Chinese telecoms companies like ZTE and Huawei face severely tightened access to the US market despite the Trump administration’s deal this week to give ZTE a lifeline after it agreed to a steep fine.
Amid persistent worries that their phones, routers and other products will open a path for Beijing’s spying on the United States, analysts say the US government will remain broadly closed to products of the two companies and that the US telecoms industry will remain under pressure to avoid their equipment.
Indeed, four Democratic and Republican senators, criticizing the deal that will permit ZTE to resume purchasing US electronics components, proposed legislation Thursday for an outright ban on the government buying products and services from both ZTE and Huawei.
“Huawei and ZTE pose a serious threat to America’s national security. These companies have direct links to the Chinese government and Communist Party,” said Republican senator Marco Rubio.
“Their products and services are used for espionage and intellectual property theft, and they have been putting the American people and economy at risk without consequence for far too long.”
But experts say the move could hinder the growth of next-generation 5G wireless networks in the United States. The two Chinese companies are poised to become global leaders in the 5G rollout, just beginning this year in several countries.
“The overall concern is that these companies are close to the Chinese government,” said Paul Triolo, a China security specialist at the Eurasia Group.
With fifth-generation mobile technology, he said, “the concern becomes magnified” because the technology is heavily cloud-based, potentially leaving sensitive data accessible by the service provider.
