Why America sees red in corporate China
By David Pilling
Published: August 4 2010 22:12
Huawei, one of the world?s top telecommunications equipment manufacturers, likes to portray itself as an innovative, privately held business owned by its 20,000 employees. But all that most American officials see when they look at the fast-growing Shenzhen-based company is the red of the Chinese flag. Once again, Huawei has failed to crack the US market. Last month, its attempts to buy two US companies were thwarted when one bid for 2wire, an internet software group, and another for a unit of Motorola were rejected. Though Huawei had offered the highest price in both instances, fears that US regulators would block the acquisitions on security grounds short-circuited the process. The companies were sold instead to Pace of the UK and Nokia of Finland.
It is not the first time Huawei?s American parade has been washed out. In 2008, it dropped its bid for computer-equipment maker 3Com because of Washington?s concerns it could gain access to military-related anti-hacking technology. Huawei?s provenance hardly helps. Founded by Ren Zhengfei, a former officer in the People?s Liberation Army, it has failed to shake off suspicions that it is a front for the Chinese military, something it vigorously denies.
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