November 18th, 2011
05:29 PM ET

House Intelligence chairman sees danger in Chinese technology

By CNN's Jill Dougherty and Pam Benson

The chairman of the House Intelligence Committee fears the phones we use and other telecommunication systems we depend upon could be a Trojan horse, giving the Chinese government access to the United States' critical infrastructure so it can carry out economic and military espionage.

Rep. Mike Rogers, R-Michigan, announced this week that the committee has launched an investigation into the threat posed by Chinese telecommunication firms operating in the United States. The primary focus of the probe is Huawei, a company Rogers referred to as "the 800-pound gorilla in the room."

Huawei is a $28 billion Chinese company employing 120,000 people worldwide with approximately 1,500 in the United States. It is one of the top three providers of telecommunications equipment and information communications technology in the world.

Rogers is suspicious of what he calls China's "voracious appetite" for stealing commercial intellectual property.

"When you see a company like this - their leadership has former ties to Chinese intelligence services - it leads one to wonder what is in all of the code in these particular networks," he said. "Would it enhance their ability to steal information? Yes. Would it enhance their ability to conduct attacks on networks? Absolutely."

Bill Plummer, Huawei's vice president of external relations, said the founder of the company was an engineer in the Chinese army, but left more than 25 years ago, and his private firm has no ties to Chinese intelligence.

"Huawei as a global leader in the industry currently serves over 500 operators in over 140 countries, including 45 of the world's top 50 telecommunications service providers, and hasn't experienced a single security incident," he said.

There is also an economic dimension to any decision to go after foreign companies in the United States who are employing thousands of Americans during a time of global financial crisis.

Huawei's Plummer said the company creates jobs in the United States - 1,500 direct jobs and 500 new ones this year alone. Added to purchases from U.S. high tech firms, that means tens of thousands of additional indirect jobs, he said.

But should security be ignored because Americans need jobs? Cyber expert Alan Paller from the Sans Institute acknowledged there is a major risk, but a necessary one.

"It's called a supply chain problem, where wherever we buy technology, here or abroad, somebody nefarious could put something into it. Big risk. But deciding not to do business with one company who might do that is cutting off your nose to spite your face because they create jobs. They create economic trade. They create opportunities."

However, Intelligence Committee Chairman Rogers doesn't buy that argument. "If in fact we find something that means there is a threat to the national security environment, I think there is a fine American company that can stand in to fill the void," he said. "Secondly, our national security should not be for sale."

Plummer said he potential vulnerability of telecommunications is a global and industrywide problem. He welcomed the congressional investigation, saying, "This is a legitimate concern and initiative to address what is an industrywide problem that has nothing to do with any one single company or any inputs from one single country."

And some cyber experts maintain it doesn't really matter if China or any other nation has a company with operations in the United States. Paller said there are hundreds of ways to get access to U.S. networks.

"It's not just China and it's not just Huawei. And it's so many people doing it ... it's whack-a-mole if you try to stop every one of these other countries," he Paller said. "What you need to do is better protection for your own systems and stop whining about the people who might possibly put something into those systems."

soundoff (12 Responses)
  1. Ivan

    Why is it that no one has even mentioned the fact that the BEST defense is a good OFFENSE. I would like to think that our collective intellengence community is actively trying to hack, infiltrate, and spy on China, Russia, etc. whether you do it indirectly through proxies or not.

    November 29, 2011 at 10:55 am | Reply
  2. cgamb5

    What Chairman Rogers and others fail to realize is that most, if not all of the other telecom equipment providers have outsourced nearly all of the software development to China. Who's to say those companies (ALU, Ericcson and others) aren't also contributing to the cyber war...but just don't know it...

    November 21, 2011 at 3:20 pm | Reply
  3. SEAL Team Alpha and Omega

    It's too late to do anything about this and our government does not have the backbone or will to stand up to China's leaders. We are now a debtor nation to China. They bark, we jump.

    November 20, 2011 at 3:02 pm | Reply
  4. SEAL Team Alpha and Omega

    I wish the so called "Christian" Tea Party would look at what is going on with China. It is amazing the largest Christian nation on Earth is now a debtor nation to the world's largest Communist nation on earth. Why doesn't Ralph Reed, Pat Robertson, James Dobson, Billy Graham and all the strict conservative Christians talk about this in the media??? Uh, . . . . . hello . . . . . is anyone out there?????? . . . .. ... is anybody home in the churches listening???????? I didn't think so, because they are too busy giving the middle finger to the middle-class and trying to abolish all government regulation and oversight of the very Wall Street CEOs who brought America to its knees causing Obama to bail them out. They ignore the Good Samaritan story because that is irrelevant to them today. Jesus’s words end where the middle-class begins according to the far right.

    November 20, 2011 at 2:59 pm | Reply
  5. Hfxclay

    China is engaging in a very covert and damaging cyber war with the US. Greedy US corporations have already handed over ourtechnilogy on a plate, free of cost of course, to take advantage of "cheao labor". Well, the Chinese govt has assured this cheapness of labor and manufactured goods by keeping the Remnimbi artifically low in comparison to the USD. The US already is on an economic lifeline from the Chinese and their path to the bottom is being hastened by the cyber war – which the US is losing big time.

    November 19, 2011 at 2:54 pm | Reply
  6. Pete

    Quit importing and build American,problem solved...we started the telecommunication age,so quit depending on cheap foriegn labor ,products,push AMERICAN enough said....

    November 19, 2011 at 11:26 am | Reply
  7. worldcitizen50

    Isn't that what Microsoft and Apple do, spy on their users? American companies are hypocrites

    November 19, 2011 at 10:06 am | Reply

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