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Huawei rows exposes East-West clash

BEIJING--U.S. security fears over two China telecom firms have spotlighted Western suspicions that Chinese companies are state-influenced, a culture clash that analysts say could loom larger as the country's businesses look overseas.

Telecommunications equipment firms Huawei Technologies and ZTE were put on the defensive this month by a U.S. Congressional committee that labeled them potential national security threats that should be excluded from government contracts and barred from acquisitions in the United States.

Huawei — a private company founded by a People's Liberation Army veteran — and ZTE — publicly traded and less than 16 percent state-invested, according to the corporation — have denied they pose any such security risk.

But countless Chinese companies remain either majority state-owned or maintain intricate government links, a fact noted even by ZTE itself.

ZTE spokesman David Dai Shu said in a statement that the committee's finding that the company may not be free of state influence, “would apply to any company operating in China.”

Analysts said the issue could become a recurring stumbling block as more Chinese firms look for expansion opportunities abroad — especially in sensitive sectors — just as China is increasingly viewed as a strategic U.S. rival.

“We've never had a country with a one-party state and a very large state sector that has played such an important role in the global economy, that has been in a position to make investments around the world,” said Patrick Chovanec, professor at Tsinghua University's School of Economics and Management in Beijing.

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In this file photo dated Oct. 8, a receptionist sits behind the counter at the telecommunications equipment firm Huawei Technologies in Wuhan, central China's Hubei province. U.S. security fears over two Chinese telecom firms have spotlighted Western suspicions that Chinese companies are state-influenced.

(AFP)

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