The Daily Twit – 10/8/12: American Dream Turns Into Nightmare for Huawei, ZTE

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We’re just getting back from the week-long holiday over here, so not much in the way of important domestic news. Luckily for China watchers, the U.S. Congress has come to the rescue by issuing the eagerly anticipated report on Chinese telecom giants Huawei and ZTE. The report itself, which deals with the national security implications of inward investment/services by these companies, will be issued Monday p.m. U.S. time by the House Intelligence Committee, so the media reports that came out over the past twelve hours or so are based on preliminary information and statements made by members of the committee.

In addition to the links below, I’ll definitely be covering this topic in a post tomorrow (or more than one) once I’ve had a chance to read up on the news and take a look at the actual report. At this point, we already know that the basic conclusion is: “Huawei and ZTE are not to be trusted. Don’t do business with them.” This obviously closes the door on both of these companies with respect to both direct investment in the U.S. as well as many services deals. I originally thought this investigation was a great opportunity for these companies to tell their side of the story, but it’s obviously gone horribly wrong. I think the Financial Times got it just right with this headline: Huawei’s emergence from shadows backfires.

Pretty harsh. Is it fair? Tune in tomorrow.

In the meantime, the following stories are all reporting on the same news, so no further commentary here, just naked links:

Reuters: China’s Huawei, ZTE should be kept from U.S.: draft Congress report

Telegraph: Chinese tech firms Huawei and ZTE ‘pose national security threat’

Forbes: U.S. Congress Flags China’s Huawei, ZTE As Security Threats

60 Minutes: Huawei probed for security, espionage risk (video)

LA Times: House intelligence panel warns against two Chinese firms

Guardian: China’s Huawei and ZTE pose national security threat, says US committee

Bloomberg: Huawei, ZTE Provide Opening for China Spying, Report Says

Financial Times: US committee slams Huawei and ZTE

Huffington Post: Huawei, Controversial Chinese Tech Firm That Once Partnered With Bain Capital, Slammed By GOP — just added this one on the end to make fun of HuffPost coverage. This is a huge U.S.-China story that will have significant trade and other effects, and all they can see are narrow (and irrelevant) domestic political implications. Sad.

If you’re looking for some stimulating U.S.-China relations reading and are sick of the recent media focus on the election and China bashing, head over to the New York Times Op/Ed page and take a look at what Ian Bremmer and David Gordon have written on the topic: Where Commerce and Politics Collide. The gist of the Op/Ed is that a Cold War is unlikely for a variety of reasons, including economics/trade and security. At the same time, if tensions between the two countries rises, there will be a greater risk of low-level confrontation, such as regional proxy fights and cyberwarfare.

Speaking of cyberwarfare, don’t miss this Diplomat article by Adam Segal on the issue of cyberwar treated as an act of war under international law: China, International Law, and Cyberspace.