“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Wednesday, February 16, 2011

Stop ChiCom's Thieving Huawei Technology from Acquiring US Assets

This video is three years old. The Chinese Will never stop.

February 15, 2011
The Chinese Force Obama's Hand
Steve McCann

American Thinker

President Obama, after his obsequious behavior toward the Chinese President, Hu Jintao, has been placed in a difficult position regarding a Chinese company, Huawei, and their takeover of a U.S. server technology company, 3Leaf Corporation.

Huawei, the third largest telecom equipment sellers in the world (3rd largest), was founded by a Peoples Liberation Army soldier. In a 2008 Military Report to Congress, the Pentagon stated that Huawei "maintains close ties" to the Chinese People Liberation Army (PLA). In the same year, another proposed merger with U.S. based communications company 3COM Corporation, after an investigation by Congress and the Director of National Intelligence concluded that the 3COM-Huawei merger would undermine U.S. national security.

The British blocked Huawei's bid to buy the telecom company Marconi in 2005 and in 2009 the British government was briefed on the potential security problems posed by Huawei's equipment in the British national telecom network BT. In 2009 and 2010, Australia and India aired similar concerns. The Indian Security Intelligence Service blocked and cancelled orders with Huawei citing these same security concerns. In 2010 this same concern was raised by a group of Republican lawmakers about Huawei's bid to supple mobile telecommunications equipment to Sprint Nextel Corporation.

The company has also been linked to the theft of intellectual property in the past. In 2003 Cisco Systems filed a lawsuit alleging Huawei was "engaged in blatant and systematic copying of Cisco's router technology." The case was settled out of court. In July 2010, Motorola filed a complaint alleging loss of confidential information to Huawei.

Last May, Huawei bought 3Leaf Corporation and failed to alert the U.S. government of the deal. After completing the review of the proposal, the Committee on Foreign Investments in the United States (CIFUS), suggested that the merger not be approved and Huawei divest itself of 3Leaf. CIFUS is an inter-agency panel that reviews deals with national security implications. Its members are drawn from the Defense, State, Homeland Security, Justice, Commerce and other departments.

However, Huawei, in an unprecedented move, has chosen not to voluntarily walk away from the deal and instead force the White House to make the final decision. That means the decision will, under law, now fall directly to President Obama, who has sole authority to issue a decision following a 15 day review of the panel's findings.

So how will the President in light of his behavior with the Chinese and dependence upon them for loans react? Obviously the leaders of Huawei and the Chinese Government expect his approval or they would not have taken the unprecedented step of forcing him into potentially overriding the panel tasked with making certain American security is tantamount in any business transaction of this sort.


  1. Huawei purchased 3Leaf for $2 million in May 2010.
    The U.S. government is concerned about Huawei holding 3Leaf because of Huawei’s relationship with the Chinese government. Huawei is awaiting a review of the situation by the White House, which should be released within two weeks.
    The deal allowed Huawei to purchase key parts of 3Leaf – even though the Chinese firm allegedly has dealt with known terrorists, according to a report from TechZone360.

  2. Alleged technology theft

    In February 2003 Cisco Systems filed motion for preliminary injunction against Huawei Technologies, quoting the defendant to be "engaged in blatant and systematic copying of Cisco's router technology". Cisco examined Huawei's operating system (VRP) and "found telltale signs that it was developed using Cisco's source code". In July 2004 Cisco, Huawei and 3Com filed a stipulation and order of dismissal with prejudice in the lawsuit filed by Cisco against Huawei in the United States District Court, Eastern District of Texas, Marshall Division, which means that Cisco can't bring another lawsuit against Huawei asserting the same or substantially similar claims.

    Huawei Technologies became the focus of a major intellectual property scandal again later in 2004, when a Huawei employee was examining and photographing circuit boards from a competitor's booth at the SuperComm tradeshow.

    In February 2009, the President of Indonesian mobile carrier Excelcomindo Pratama accused a visiting Huawei employee of trying to steal data from his firm, but confirmed that no data was stolen. Huawei suspended the employee.

    In July 2010, US-based mobile vendor Motorola Inc filed an amended complaint against Huawei claiming loss of confidential information to the Chinese company.

  3. Treatment of workforce and customers

    The US Army's Strategic Studies Institute report on Argentina published in September 2007 describes Huawei as "known to bribe and trap clients". The report further details unfair business practices, such as customers framed by "full-paid trips" to China and monetary "presents" to be offered and later used by Huawei as "a form of extortion".

    In October 2007, 7,000 Huawei employees have resigned and then rehired on new contracts, that they would not be bound by the unlimited contract provisions of the new Labour Contract Law. The company denied it was exploiting loopholes in the law, while the move was condemned by local government and trade unions.

  4. Global security concerns

    In 2005, the possibility of Huawei's bid on British telecommunications company Marconi has triggered a request from Conservative Party to UK government to "consider the implications for Britain's defense security".

    Marconi was later acquired by Swedish telecommunications giant Ericsson. In March 2009, Alex Allan, the Chairman of Joint Intelligence Committee, has briefed members of UK government about the "threat", allegedly imposed by Huawei's equipment in British national telecom network BT.

    In 2008 Military Report to the Congress,
    Pentagon stated that Huawei "maintains close ties" to Chinese People Liberation Army (PLA). In the same year, the proposed merger of US-based communications company 3COM Corp by Huawei met with US Congress investigation and subsequent determination by Director of National Intelligence that "3Com-Huawei merger would undermine U.S. national security".

    In September 2009, Australian security agency ASIO started investigating the alleged links between local Huawei employees and the PLA.

    In October 2009, Indian Department of Telecommunications reportedly requested national telecom operators to "self-regulate" the use of Chinese-made equipment (including ZTE and Huawei), quoting security concerns.

    Earlier, in 2005, Huawei was blocked from supplying equipment to India's national network BSNL.

    In 2010, Indian security intelligence (CBI) insisted on canceling the rest of the Huawei contract with BSNL and pressed charges against several top BSNL officers regarding their "doubtful integrity and dubious links with Chinese firms".

    In April 2010, Sistema Shyam Teleservices Ltd., the Indian unit of Russia's AFK Sistema, didn't get clearance to buy Huawei equipment.

  5. The founder of Huawei, Ren Zhengfei, was an officer of the People's Liberation Army. He joined the Communist Party of China in 1978, and is member of the 12th National Congress of the Communist Party of China.

    Among his other accomplishments, Ren is responsible for developing cooperative programs with businesses in China’s interior regions.

    His ties with the Chinese military and Communist Party are being cited as a security concern in not allowing Huawei to expand in India.

    This follows similar objections raised by the United States, which ultimately led to the collapse of Huawei's efforts to buy 3Com.

  6. sam said...
    I was at my bank today; there was a short line.

    There was just one lady in front of me, an Asian lady who was trying to
    exchange yen for dollars.

    It was obvious she was a little irritated . . . She asked the teller,
    "Why it change? Yesterday, I get two hunat dolla fo yen. Today I only
    get hunat eighty? Why it change?"

    The teller shrugged his shoulders and said,"Fluctuations."

    The Asian lady says, "Fluc you white people too"


    Can't let anyone miss that one.