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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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RE: What?
By michael67 on 10/19/2012 5:32:03 AM , Rating: 2
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.
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.


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.

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. :~(

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.

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