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10/8/12

Cyber Espionage: China tech giants pose security threat says US Congressional Panel - by Matthew Pennington

American companies should avoid sourcing network equipment from China's two leading technology firms because they pose a national security threat to the United States, the House Intelligence Committee warned Monday.

The panel said in a report that U.S. regulators should block mergers and acquisitions in this country by Huawei Technologies Ltd. and ZTE Corp, among the world's leading suppliers of telecommunications gear and mobile phones.

Reflecting U.S. concern over cyber-attacks traced to China, the report also recommends that U.S. government computer systems not include any components from the two firms because that could pose an espionage risk.

"China is known to be the major perpetrator of cyber-espionage, and Huawei and ZTE failed to alleviate serious concerns throughout this important investigation. American businesses should use other vendors," the committee's chairman, Rep. Mike Rogers, R-Mich, told a news conference. He said the Chinese companies could not be trusted with access to computer networks that support everything from power grids to finance systems.

Note EU-Digest:  obviously this raises the question as to what the European Union has undertaken so far to combat these practices in Europe? 

In a rare public speech, the head of Britain's domestic spy service said recently  that the West now faces an "astonishing" cyber espionage threat on an "industrial scale" from specific nation states. 

"The extent of what is going on is astonishing," said Jonathan Evans, director general of MI5, "with industrial-scale processes involving many thousands of people lying behind both state-sponsored cyber espionage and organized cyber crime." 

Though Evans did not name any countries, ABC News has separately learned from sources that the U.K., the U.S. and several European allies have a robust discussion underway on how to counter cyber espionage by perhaps the most significant state operator -- China.

Read more: US panel: China tech giants pose security threat - US News and World Report

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