DailyTech writes a report by the U.S. House of Representatives' Intelligence Committee calls for a ban on smartphones and routers from Chinese OEMs like ZTE and Huawei. The committee fears that these devices may have backdoors, enabling China to spy on US communications.
In the wake of an attack on the White House by Chinese hackers, potentially working for the Chinese government, cybersecurity tensions are high between the U.S. and China. Unsurprisingly, the new report focuses on the Chinese cybersecurity threat to American customers and businesses.
The report singles out two top Chinese equipment manufacturers -- ZTE Corp. (SHE:000063) and Huawei Technologies Comp. (SHE:002502) -- suggesting that U.S. lawmakers take the unusual step of banning the Chinese companies' products from the market.
Globally, ZTE is the fourth largest maker of mobile phones, while Huawei is sixth. In the routers, switches, and telecommunications market, Huawei is the world's second largest company in revenue, while ZTE ranks fifth. Both companies are looking to expand their sales base in the U.S.
Huawei and ZTE representatives claim the report is "baseless" and a "political distraction".