Huawei, ZTE: Victims of US Presidential battle?

Huawei, the world’s second largest vendor of network equipment has been attempting to make inroads into the US market for many months now, as has been its smaller compatriot, ZTE. However, a report by a US Congressional Intelligence Committee may have wiped out any chances of living the American dream for both companies.
On Monday, the Financial Times reported that a draft of the report has “concluded that both companies pose a threat to US national security and should be restricted more tightly from doing business in the US”.
The Committee has accused Huawei of offering bribes and violating US immigration laws. But the gravest allegation is that the Company is closely linked with an elite unit for cyber war within the People’s Liberation Army. It concludes that, “China has the means, opportunity and motive to use telecommunications companies for malicious purposes”.
Both companies have expressed their disappointment at the recommendation of the report and denied the allegations. The Chinese government has also called on the US Government to shed its “bias against Chinese” firms.
However, the timing of the report, in the run up to the US Presidential elections, is likely to drag it to the forefront of the political arena.
Republican presidential nominee, Mitt Romney has already “made it a key point to get tougher on China by designating it a currency manipulator and fighting abuses such as intellectual property theft” cited the Guardian on Monday. Not to be outdone, President Obama has also been pandering about clamping down on Chinese trade violations.
China bashing is not new to American politics. Democrat and Republican politicians have been getting red and blue in the face harping on against the Chinese currency which they maintain has been kept artificially cheap to keep Chinese exports competitive worldwide. Periodic adjustments in the foreign exchange rate of the Yuan have been largely ignored to build this argument.
Similarly, despite itself being among the world’s largest polluters and emitters of Green House Gasses (GHGs), the US has come down hard against China for subsidising companies engaged in the sustainable energy sector.
In all likelihood, Huawei is closely linked to the Chinese state machinery, not in the least considering the fact that it was established by a former military man. However, the fact that the Committee which issued the report is controlled by Republicans and that its investigation which lasted over a year, culminated in the form of a report in the middle of the Presidential debates suggests that there may be more here than meets the eye.
One thing is for sure, while Huawei and ZTE officials lick their wounds, both President Obama and his challenger Romney will be referring to the report soon to score some points on foreign policy.