China slams proposed U.S. bill targeted at Huawei and ZTE

A Chinese government spokesperson today decried the filing of a bill in the U.S. Congress that would ban the supply of U.S. technology to Chinese companies that violated U.S. export laws. The bill mentions Huawei and ZTE by name.

The bipartisan proposed Telecommunications Denial Order Enforcement Act was filed in the U.S. House and Senate January 16. Senator Chris Van Hollen (D-MD) and Senator Tom Cotton (R-AR), alongside their congressional counterparts Representative Ruben Gallego (D-AZ) and Representative Mike Gallagher (R-WI), say the legislation is necessary in the wake of the arrest of Huawei CFO Meng Wanzhou in Canada last month on potential charges of lying to banks about the relationship between Huawei and an Iranian company that attempted to sell U.S. equipment to Iran in defiance of a ban on such sales (see “U.S. seeks to charge Huawei CFO with bank fraud”). The allegations come after ZTE admitted to selling communications equipment to Iran and North Korea with banned U.S. components, then was cited for lying about its non-compliance with the terms of its punishment (see “ZTE faces export sanctions from US Department of Commerce” and “U.S. Commerce Dept. finds ZTE violated export disciplinary agreement, bans U.S. component supply”).

The bill would establish a denial of access to U.S. technology as the consequence if a Chinese company violates U.S. export laws or sanction agreements. Such a denial would remain in place until the President affirmed that the offending companies had demonstrated what a press release termed “a pattern of compliance and cooperation over the course of a year.”

The proposed legislation comes against a backdrop of general mistrust within Congress regarding the business practices and motives of Huawei and ZTE.

“Huawei and ZTE are two sides of the same coin. Both companies have repeatedly violated U.S. laws, represent a significant risk to American national security interests, and need to be held accountable. Moving forward, we must combat China’s theft of advanced U.S. technology and their brazen violation of U.S. law,” said Senator Van Hollen, who had attempted unsuccessfully last year to prevent the Commerce Department from changing its mind about denying ZTE access to U.S. technology (see “Mixed signals on Commerce deal with ZTE”).

“Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People's Liberation Army. It’s imperative we take decisive action to protect U.S. interests and enforce our laws. If Chinese telecom companies like Huawei violate our sanctions or export control laws, they should receive nothing less than the death penalty—which this denial order would provide,” added Senator Cotton.

Speaking at a regularly schedule press briefing today, Foreign Ministry Spokesperson Hua Chunying criticized the legislative filings. “I believe such a move of these senators just testifies to their extreme hubris as well as lack of confidence,” said Hua, according to a translation of the press briefing posted via China’s U.S. embassy in Washington, DC. “People around the world all know very well the true intention of the U.S. [is] using every possible state apparatus to suppress and block Chinese high-tech companies. Even some wise persons in the U.S. have pointed out sharply the essence and possible consequence of the relevant move by the U.S.

“What the U.S. side is doing is not the normal thing a normal country will do, still less a proper behavior for the number one power in the world,” Hua continued. “The U.S. has made enough framed-up and wrong cases around the globe, and certain people in the U.S. need to correct their mindset and stop before going too far.”

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