In the article “Huawei and ZTE pose security threat, warns US panel”, the two firms have been stopped by US government from merging and acquiring any telecommunication of any US company. Thus, causing a dispute between the Chinese companies and US government. (http://www.bbc.co.uk/news/business-19867399)
The House Intelligence Committee of US reported in an unclassified report that the two Chinese companies have strong links with China’s government and military. With that US government strongly believed that it will cause threat to national security of US. The report also alleges that the companies are corrupted with bribery, discriminatory behavior and copyright infringement. But, the Huawei and ZTE claim that they meet all standards set by US and posed no threat.
Though it appears to be a harsh action by the US government, but it seems logical for them to take the move as the founder of Huawei is a former member of the People’s Liberation Army. While ZTE faced accusations that their equipment contains codes to relay sensitive information back to China.
Still, there has been no clear evidence by US that espionage is the true reason behind the acquisition. And, this is the first time US government blocks a foreign investment since 22 years ago. This may violent what seems to be a market economy image that US has. But, as Huawei and ZTE grows to be the one of the largest global players, is it possible that the true fear is that US is afraid of the dominance of these companies of the industry in US and eclipsing others? Or they are fearful of both possibilities and hence come to this decision as a precaution.
