- The Washington Times - Saturday, February 23, 2008


As the $2.2 billion merger between U.S. network-equipment giant 3Com and the Chinese firm Huawei Technologies collapsed this week, Chinese Foreign Ministry Spokesman Liu Jianchao could be heard calling for a “fair and favorable environment for Chinese enterprises in the United States.” From a government that engages in extensive military and commercial espionage in the United States — four alleged operatives were just arrested passing U.S. military command-and-control technology to the People’s Republic — a cry for principle on mergers with security relevance is beyond belief.

This is the same government that regularly probes and attacks Pentagon computer systems for weaknesses. This is the government that regards Chinese firms as extensions of the state, to be commandeered and ordered about at will. Many are deeply penetrated by the People’s Liberation Army; Huawei is one of the least transparent. This is the same government that strong-arms American companies, including Google and Microsoft, into complying with Internet censorship laws, turning them into arms of Chinese surveillance as they block out unwanted content on democracy and human rights. It is also known to make some foreign companies comply with government investigations of dissidents. And yet, China wants “fair and favorable” treatment for its own foreign acquisitions abroad when sensitive technology is at stake. We’re used to doublespeak from Chinese officials, but this is a new low.

3Com, with nearly $800 million in 2006 sales and best known for its network infrastructure products, has real national-security relevance for the United States. Its cyber-security division, TippingPoint, is a leader in cybersecurity systems. The fear — a justified one — is that China’s oft-demonstrated computer-hacking capability would be measurably enhanced when (not if) TippingPoint technology was passed to the PLA and other Communist Chinese agencies.

This is a case of the Committee on Foreign Investment in the United States (CFIUS) process working appropriately.

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