In the week that Huawei and ZTE denies being a threat to US national security, is it fair to say that Huawei is being discriminated against by overseas regulatory bodies?

According to Huawei’s Australia chairman John Lord, there were elements of disappointment and obfuscation when the Australian government banned the Chinese vendor from their $40bn+ NBN (National Broadband Network) in March this year.

Lord informed an Australian parliamentary intelligence committee of his worry that this would set a precedent against companies from certain countries.

At the time, Huawei said the company was informed late last year that there was no role for them to play in NBN, but Huawei stated, in a submission to the committee: “We believe the principle of non-discrimination should be clearly set out in any legislative reform”.

A similar sentiment, albeit more overtly worded, is evident on a paper published on Huawei’s US website written by Dan Steinbock – but not by Huawei – claiming that potential business in the US is being thwarted by incorrect allegations.

Any doubts about the tone of the paper are immediately dispelled by the opening page, which quotes a CBS broadcast on Senator McCarthy in 1954: “We must remember always that accusation is not proof, and that conviction depends upon evidence and due process of law”.

Steinbock calls Huawei founder Ren Zhengfei “tragically misunderstood” in the United States, adding that “in the absence of substantiated allegations, Ren should not be shunned by Capitol Hill; he should be a welcome guest and advisor in the development of US-China relations”.

These ‘unsubstantiated allegations’, of course, refer to Ren’s well-known links to the Chinese military, which it is believed has hindered Huawei’s expansion process overseas. However Ren categorically denies links, saying he was made redundant from the People’s Liberation Army over 30 years ago.

Huawei has gone at length to distance itself from the report – despite the fact that it’s published on their website under ‘news and resources’ – with a US spokesman stating the words were the property of Steinbock and not Huawei.

Steinbock wrote: “Today, Huawei is one of the most misunderstood companies in America. Huawei’s activities are not a threat, but an opportunity to the United States”.

An opportunity, or a threat to US security?

This has all come about in the week that Huawei, alongside ZTE, has been interrogated by a US House Intelligence Committee concerning the potential use of spying codes in their equipment, and whether they pose a threat to US national security.

In his opening statement, committee chairman Mike Rogers said: “We must get to the truth and see if these companies are tied to, or influenced by, the Chinese government [and] whether they provide a means for further economic and foreign espionage by a foreign-nation state known to be a major perpetrator of cyber espionage”.

The submission of Charles Ding, corporate senior vice president of Huawei, revealed some intriguing insights.

Almost immediately, he stated “Huawei is an independent, employee-owned company”, and later on: “No third party – including government institutions – has any ownership interest in Huawei”.

With regard to cyber security, Ding continued: “As a global company that earns a large part of its revenue from markets outside of China, we know that any improper behaviour would blemish our reputation; would have an adverse effect in the global market; and ultimately would strike a fatal blow to the company’s business operations”.

ZTE’s positon was similarly unyielding.

Zhu Jinyun, North America and Europe senior VP, said: “The Committee’s central question has been, ‘would ZTE grant China’s government access to ZTE telecom infrastructure equipment for a cyber attack?’

“Mr. Chairman, let me answer emphatically: no! We expect the Chinese government never to make such a request of ZTE…if such a request were made, ZTE would be bound by US law”.

Both parties’ positions are clear, but who will win the battle?

Elsewhere, the UK seems satisfied with the telecoms provider’s activities, if a $2 billion (£1.2bn) expansion project announced this week is anything to go by.

The expansion will result in approximately 700 jobs coming to the country over five years, as Huawei CEO Ren Zhengfei met Prime Minister David Cameron this week.

Despite these difficulties, the figures aren’t all bad. In July, Huawei announced more sales revenue posted than Ericsson through Q1 and Q2 of 2012, making it the largest telecom equipment vendor in the world.

But with Australia having banned Huawei from the NBN, seemingly with no explanation, and the US grilling Huawei and ZTE over security fears, are they right to be cautious?