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Joint ventures by US tech firms with China pose cyberwar risk: report

Ellen Messmer | March 9, 2012
Should conflict occur, China's cyberwar plans target the U.S., and today's Chinese joint ventures with U.S. manufacturers in hardware, software and telecommunications create a "potential vector" for the People's Liberation Army (PLA) to exploit and compromise, says a report from the U.S.-China Economic and Security Review Commission sent to Capitol Hill today.

The report singles out the joint venture between Huawei Shenzhen Technology Company Ltd. and Symantec, under which for almost four years Symantec shared its security and storage technologies with Huawei to include in its telecom equipment. Symantec CEO Enrique Salem announced the joint venture had ended in November 2011, saying the two companies had decided it would be best to consolidate the venture under one owner. Huawei, which bought out Symantec for $530 million, still licenses Symantec's technologies.

"Partnering with an American or other Western anti-virus vendor does not necessarily allow the Chinese partner to obtain signature data earlier than legitimate participation in industry consortia such as the Microsoft Virus Information Alliance, but it may provide the Chinese partner with deeper access to U.S. markets over the long term," the report said.

Huawei is the large China-based telecom equipment and service provider which has been seeking to expand business in the U.S. the past few years even as the atmosphere has grown more tense as several U.S. companies, including Google, have spoken of cyber-espionage carried out by what appeared to be attacks out of China.

Without official explanation, Huawei has found itself blocked by the U.S. Department of Commerce from participating in a U.S. project to build a wireless network for emergency personnel, police and firefighters. In addition, Huawei has found itself struggling with its involvement with Iran, where it has sold network gear, but recently said it would no longer supply Iran after its contracts there end.

Neither Symantec nor Huawei had immediate comment regarding the report. However, William Plummer, vice president of external communications at Huawei, who spoke with Network World last week about these topics, says assertions made in a Wall Street Journal story late last year that Huawei was helping Iran conduct cyber-surveillance against its citizens, especially dissidents, simply isn't true.

Plummer said Huawei's telecom equipment does have the equivalent of a backdoor for government use, but it is the same kind that is mandated in equipment by the U.S. under the Communications Assistance for Law Enforcement (CALEA) laws in the U.S. This kind of interface is there for governments around the world, he notes.

"Every government on this planet has a shared concern about security," Plummer said. He said Huawei, which did $32 billion in business last year, is not part of the Chinese government, although its founder, Ren Zhengfei, is an ex-Army officer in the PLA. However, a number of U.S. lawmakers are pushing to investigate Huawei and its ties to Iran, especially as concerns the WSJ's allegations of tracking of wireless mobile use in Iran.

In general, cyber-espionage is a fact of life today, Plummer acknowledged. Based on his own experience in the U.S. foreign service, he noted, "I believe there's hacking of all sorts" by Russia, China and the U.S.


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