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China Video Tools for U.S. Help Spurs Spy Anxiety
A manufacturer accused of being tied to the Chinese government has found a way to sell to U.S. agencies in an arrangement that's raising concerns from security officials and at least one lawmaker about spying.
ZTE Corp. (000063), China's No. 2 phone-equipment maker, linked up with a company in Baltimore to make its videoconferencing system available to federal offices.
The collaboration between Shenzhen-based ZTE and Prescient, a five-employee unit of closely held CyberPoint International LLC, comes amid warnings about China's military hacking into U.S. computers. A U.S. House committee report advised federal agencies and contractors last October to bypass ZTE and Huawei Technologies Co. products because they might help China spy.
"It's dangerous for our country," said U.S. Representative Frank Wolf, a�Virginia�Republican who has supported restrictions on government use of Chinese goods. "There are job losses, national security ramifications and intellectual property issues at stake."
The videoconferencing system, which carries both ZTE's and Prescient's names, was approved in November by the U.S. General Services Administration for sale to federal agencies.
Prescient said it assessed the device, documented its flaws and installed a U.S.-built hardware- and software-based firewall to block potential unauthorized access. That "substantially transformed" the product so it's no longer considered a Chinese device, said Jerry Caponera, general manager for global partnerships at CyberPoint, a cybersecurity company.
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