China’s ZTE Corp (中興) said it would take part in a projected US congressional hearing next month linked to an investigation of alleged Chinese espionage threats to US telecommunications infrastructure.
The House of Representatives Permanent Select Committee on Intelligence has invited ZTE chairman Hou Weigui (侯為貴) and Huawei Technologies Co (華為) deputy chairman of Ken Hu (胡厚崑) to testify at a hearing that would explore their companies’ relationships with the Chinese authorities, among other things.
“ZTE intends to participate in the upcoming congressional hearing,” Mitchell Peterson, a vice president of ZTE’s US arm, said in a statement on Wednesday.
Shenzhen-headquartered ZTE is the world’s fifth-biggest telecommunications equipment maker. Huawei, also based in Shenzhen, is the second-biggest, after Sweden’s Ericsson. Huawei had no immediate comment on whether any of its executives would testify.
The House panel, in companion letters dated on June 12, asked the companies to provide details of their interaction over the past five years with the Chinese authorities, including the Chinese Communist Party, ministry of defense and ministry of state security.
Committee chairman Mike Rogers, a Republican, and C.A. Dutch Ruppersberger, the panel’s top Democrat, said in the letters that the panel was investigating “the threat posed to our critical infrastructure and counter-intelligence posture by companies with potential ties to the Chinese government.”
The hearing could come as early as the second week of next month if the committee decides to go ahead with it. Negotiations appear to be continuing over the level of executives who would testify.
Neither ZTE’s Hou nor Cheng Lixin (程立新), chief executive of its US unit, is likely to attend, said a company source.
Instead the company more likely would send a fairly senior executive responsible for overseas markets, this person said.
The panel began its investigation last November and stepped it up in June. Its report is now expected by early October.
It was unclear whether alleged ZTE violations of sanctions against Iran would come up in the projected House intelligence committee hearing.
The FBI has opened a criminal investigation into ZTE over its sale of banned US computer equipment to Iran and its alleged subsequent attempts to conceal this and obstruct a US Department of Commerce probe, according to documents posted on the Smoking Gun Web site last month.
The federal investigations stem from a Reuters report in March that ZTE had sold Iran’s largest telecom firm a powerful surveillance system capable of monitoring landline, mobile and Internet communications, according to interviews and contract documents.
ZTE’s largest shareholder is a Chinese state-owned enterprise, Zhongzingzin, with about 30 percent of the shares, according to the House Intelligence Committee letter to ZTE.