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Slideshow ZTE to testify in U.S. probe of alleged China telecom threat Tweet Share this Email Print Related News Apple share of China smartphone mkt almost halved in Q2 - IDC Fri, Aug 24 2012 CORRECTED-UPDATE 1-Apple share of China smartphone mkt almost halved in Q2 - IDC Fri, Aug 24 2012 UPDATE 2-China's ZTE logs biggest quarterly profit fall since 2006 Wed, Aug 22 2012 UPDATE 4-China Mobile H1 core profit slips, shares down 5 pct Thu, Aug 16 2012 Sands China deals probed by U.S. for possible bribery violations: WSJ Fri, Aug 10 2012 Analysis & Opinion Knight Capital’s filings reveal scant oversight focus on tech risks for board Related Topics Tech » Employees of ZTE chat on the roof of its headquarters in Shenzhen, Guangdong province, April 17, 2012. Credit: Reuters/Tyrone Siu By Jim Wolf and Lee Chyen Yee WASHINGTON/HONG KONG | Wed Aug 29, 2012 9:20pm EDT WASHINGTON/HONG KONG (Reuters) - China's ZTE Corp said it would take part in a projected U.S. congressional hearing next month linked to an investigation of alleged Chinese espionage threats to U.S. telecommunications infrastructure. The House of Representatives Permanent Select Committee on Intelligence has invited the chairman of ZTE, Hou Weigui, and deputy chairman of Huawei Technologies Co, Ken Hu, to testify at a hearing that would explore their companies' relationships with the Chinese authorities, among other things. "ZTE intends to participate in the upcoming congressional hearing," Mitchell Peterson, a vice president of ZTE's U.S. arm, said in a statement to Reuters on Wednesday. Shenzhen-headquartered ZTE is in the world's fifth-biggest telecommunications equipment maker. Huawei, also based in Shenzhen, is the second-biggest, after Sweden's Ericsson. Huawei had no immediate comment on whether any of its executives would testify. The House panel, in companion letters dated June 12, asked the companies to provide details of their interaction over the past five years with the Chinese authorities, including the Communist Party, ministry of defense and ministry of state security. Committee Chairman Mike Rogers, a Republican, and C.A. Dutch Ruppersberger, the panel's top Democrat, said in the letters that the panel was investigating "the threat posed to our critical infrastructure and counter-intelligence posture by companies with potential ties to the Chinese government." The hearing could come as early as the second week of September if the committee decides to go ahead with it. Negotiations appear to be continuing over the level of executives who would testify. Neither ZTE's Hou nor Cheng Lixin, chief executive of its U.S. unit, is likely to attend, said a company source who declined to be identified because he was not authorized to speak on the record. Instead the company more likely would send a fairly senior executive responsible for overseas markets, this person said. COMMITTEE MUM Susan Phalen, the committee's spokeswoman, declined to comment on plans for such a hearing until the committee was ready to make any announcement. ZTE describes itself as supplying telecommunications equipment to 500 network operators in 140 countries. It said it had submitted a series of detailed factual responses as part of its voluntary cooperation with the committee. "ZTE is the most independent, transparent, globally focused publicly traded company in China's telecom sector," the statement said. "In most respects, ZTE is similar to multi-national tech companies that have emerged in Silicon Valley." The company in its planned testimony will demonstrate its "unique ability" to help provide solutions to cyber security issues facing the U.S. Congress and the executive branch, Peterson said in the statement. Huawei said in a statement to Reuters earlier this month that it has appreciated the opportunity to engage in "good faith, fact-based and responsive interaction" with the intelligence committee over the previous eight months. The panel began its investigation last November and stepped it up in June. Its report is now expected by early October. "We are committed to continuing to be responsibly open and transparent and look forward to further dialogue," William Plummer, a Huawei spokesman in Washington, said in an August 2 reply. Former U.S. Commerce Secretary John Bryson dealt Huawei a blow in March 20 testimony to the House Appropriations Commerce-Justice-Science subcommittee. "It appears that Huawei has capabilities that we may not fully detect to divert information," Bryson said. "It's a challenge to our country." It was unclear whether alleged ZTE violations of sanctions against Iran would come up in the projected House intelligence committee hearing. The FBI has opened a criminal investigation into ZTE over its sale of banned U.S. computer equipment to Iran and its alleged subsequent attempts to conceal this and obstruct a Department of Commerce probe, according to documents posted on the Smoking Gun website last month. The federal investigations stem from a Reuters report in March that ZTE had sold Iran's largest telecom firm a powerful surveillance system capable of monitoring landline, mobile and Internet communications, according to interviews and contract documents. ZTE's largest shareholder is a Chinese state-owned enterprise, Zhongzingzin, with about 30 percent of the shares, according to the House Intelligence Committee letter to ZTE. (Reporting by Jim Wolf in Washington and Lee Chyen Yee in Hong Kong; Editing by Phil Berlowitz) Tech Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above. 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