WASHINGTON-Huawei Technologies Inc., a Chinese telecom firm that is quickly becoming a global wireless juggernaut, is reportedly suspected of violating U.N. sanctions by supplying Iraq with fiber optic cable to improve its air defense capability.
The Washington Post, citing Western and Asian sources, said Western officials have asked Beijing to investigate whether Huawei was the supplier of fiber optic cable that U.S. and British forces targeted in bombings last month. China indicated it might conduct such a probe.
If verified, the Huawei-Iraqi connection could have broad implications for a U.S.-China trade relationship that offers unprecedented business opportunities for American wireless companies. China, having 1.3 billion people and inadequate telecom infrastructure, is tailor-made for wireless technology.
The alleged involvement of Huawei with Iraq comes at a time when China-whose human rights record is already under close scrutiny-seeks international approval to enter the World Trade Organization and to host the 2008 Summer Olympics.
The Chinese Embassy did not return a call for comment, and the State Department said it had no information to offer on the Post story. RCR Wireless News was unable to contact Huawei for comment. The Post said Huawei refused its request for an interview.
Huawei, headquartered in the southern boomtown of Shenzhen, is privately owned but is said to have strong ties to the People’s Liberation Army. In 2000, Huawei had $2.66 billion in sales and took in $1.5 billion the year before.
With sales offices in 45 countries and the prospect of having its Hong Kong subsidiary-Huawei Tech Investment-go public, Huawei is positioned to be a leading global vendor of Global System for Mobile communications, General Packet Radio Service and third-generation wireless technology.
Last December, Huawei signed a contract with China Mobile Communications Corp., becoming one of four suppliers (Motorola Inc., L.M. Ericsson and Nokia Corp. were the others) selected to provide GPRS equipment for mobile-phone systems covering 25 cities in 16 provinces. The networks will accommodate 409,000 subscribers. Huawei will build the GPRS networks of Shenyang and Dalian in Liaoning province and Zhangzhou in Fujian province.
Also last December Huawei Technologies inked a $10 million pact with Daewoo Unitel, the largest of four GSM operators in the Central Asian nation of Uzbekistan.
The Bush administration is taking a more cautious approach to U.S.-China relations than did the Clinton administration. President Bush supports free trade and tends to oppose attaching environmental or labor conditions to trade pacts. At the same time, the Republican administration is sensitive to alleged human rights violations in China and said it will not be shy about broaching the subject with Beijing.
Meanwhile, Bush and leading Republicans in Congress are pushing for fast-track authority. Such authority would enable the U.S. to negotiate a trade pact and force Congress to vote it up or down, without amendments.
“I will fight for legislation to renew the president’s trade promotion authority this year, before we start any new WTO trade negotiations,” said Senate Finance Committee Chairman Charles Grassley (R-Iowa) at a hearing on global trade policy last week.
Grassley said it will be important to rebuild domestic and international support for global trade in light of growing protests by environmentalists and organized labor against globalization.
And, in another possible foreshadowing of U.S. trade policy, Grassley said he will oppose any legislation that directly or indirectly involves the use of trade sanctions to enforce trade pacts.
Global Wireless Correspondent Michel Lens contributed to this article.
