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Huawei Not Leaving U.S., Just Pulling Back

By - Source: AllThingsD | B 16 comments

Huawei has no intentions of leaving the United States market.

Last week 69-year-old founder and CEO of China-based Huawei, Ren Zhengfei, told French journalists in a rare interview that due to the strains between China and the United States, and because of the accusations made by U.S. lawmakers that Huawei is somehow tied to China, the company is supposedly exiting the North American market.

"If Huawei gets in the middle of U.S-China relations [and causes problems], it's not worth it," Zhengfei reportedly said. "Therefore, we have decided to exit the U.S. market, and not stay in the middle."

The news isn't surprising. The North American market could be seen as hostile given how federal regulators have tried to block the spread of Huawei's equipment in the United States, and how lawmakers have convinced many U.S. firms to stop doing business with the China-based company. Huawei's desire to possibly throw in the towel due to the strains on the local market isn't really anything new.

The big fear with local lawmakers and regulators is that Huawei's networking products will have secret backdoors built in so that Chinese officials can spy on Americans. Just over a year ago, Rep. Mike Rogers, the chairman of the House Intelligence Committee, suggested that U.S.-based businesses find a vendor other than Huawei and ZTE, that the installation of their equipment could be disastrous.

"We have to be certain that Chinese telecommunication companies working in the United States can be trusted with access to our critical infrastructure," Rogers said in a public announcement. "Any bug, beacon, or backdoor put into our critical systems could allow for a catastrophic and devastating domino effect of failures throughout our networks."

So does that mean Huawei giving up on America? No. "Given the U.S. carrier equipment market environment, Huawei is prioritizing its carrier business on markets that are open to competition, innovation and investment," Huawei spokesman William Plummer told AllThingsD in an email interview.

"We remain committed to our customers, employees, investments and operations and more than $1 billion in sales in the U.S., and we stand ready to deliver additional competition and innovative solutions as desired by customers and allowed by authorities," Plummer added.

For the record, Zhengfei didn't say that Huawei was shutting down its offices in the United States or ending a specific line of business. According to Foreign Policy, the company CEO even admitted that its mobile phone business was doing well here in the States.

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  • 9 Hide
    MKBL , December 5, 2013 8:43 AM
    "The big fear with local lawmakers and regulators is that Huawei's networking products will have secret backdoors built in so that Chinese officials can spy on Americans."

    This implies that US equipment company may have created backdoor on their products in other countries. The lawmakers and regulators may reason like, if we can and do it, why not they? I'm not saying US is in err, but simply analyze the possible reality. International politics is becoming even more brutal than domestic infighting. Even scarier, since this time, most likely the consequences will be unprecedented one.
  • 8 Hide
    ahnilated , December 5, 2013 8:45 AM
    Well, why should we worry about trusting them when we can't even trust our own government ?
  • 0 Hide
    sonofliberty08 , December 5, 2013 9:27 AM
    in other words, Cisco's networking products will have secret backdoors built in so that NSA can spy on the World.
  • 1 Hide
    vmem , December 5, 2013 9:30 AM
    Quote:
    "The big fear with local lawmakers and regulators is that Huawei's networking products will have secret backdoors built in so that Chinese officials can spy on Americans."

    This implies that US equipment company may have created backdoor on their products in other countries. The lawmakers and regulators may reason like, if we can and do it, why not they? I'm not saying US is in err, but simply analyze the possible reality. International politics is becoming even more brutal than domestic infighting. Even scarier, since this time, most likely the consequences will be unprecedented one.


    oh it's entirely possible (and likely). how do you think these people get elected? by being law-abiding, honest citizens? That hasn't really happened since the founding fathers passed
  • 0 Hide
    cream , December 5, 2013 9:46 AM
    yet again the yanks barking but aint they doing the same thing one wonders who are the cowboys
  • 0 Hide
    spartanmk2 , December 5, 2013 9:46 AM
    We're not retreating, we're advancing in the opposite direction!
  • 0 Hide
    ahnilated , December 5, 2013 9:48 AM
    Quote:
    yet again the yanks barking but aint they doing the same thing one wonders who are the cowboys


    Silly, it is the men in the Cowboy Hats, sheez...
  • 0 Hide
    sykozis , December 5, 2013 9:52 AM
    Quote:
    Well, why should we worry about trusting them when we can't even trust our own government ?


    Exactly....
  • 0 Hide
    heero yuy , December 5, 2013 10:23 AM
    so let me get this straight...
    Huawei come in with what appear to be quite good products
    big companies in America don't like that so they bang on about Huawei and the Chinese government and backdoors (although I could just say NSA and backdoors to be honest) the result being Huawei backing out
    over here in England we have this thing called the competition commission that attempts to stop this stuff...
  • 1 Hide
    rwinches , December 5, 2013 11:12 AM
    ^^ They are still selling products here just not infrastructure equipment, which would lower line costs, and we can't have that.

    All this spying makes the salutation 'Dear Sirs,' take on a whole new meaning.
  • 1 Hide
    quilciri , December 5, 2013 11:44 AM
    Whenever I read their name, I picture Wayne and Garth.

    Garth: No way!
    Wayne: Huawei!
  • 2 Hide
    ZolaIII , December 5, 2013 11:52 AM
    Well i actually think that Chinese government did criticized Huawei to pull back from US.because if they destroy uncompetitive American firms how will Americans pay back debt to Chinese? The back door garden story is just cover up. Truth is Chinese don't need weapons to defeat Americans it's in off for them to kindly ask for they money back bat this would actually break world economy so it's not going to happen.
  • 0 Hide
    gm0n3y , December 5, 2013 12:24 PM
    Anyone that has studied that Communist Party of China (CPC) knows that they generally, as a rule, have CPC members appointed to key positions in all of the major companies in China. This is how they maintain control while still reaping the benefits of their brand of capitalism. The CPC has the legal ability to fire/appoint personnel in any company in China and there is a documented history of them frequently doing this, especially in the telecom industry.

    This level of control is why other countries are wary of allowing China to compete in the their domestic markets. It's one thing if a foreign private company has a presence in your country. It is quite another when the company is controlled by a foreign country that is basically run by a dictatorship. China also has a history of heavily subsidizing their companies so they can overwhelm the competition. They do this a lot in China and it is hard to believe that they won't do the same in other countries. And good luck trying to fight China at the WTO. Just look at how hard it has been for anyone to beat the US in a trade dispute.

    For a good overview of the CPC and their policies I recommend Richard McGregor's "The Party: The Secret World of China's Communist Rulers".
  • 0 Hide
    f-14 , December 5, 2013 3:19 PM
    the american government is jealous.
    if Huawei establishes a presence here in america the american government will either have to share the back doors with Chinese government

    or the american government will have no back door but china will be the only one with a way in.
  • 0 Hide
    DalaiLame , December 5, 2013 3:29 PM
    The hazard is not from Huawei but from internal organizations like NSA, et al. Huawei would not want to wreck their main source of revenue because even when there is no mischief on their part, certain quarters are keen to invent some so as to damage their business.
  • 0 Hide
    sanctoon , December 5, 2013 10:22 PM
    I read Hawaii, giving the headline a whole new meaning!