Lin Min

    HERE is a funny line from “The Green Hornet:”

    Kato: “I was born in Shanghai. You know Shanghai?”

    Britt Reid: “Yeah, I love Japan.”

    Reid is a fictitious character but some U.S. lawmakers showed they were just as ignorant of China as Reid when they made unfounded accusations against two Shenzhen telecom equipment makers.

    The Wall Street Journal’s Web site Friday published two stories on how these lawmakers are trying to thwart the deals between two prominent Shenzhen firms and their U.S. counterparts, labeling them a threat to U.S. security. The headlines, “Huawei Deal in Peril” and “ZTE Finance Chief Urges ‘Fairness’ in U.S.,” spelled out the political obstacles facing Huawei and ZTE in their expansion into the U.S. market.

    The first story said a U.S. government panel was poised to recommend that President Obama unravel an acquisition made by Huawei Technologies. This means the US$2 million deal last May by the world’s second-largest maker of telecom equipment to buy the assets of 3Leaf Systems, a U.S. developer of technology that transforms server computers into more powerful machines, is in peril.

    According to the Journal report, in a letter to U.S. Treasury Secretary Timothy Geithner and Commerce Secretary Gary Locke, five lawmakers wrote Thursday that Huawei poses a national security risk.

    The lawmakers said Huawei has close ties with China’s military and has financial support from the Chinese Government. Such allegations are based on speculation and show ignorance of easily accessible facts.

    Speculation had been rife for years that Huawei was controlled by, or connected with, China’s military. Such speculation had stemmed from Huawei’s poor public relations strategy in its early years and that founder Ren Zhengfei served in the Army before establishing the firm in Shenzhen.

    After suffering from a string of setbacks in overseas expansion, Huawei has recently adopted a more open strategy in disclosing ownership. According to information on its Web site, Huawei is privately owned by 61,457 employees. Its Web site clearly states that no other institutions, including government agencies, hold any interest in the company. The employees collectively hold 98.58 percent of the company’s shares while Ren, who had been demobilized before founding the firm, owns the remaining 1.42 percent. I have two friends working at Huawei and know that the company’s ownership information is correct.

    My friends have worked in the company for years and I’m convinced that Huawei is the epitome of Shenzhen’s entrepreneurship and innovation, rather than a plot by the military to steal technology from other countries.

    The U.S. lawmakers are misleading Obama by giving false information about Huawei. Their efforts to torpedo the deal, worth only US$2 million, are reminiscent of the ancient witch hunts.

    Similarly, ZTE, another Shenzhen-based telecom equipment giant, encountered political obstacles when trying to supply network equipment to U.S. operator Sprint Nextel Corp., according to another Journal report Friday. Last year, four U.S. lawmakers pressed the U.S. Government to take a closer look at Chinese telecom equipment makers — including Huawei and ZTE — and consider restrictions that would make it harder for them to conduct business in the U.S. The lawmakers’ move came just weeks before Sprint was expected to choose suppliers for a multibillion-dollar network upgrade. ZTE had been among six vendors bidding for the project, but was later disqualified by Sprint Nextel Corp., citing U.S. government security concerns.

    Again, concerns about ZTE’s expansion and operations in the U.S. were based on speculation that the Chinese Government had influence in the company. Dual-listed on Shenzhen and Hong Kong stock exchanges, ZTE is even more transparent than Huawei because, as a listed company, it is required by mainland and Hong Kong laws to disclose major financial and operational information to investors at home and abroad.

    Both ZTE and Huawei are joint-stock companies just like Motorola and Apple Inc., with governments having no say in their operations. Surely the two Shenzhen firms are darlings of the city government, not because they are instruments of the Chinese Government aiming to threaten telecom security in other countries as feared, but because these profitable companies are cash cows for the city coffers and pillars of the local economy. They may have received better credit treatment from banks, State-owned or privately owned, just because they are credit-worthy and highly profitable.

    Officials in China and the U.S. have called on each other to open their markets further. The political maneuver by the U.S. lawmakers serves only to obstruct Sino-U.S. business ties. The witch hunt against these Shenzhen companies damages a fair and free business environment of which America has been so proud.

    (The author is editor of the Shenzhen Daily News Desk.)