Fri, Jan 18, 2019 - Page 1 News List

US lawmakers introduce bills targeting Huawei, ZTE

‘DEATH PENALTY’:The legislation would require the president to ban the export of US components to any Chinese telecom gear makers that breach US sanctions

Reuters, WASHINGTON and BEIJING

Huawei Technologies employees walk past a statue at the company’s campus in Dongguan, China, on Tuesday.

Photo: Bloomberg

A bipartisan group of US lawmakers on Wednesday introduced bills that would ban the sale of US chips or other components to Huawei Technologies Co (華為), ZTE Corp (中興通訊) and other Chinese telecommunications companies that breach US sanctions or export control laws.

The proposed legislation was introduced shortly before the Wall Street Journal reported that US federal prosecutors were investigating allegations that Huawei stole trade secrets from T-Mobile US and other US businesses.

An indictment could be coming soon on allegations that Huawei stole a T-Mobile technology, called Tappy, which mimicks human fingers and was used to test smartphones, the newspaper said.

Huawei said in a statement that it and T-Mobile settled their disputes in 2017 following a US jury verdict that found “neither damage, unjust enrichment, nor willful and malicious conduct by Huawei in T-Mobile’s trade secret claim.”

The legislation is the latest in a long list of actions taken to fight what some in the administration of US President Donald Trump have called China’s cheating through intellectual property theft, illegal corporate subsidies and rules hampering US corporations that want to sell their goods in China.

The Chinese Ministry of Foreign Affairs yesterday said that the proposed legislation was due to “hysteria,” and urged US lawmakers to stop the bills.

In November last year, the US Department of Justice unveiled an initiative to investigate China’s trade practices with a goal of bringing trade secret theft cases.

At that time, Washington had announced an indictment against Chinese chipmaker Fujian Jinhua Integrated Circuit Co (晉華集成電路) for stealing trade secrets from US semiconductor company Micron Technology.

Jinhua, which has denied any wrongdoing, was put on a list of entities that cannot buy goods from US firms.

On Capitol Hill on Wednesday, US Senator Tom Cotton and US Representative Mike Gallagher, both Republicans, along with Senator Chris Van Hollen and Representative Ruben Gallego, both Democrats, introduced the bills that would require the president to ban the export of US components to any Chinese telecommunications company that breaches US sanctions or export control laws.

The bills specifically cite ZTE and Huawei, both of which are viewed with suspicion in the US because of fears that their switches and other gear could be used to spy on Americans. Both have also been accused of failing to respect US sanctions on Iran.

“Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the [Chinese] People’s Liberation Army,” Cotton said. “If Chinese telecom companies like Huawei violate our sanctions or export control laws, they should receive nothing less than the death penalty — which this denial order would provide.”

The proposed legislation and the investigation are two of several challenges that Huawei, the world’s biggest telecommunications equipment maker, faces in the US market.

In addition to allegations of sanctions breaches and intellectual property theft, Washington has been pressing allies to refrain from buying Huawei’s switches and other gear because of fears that they would be used by Beijing for espionage.

Huawei founder Ren Zhengfei (任正非) this week denied that his company was used by the Chinese government to spy.

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