how can people make a good independent opinion if only they get bias garbage for news!

I seriously wish that both both Fox News and MSNBC get bombed and replaced by independent news organization like BBCnews.

Or at least the reporters start to watch HBOs "The Newsroom". as that show as a outsider for me shows everything thats wrong with America.
http://www.imdb.com/title/tt1870479/

Americans like to see there president to be people like portrayed in "The West Wing", dignified, honest and smart, what they got is a idiot like Bush, or doubter like Obama. :~(

/Disclamer
I grown up in Holland and was taught to be thankful to the US, as they liberated Holland and my grandmother properly owned her life to the food drops over Holland.

Also hey brought political changes, in how governments should work.
(To bad they did not apply them in the US it self.)

I am not anti Americans, and I write this not to flame, and even do i have many friends in the US, and can get along with most Americans, but for years now i started to dislike the country it self more and more.

Not because the people are unlikeable, but pure because all the damage it dose in the world with its British like colonial behavior, and the lack of its own history, and what it has done to other countries.

As a really small example i use Operation AJAX but thats just one of many, and the US/CIA has done many more like it.
Knowing the real history would be a eyeopener for many Americans, why Iranians (and others) hate and not trust the US.
http://www.cognitocomics.com/operationajax/
http://www.lewrockwell.com/latulippe/latulippe41.h...
/Disclamer


RE: What?
By Ammohunt on 10/19/2012 11:26:06 AM , Rating: 3
quote:
I mean really do you think in your mind the US is seen as a highly respected country that has no history of international crimes and never seen as having double standards? Please open your eyes.


You are either Canadian or English and obviously clueless about America and Americans; you reek of envy for the greatest country to grace the face of the world created not by accident nor by social government. Its clear these fact do contribute to overall unhappiness its typical of your ilk to live miserable joyless lives.

I would like to hear what international crimes we are responsible for? perhaps defending Europe from its domestically created enemies twice in the last century? or maybe bringing freedom and liberty to more Asians,Arabs, eastern Europeans then any other country or culture including other Asian nations in history. Maybe being naive enough to believe that the primitive cultures in Afghanistan, Pakistan and other Islamic nations were capable of giving up superstition and embrace free secular government? Maybe feeding the majority of the third world with our wheat?

Enemies of American see us weakened so the knives come out; pray that we can keep it together because if America dies the free world dies with it.


RE: What?
By MechanicalTechie on 10/19/12, Rating: 0
RE: What?
By Ammohunt on 10/19/2012 2:39:06 PM , Rating: 2
Wow what a reasoned and well thought out rebuttal! Your Tiny intellect inside your tiny world view shows!. You are not here for debate but to display for all your superior intellect! You are a living cliché but hope is not lost there is treatment for NPD you can do it!


RE: What?
By Brainling on 10/19/2012 5:20:23 PM , Rating: 3
Holy nationalism batman. As an American, this is EMBERASSING.

We are not infallible, we are not perfect, and we ARE weakened. We've spent 30 years crapping on the rest of the world, starting wars where we weren't wanted, and generally being the World Police. Do as we say or we'll kick in your door!

World War II is long over Cowboy Curtis, we can't ride the coat tales of the greatest generation anymore.

America has NOT been a positive influence on the world for many years, outside of exporting greed and consumerism. I am still proud to be an American, but part of having pride is realizing when you're country screws up, you own up to it, and don't act like your the greatest thing since sliced bread.

Also, greatest country ever, buahaha. Ever heard of Rome? Greece? They lasted just a feewwwww years longer than we did, and we wouldn't have democracy or federal republicanism without them. Learn your history.

There is a difference between patriotism and nationalism, and you are firmly on the side of the latter.


RE: What?
By MechanicalTechie on 10/19/2012 11:28:15 PM , Rating: 1
Nice to know someone realizes that I'm not trying to bash the US but only show a side of the story that a lot of Americans have no clue about.

America has done some amazing things in history but lately... its being downhill.. those who have an interest in politics know full well what is going on.


RE: What?
By corduroygt on 10/19/2012 9:38:31 AM , Rating: 2
Without the USA to produce demand for their goods, China would be fishing out of the toilet for its next meal too. It goes both ways.


RE: What?
By MechanicalTechie on 10/19/2012 9:56:50 AM , Rating: 2
Correct!

Except the China is the primary importer/exporter to much more other countries. Hence why I said before...

quote:
Time to face facts the US and Chinas paths will be forever linked and using China as a scapegoat for all your domestic problems is unbelievably short slighted.


RE: What?
By Ammohunt on 10/19/2012 10:59:12 AM , Rating: 2
You are aware that most of Americas debt is domestic foreign debt is the much smaller percentage.


RE: What?
By Brainling on 10/19/2012 5:24:36 PM , Rating: 2
This is the only true/non-embarrassing thing you've said in the entire discussion. America's debt is mostly held in the Social Security Reserve and Medicare Fund.

We've essentially been dipping in to our own funded programs to "borrow" money, and we wonder why those programs are bankrupt.


RE: What?
By LordSojar on 10/19/2012 8:57:03 AM , Rating: 2
@TSS....

What? 1 quadrillion? No, wrong, on so many levels. Japan's public debt is ~14 trillion. Where the hell did you get that number?


RE: What?
By Brainling on 10/19/2012 5:26:55 PM , Rating: 2
Yeah, that struck me as odd as well. The US debt isn't even a [i]quadrillion[/i]. Which is 1000 TRILLION.

I mean, our debt is high, but not THAT high. I would be surprised if all the national debt in the entire world was a quadrillion....but I guess it could be.


RE: What?
By hankw on 10/18/2012 8:41:34 PM , Rating: 1
What a stupid analogy. How do you know if they are thieves if they haven't stolen anything yet? People really need to start thinking before saying shit.


RE: What?
By bug77 on 10/19/2012 4:15:12 AM , Rating: 2
I can take a look at F22. And then take a look at J5.


RE: What?
By hankw on 10/19/2012 8:18:37 AM , Rating: 2
That's not what you said. You said you "saw a bunch of thieves parked outside your house" but have not seen anything stolen. How can they be thieves if nothing was stolen. How do you know they aren't just there for other reasons? Plumbers? It's not a crime to park outside of your house.
And let's not get into the debate about things "looking" alike. This is the problem with most people's thinking; they let their emotions do the talking instead of using logic.


RE: What?
By bug77 on 10/19/2012 8:40:50 AM , Rating: 2
I don't get it.
You're saying it's ok when chinese planes start looking like US planes and the US should just chill?
If designs were making their way out of my vaults, I'd be damn sure to scramble to plug any possible security hole.


RE: What?
By hankw on 10/19/2012 8:48:19 AM , Rating: 2
Um no. I'm saying your analogy is bad. You're identifying people as thieves without any evidence besides them parking in front of your house. I'm not sure why this is hard to understand.

But again on things "looking alike". Plenty of products China made or not look alike. Didn't we just go through the whole Apple vs Samsung thing recently? Not to say nothing was stolen, but you're using gut feel here rather than facts. You have no idea how both planes work internally either.


RE: What?
By tamalero on 10/19/2012 9:10:16 AM , Rating: 2
They found inspiration in Steve Jobs ;)

I wonder if the chinese feel "artistic" now.


RE: What?
By Brainling on 10/19/2012 5:29:11 PM , Rating: 2
You mean the J5 that can't even fly yet and has a radar cross section 15 times as big as the F-22, has no super cruise, or vectored thrust, and internal ammo bays who's doors stick? THAT J5?

If they are stealing the F-22, they are doing a terrible job of it. It's not doubt they looked at the F-22 for inspiration, just like the Mig-29 and it's descendants look an awful lot like an F-15, but have never lived up to it's capabilities.


RE: What?
By Brainling on 10/19/2012 5:35:04 PM , Rating: 2
I hate to double reply, but I wanted to point out how silly this is in relative terms: By the time the J5 is at the operational level of the F-22, hell even the F-35, we will be flying a majority unmanned Air Force.

The EuroFighter is MUCH closer to the F-22's capability level (some would say even higher in heavy maneuvering), so I guess the EuroFightern nations "stole" the F-22 as well.


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