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Huawei is US, China battleground

Last year, as AT&T was preparing for a million dollar deal, one of its senior executives received a call from the National Security Agency.

world Updated: Oct 09, 2010 00:50 IST

Last year, as AT&T was preparing for a million dollar deal, one of its senior executives received a call from the National Security Agency.

The subject was AT&T's desire to give a Chinese firm a contract to supply some of the equipment. The message from the NSA — the US's electronic spying agency — was simple: If AT&T wanted to continue its lucrative business with the US government, it had better select a supplier other than Huawei, said several people with knowledge of the call. In February, AT&T announced that it would buy the equipment it needed from other companies.

The NSA called AT&T because of fears that China's intelligence agencies could insert digital trapdoors into Huawei's technology that would serve as secret listening posts in the US communications network, said the sources.

The trust gap between US and China is a major obstacle for China and its companies as they seek to enter more sensitive parts of the global economy. But if the aborted AT&T deal was a setback for Huawei, the history of the company and its founder demonstrates a determination to prevail.

Huawei sells equipment, and services to 35 of the world's 40 biggest telecom companies. It supplies one-third of the telecom equipment used in China.

Still, US senators are lobbying against another potential big Huawei sale. Huawei is being accused of links to the People's Liberation Army and Iran's Revolutionary Guards Corps.

Although Huawei is technically a private firm, it has long benefited from an intimate relationship with the Chinese state.

Hence Huawei has been dogged by accusations that it would ultimately serve the interests of the Chinese Communist Party, not its customers or the market. Huawei reject such charges

Founder and CEO Ren Zhengfei writes, "China-US relations will continually have twists and turns, but that shouldn't stop us from learning from the American spirit of innovation so that we can become richer and more powerful ever faster."

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