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Spurned by the US, Huawei Reexamined in New Zealand

After a lengthy examination by the House Intelligence Committee concluded this week with a negative stamp on Huawei and ZTE, opposition parties in New Zealand are now attacking the current government of New Zealand, who in March approved a large deal between Huawei and the New Zealand’s Ultrafast Fibre Ltd.

The US House Intelligence Committee report makes it clear that Huawei has failed on all accounts to alleviate their concerns that it may be involved in espionage on the Chinese government’s behalf. Despite repeated requests for disclosure of financial information and the activities of the company’s “Party Committee,” Huawei has simply denied accusations without providing sufficient evidence.

Perhaps more damning  is that former Huawei employees have provided testimony that Huawei may have engaged in illegal activity within the United States. “These allegations describe a company that has not followed United States legal obligations or international standards of business behavior,” the report states, adding that it will refer these accusations to the “Executive Branch” for further review and investigation.

This comes as a huge blow for Huawei, who has made strides this year in the UK in cooperation with network operator EE. The company has also made an important entry into New Zealand’s ultra-fast broadband project this year.

This is now being scrutinized, and opposition leaders in the Labour and Green parties are requesting a fuller investigation of Huawei. Labour Party MP has called for an independent inquiry into how Huawei became involved in the broadband scheme, while Green Party technology spokesman Gareth Hughes says the government needs to review the US report.

Huawei has already helped to build New Zealand’s 2degrees’ mobile network as well as its Vodafone fixed broadband network, raising the question of whether it is worth investigating so late. Therefore, the investigation may be more political than realistic.

Though the accusations of the US Intelligence Committee may be seen as political, Huawei has not been forthcoming on information about its past or its financial and political connections, an issue that will continue to be a thorn in its side until the company decides to become more transparent, if it can. Hiding information, though useful for business purposes, will only provide more fodder for the Chinese government strong-hand hypothesis, suggesting that the company is being coerced into remaining silent or that it hopes to avoid self-incrimination.

Huawei, for its part, has revealed that it will consider a listing on the US stock exchange in the future, perhaps in response to another recommendation in the House report which advises Chinese companies to promote transparency through a listing.

 

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