'Stand up to Beijing,' Hong Kong singer Denise Ho tells U.S. lawmakers and companies

REUTERS

Denise Ho and Badiucao

WASHINGTON – Hong Kong singer and activist Denise Ho wants U.S. lawmakers and companies to criticize Beijing’s actions in Hong Kong to help change the Chinese Communist Party’s behavior.
Ho said Monday that Beijing was using its power and influence to quash dissent around the world, and urged businesses who invest in China and Hong Kong, a former British colony, to robustly support human rights and democracy.
The Chinese territory has been rocked by more than three months of sometimes violent clashes, with demonstrators angry about what they see as creeping interference by Beijing in Hong Kong’s affairs, despite a promise of autonomy. 

Beijing is exporting its authoritarian values around the world, Ho said.
“The only way to counter this global suppression is by hitting (China) where it really hurts,” she said. “The communist government doesn’t care about anything other than the economy. They don’t care about human rights and they don’t care about these universal values that we do have.”
“We see businesses profiting” in China, she said. 

“There are a lot of U.S. companies that have been based in Shenzhen, and they have turned a blind eye to this issue, to these human issues.”

Ho will testify with Joshua Wong, secretary-general of Hong Kong’s Demosisto party and leader of the “Umbrella Movement,” and other activists in U.S. Congress on Tuesday at an event hosted by the Congressional-Executive Commission on China (CECC).
U.S. lawmakers are fine-tuning a bipartisan bill that would require an annual review of the special treatment Washington gives Hong Kong, including trade and business privileges, under the U.S. Hong Kong Policy Act of 1992.
The Hong Kong Human Rights and Democracy Act would also make officials in China and Hong Kong, who have undermined the city’s autonomy, vulnerable to sanctions.
Donald Trump, who has been waging a tit-for-tat tariff war with China for more than a year, has suggested China should “humanely” settle the problem before a trade deal is reached.
Credit rating agency Moody’s on Monday lowered its outlook on Hong Kong’s rating to negative from stable, reflecting what it called the rising risk of “an erosion in the strength of Hong Kong’s institutions” amid the city’s ongoing protests.
Ho said the trade war had offered a “protective shield” for the people of Hong Kong, sheltering them from a violent Beijing crackdown, such as the deployment of troops.
Ho said the bill's passage would send a powerful signal to other countries and reaffirm U.S. leadership in the world.
“Hong Kong is in the front lines of this very global fight for humanity itself,” she said.

Hong Kong Human Rights and Democracy Act

Joshua Wong seeks U.S. support for pro-democracy protests

By Gabriella Borter

NEW YORK -- Hong Kong pro-democracy activist Joshua Wong said on Saturday he was seeking the support of U.S. lawmakers for the demands of his fellow protesters who have led months of streets demonstrations, including a call for free elections.
Wong, who spoke to Reuters in New York ahead of a planned visit to Washington, led Hong Kong’s pro-democracy “Umbrella Movement” in 2014. 

The latest protests, which began over a now-withdrawn extradition bill but grew into demands for greater democracy and independence from mainland China, are mostly leaderless.
“We hope ... for bipartisan support,” Wong said of his trip to Washington, adding that U.S. lawmakers should demand the inclusion of a human rights clause in ongoing U.S.-China trade negotiations.
He said he also hoped to convince members of Congress to pass the Hong Kong Human Rights and Democracy Act, which would require an annual justification of the special treatment that for decades has been afforded to the Chinese-ruled city by Washington, including trade and business privileges.
The bill would also mean that officials in China and Hong Kong who undermined the city’s autonomy could face sanctions. 

Democratic U.S. Senator Chuck Schumer said earlier this month that it would be a priority for U.S. Senate Democrats in their new session, which started on Monday.
Hong Kong returned to China from British rule in 1997 under a “one country, two systems” formula that guarantees freedoms not enjoyed on the mainland.
China has accused foreign powers, especially the United States and Britain, of fueling the unrest.
The latest protests, often involving violent clashes with police, have roiled Hong Kong for more than three months. 

Millions of people have taken to the city’s streets, even shutting down its airport for two days. Demonstrators’ demands include an independent inquiry into police brutality and universal suffrage.
There were clashes in the Kowloon Bay area on Saturday. 

But the unrest was minor compared with previous weeks when protesters attacked the legislature and Liaison Office, the symbol of Chinese rule, trashed metro stations and set street fires. 

Police have responded with tear gas, rubber bullets and water cannon.
China is eager to quell the protests before the 70th anniversary on Oct. 1 of the founding of communist China. 

Wong said the Hong Kong people would keep fighting for their cause through the anniversary.
“We will continue our protest with our course on free elections,” he said. 

“I see no reason for us to give up and it’s time for the world to stand with Hong Kong.”

Evil Tech

Google's China censorship plan spurs inquiry from U.S. lawmakers, staff departures

By David Shepardson, Paresh Dave

A bipartisan group of 16 U.S. lawmakers asked Alphabet Inc’s Google on Thursday if it would comply with China’s internet censorship and surveillance policies should it re-enter the Chinese search engine market.
The questioning added to the pressure on Google to disclose precautions it would take to protect the safety of its users if Chinese regulators allow its search engine to operate.
More than 1,000 Google employees, six U.S. senators and at least fourteen human rights groups have written to the company expressing concern about its China ambitions.
On Thursday, Jack Poulson, a research scientist who had worked for Google for more than two years, said he resigned because he felt the company was not honoring its commitment to human rights norms in designing the search app.
Poulson told Reuters that executives would not specify to him where the company would draw the line on agreeing to Chinese demands.
“Unfortunately, the virtually unanimous response over the course of three very vocal weeks of escalation was: ‘I don’t know either,’” Poulson said.
He was among a handful who resigned, he told the Intercept online publication, which first reported on his action.
Google declined to comment directly on the lawmakers’ letter or the resignations but said in a statement it had been “investing for many years to help Chinese users” and described its “work on search” for China as “exploratory” and “not close to launching.”
Reuters reported last month that Google planned to seek government clearance to provide a version of its search engine in China that blocks some websites and search terms.
Members of the U.S. House of Representatives, including liberal Democrats and conservative Republicans, said in their letter on Thursday they had “serious concerns” about the potential step.
The letter asked if Google would “ensure that individual Chinese citizens or foreigners living in China, including Americans, will not be surveilled or targeted through Google applications.”
Representative David Cicilline, a Democrat and signer of the letter, wrote on Twitter that “Google should not be helping China crack down on free speech and political dissent.”
Other signers include Representative Michael McCaul, a Republican who chairs the House Homeland Security Committee.
The company could face questions about China when it testifies on privacy issues before a Senate panel on Sept. 26.
House Majority Leader Kevin McCarthy, a Republican, said on Tuesday that Google would be invited to testify on a number of issues. 

He wrote on Twitter that Google had worked with China and Russia on censorship but no longer wanted to do a technology deal with the U.S. Defense Department.
Google’s main search platform has been blocked in China since 2010, but it has been attempting to make new inroads into the world’s largest smartphone market by users.
Google’s re-entry is not guaranteed as China has stepped up scrutiny of business dealings involving U.S. tech firms including Facebook Inc and Apple Inc amid intensifying trade tensions between Beijing and Washington.

U.S. lawmakers back sanctions over China's Muslim Final Solution

Reuters

U.S. Sen. Marco Rubio (R-FL) asks a question of U.S. Secretary of State Mike Pompeo during Pompeo's appearance before a Senate Foreign Relations Committee hearing titled "An Update on American Diplomacy to Advance Our National Security Strategy" on Capitol Hill in Washington, U.S., July 25, 2018.

WASHINGTON -- The Republican leaders of a U.S. congressional commission on China urged President Donald Trump’s administration on Wednesday to broaden sanctions on Chinese officials over its treatment of minority Muslims in the East Turkestan region.
In a letter on Wednesday, Senator Marco Rubio, chairman of the Congressional-Executive Commission on China, and Representative Chris Smith, the co-chairman, asked Secretary of Commerce Wilbur Ross to expand the list of Chinese entities barred from purchasing equipment that could be used for surveillance.
“Given the national integration of China’s state security apparatus, we believe there should ... be a presumption of denial for any sale of technology or equipment that would make a direct and significant contribution to the police surveillance and detection system (in East Turkestan),” Rubio and Smith said.
The U.S. State Department on Tuesday expressed deep concern over China’s “worsening crackdown” on minority Muslims in the East Turkestan region, as the Trump administration considered sanctions against Chinese senior officials and companies linked to allegations of human rights abuses.
Discussions have gained momentum within the U.S. government over possible economic penalties in response to reports of mass detentions of ethnic Uighurs and other Muslims, which has prompted a growing international outcry.

Tech Quisling

U.S. lawmakers want Google to reconsider links to China's Huawei

Reuters

WASHINGTON -- Republican and Democratic U.S. lawmakers asked Alphabet Inc’s Google on Wednesday to reconsider its work with Chinese telecommunications firm Huawei Technologies Co Ltd, which they described as a security threat.
In a letter to Google Chief Executive Sundar Pichai, the lawmakers said Google recently decided not to renew “Project Maven,” an artificial intelligence research partnership with the U.S. Department of Defense.
“While we regret that Google did not want to continue a long and fruitful tradition of collaboration between the military and technology companies, we are even more disappointed that Google apparently is more willing to support the Chinese Communist Party than the U.S. military,” they wrote.
The letter was signed by Republican Senators Tom Cotton and Marco Rubio, Republican Representatives Michael Conaway and Liz Cheney, and Democratic Representative Dutch Ruppersberger.
Google spokeswoman Andrea Faville said the company looked forward to responding.
The letter was the latest in a series of efforts by members of the U.S. Congress to target Huawei, and ZTE Corp, another major Chinese telecommunications equipment company.
They have written bills that would bar government agencies from using the companies’ products and try to overturn Donald Trump’s agreement to end a ban on ZTE.
Earlier this month another senator, Democrat Mark Warner, wrote to Alphabet and other technology companies asking about any data-sharing agreements with Chinese vendors.

Lawmakers Take Aim at Chinese Tech Firms

Bipartisan groups introduce amendment to scuttle Trump’s deal with ZTE, scrutinize Huawei’s ties to Google
By Siobhan Hughes, Kate O’Keeffe and John D. McKinnon

The deal that the Trump administration announced Thursday with China’s ZTE Corp. was immediately opposed by a bipartisan group of U.S. lawmakers as a threat to national security. 

WASHINGTON—Lawmakers in Congress lost a battle over ZTE Corp. when the Trump administration announced a deal Thursday to resuscitate the Chinese telecommunications giant, but they made it clear their war against Chinese technology companies is far from over.
Hours after the Commerce Department announced a deal that would prevent ZTE’s collapse by allowing it to resume buying components from U.S. suppliers, a bipartisan group of lawmakers introduced an amendment to a must-pass bill in an effort to undo the deal.
Members of Congress have also begun scrutinizing Google’s relationship with China’s Huawei Technologies Co. 

A group of lawmakers that includes some of the biggest critics of Huawei—Sens. Tom Cotton (R., Ark.) and Marco Rubio (R., Fla.) and Reps. Mike Conaway (R., Texas) and Robert Pittenger (R., N.C.)—is looking at Google’s operating-system partnership with Huawei.
Sen. Mark Warner (D.,Va.) issued his own open letter early Thursday to Google parent Alphabet Inc. and Twitter Inc., asking for information about any data-sharing agreements between the two companies and Chinese vendors. 

He also asked for information from Alphabet about separate partnerships with Chinese phone maker Xiaomi Corp. and Chinese tech giant Tencent Holdings Ltd.
The effort to reverse the ZTE deal marks the second time this week that the Republican-led Senate has threatened direct confrontation with Donald Trump over a signature policy issue.
A group of senators is also seeking to undo tariffs that Trump recently imposed on aluminum and steel imports from Canada, the European and Mexico. 

They have taken a dispute that was a war of words into the more serious realm of legislation that could handcuff the president.
Trump has made trade, and particularly fixing what he views as an unfair global trading system, a centerpiece of his agenda. 

That has entailed confronting both China and close allies, and threatening tariffs on a range of goods. When Trump last month said he was planning to reverse the penalties on ZTE, as the administration was pushing Beijing to commit to buy more U.S. exports, lawmakers from both parties accused him of conflating trade and national-security issues. 

The administration denies that.
While some Republicans have shied away from confronting Trump over his trade agenda, they appeared more prepared on Thursday to challenge the deal with ZTE, where national- security issues are more clear-cut. 

U.S. officials have warned for years that the telecom firm’s equipment, along with equipment made by rival Huawei, could be used to spy on Americans.
In mid-April, the U.S. banned exports to ZTE as punishment for the Chinese company breaking the terms of a settlement to resolve its sanctions-busting sales to North Korea and Iran. 

The penalty, which the Commerce Department said Thursday it would now lift as part of a new deal, amounted to a death knell for ZTE.
Backers of the ZTE amendment introduced Thursday, led by Mr. Cotton along with Senate Minority Leader Chuck Schumer (D., N.Y.) and Sen. Chris Van Hollen (D., Md.), are hoping to attach it to the National Defense Authorization Act, which could get a vote as soon as next week. 

Senate Majority Leader Mitch McConnell (R., Ky.) hasn’t said whether he expects the amendment to go to a vote, or whether it could make it into the package by other means.
Sen. Lindsey Graham (R., S.C.), who urged his colleagues to back off their effort to void Trump’s aluminum and steel tariffs after meeting with the president this week, said he wasn’t yet comfortable with the ZTE deal.
“I don’t know,” Mr. Graham said. 

“I want to give the president as much latitude as we can to negotiate with China and get a good deal with North Korea. Our intelligence community is very concerned. I want to know from them: do these changes alleviate their concerns?” he said.
The Commerce Department agreement announced Thursday requires ZTE to pay a $1 billion fine and allow U.S. enforcement officers inside the Chinese company to monitor its actions. 

In exchange, it allows ZTE to resume buying components from U.S. suppliers that it needs to make smartphones and build telecoms networks.
“I’m not comfortable yet,” said Sen. Roy Blunt (R., Mo.), a member of the Senate Intelligence Committee who has declined to back an effort to subject Trump’s metals tariffs to congressional approval. 

“I want to know more about the U.S. presence inside the company and why we should believe that that creates a level of assurance that we need to have about their capacity to do things that we wouldn’t want to have them do.”
The amendment introduced by lawmakers on Thursday would also prohibit U.S. government agencies from purchasing or leasing telecom equipment or services from ZTE or Huawei, and ban the U.S. from subsidizing those firms with grants or loans.
A ZTE spokeswoman didn’t immediately respond to a request for comment.
The fight over ZTE between Trump administration officials and China hawks in Congress began last month. 

Just weeks after the Commerce Department had banned U.S. companies from selling to ZTE, Trump suggested he was considering reversing the penalty. 

He tweeted May 13 that he and Chinese dictator Xi Jinping were “working together to give massive Chinese phone company, ZTE, a way to get back into business, fast.” 

He added: “Too many jobs in China lost. Commerce Department has been instructed to get it done!”

The tweet incensed many members of Congress, as well as intelligence and military officials, who moved swiftly to denounce any prospect of a reprieve through a series of legislative actions and an aggressive publicity campaign.
The debate over ZTE in Congress likely will have ramifications for the fall elections, as well as for trade policy. 

Polling has suggested that voters remain wary of China, a fear that Trump is tapping with his get-tough rhetoric.
The Wall Street Journal/NBC poll in April found that most U.S. voters view China as an adversary rather than an ally. 

Fear of China is especially intense among Trump supporters. 

But it is also substantial among older voters, whites and Republicans in general.
In private meetings with GOP senators this week, Trump argued in favor of reaching a deal with ZTE, which his administration struck after the president personally negotiated with Xi. 

The White House has also argued that if ZTE goes out of business, it will simply be absorbed by Huawei, lawmakers said, leaving the U.S. without protections included in the deal, such as the installation of Chinese-speaking American enforcement officers inside the company to monitor its actions.
That carried little weight with Mr. Rubio, who co-sponsored Thursday’s amendment and who has been among the most vocal members of Congress on the issue. 

“If Huawei is an even bigger problem than ZTE, we shouldn’t be selling them semiconductors either,” he said.
Lawmakers said the administration’s handling of the ZTE issue was evidence of dysfunctional trade policies. 

In a speech on the Senate floor Thursday, Mr. Schumer said: “Trump has directed far too much of the administration’s energies on trade toward punishing our allies, like Canada and Europe, instead of focusing on the real menace, the No. 1 menace: China.” 

Mr. Schumer was referencing Trump’s decision last week to impose tariffs on America’s closest allies.
While the ZTE drama unfolded Thursday, lawmakers’ ramped-up scrutiny of Google’s deal with Huawei represented another front in the offensive against Chinese tech companies: data sharing. 

Trump administration officials and lawmakers had earlier largely limited their actions to trying to reduce ZTE’s and Huawei’s U.S. footprints. 

Now, members of Congress appear more willing to examine partnerships between U.S. firms and the two companies that have nothing to do with U.S. sales.
A representative for Huawei wasn’t immediately available to comment.
A Google spokesman said in a statement the company looks forward to answering lawmakers’ questions, adding: “We do not provide special access to Google user data as part of these agreements, and our agreements include privacy and security protections for user data.”
Derek Scissors, a China scholar at American Enterprise Institute, said the ZTE deal makes little sense if U.S. policy goals are to both keep Chinese firms out of the U.S. telecom network and keep them from getting access to Americans’ personal data.
“If we don’t trust Chinese telecommunications firms, why are we helping them become more capable?” he said.

Insane Clown President

U.S. lawmakers push back on Trump talk of helping China's ZTE

By Patricia Zengerle, Richard Cowan

WASHINGTON -- U.S. lawmakers on Tuesday rejected any plan by Donald Trump to ease restrictions on China’s ZTE Corp, calling the telecommunications firm a security threat and vowing not to abandon legislation clamping down on the company.
Trump on Monday had defended his decision to revisit penalties on ZTE for flouting U.S. sanctions on trade with Iran, in part by saying it was reflective of the larger trade deal the United States is negotiating with China.
“I hope the administration does not move forward on this supposed deal I keep reading about,” Republican Senator Marco Rubio said. 

Bilateral talks between the world’s two biggest economies resume in Washington this week.
The Trump administration is considering an arrangement under which the ban on ZTE would be eased in exchange for elimination of new Chinese tariffs on certain U.S. farm products, including pork, fruits, nuts and ginseng, two people familiar with the proposal said. 

The potential arrangement was first reported by the Wall Street Journal.
“They are basically conducting an all-out assault to steal what we’ve already developed and use it as the baseline for their development so they can supplant us as the leader in the most important technologies of the 21st century,” Rubio said at a Foreign Relations Committee hearing on Asia policy.
Trump had taken to Twitter on Sunday with a pledge to help the company, which has suspended its main operations, because the penalties had cost too many jobs in China. 

It was a departure for a president who often touts “America First” policies.
The Commerce Department in April found ZTE had violated a 2017 settlement created after the company violated sanctions on Iran and North Korea, and banned U.S. companies from providing exports to ZTE for seven years.
U.S. companies are estimated to provide 25 percent to 30 percent of components used in ZTE’s equipment, which includes smartphones and gear to build telecommunications networks.

CYBERSNOOPING
The suggestion outraged members of Congress who have been pressing for more restrictions on ZTE. U.S. lawmakers alleged equipment made by ZTE and other Chinese companies could pose a cyber security threat.
“Who makes unilateral concessions on the eve of talks after you’ve spent all this time trying to say, correctly in my view, that the Chinese have ripped off our technology?” Senator Ron Wyden, the senior Democrat on the Senate Finance Committee, which oversees trade policy, told Reuters.
Wyden, who is also on the Intelligence Committee, was one of 32 Senate Democrats who signed a letter on Tuesday accusing Trump of putting China’s interests ahead of U.S. jobs and national security.
Republican Representative Mac Thornberry, chairman of the House Armed Services Committee, said at a Bloomberg event on Tuesday he did not expect lawmakers would seek to remove a ban on ZTE technology from a must-pass annual defense policy bill making its way through Congress.
“I confess I don’t fully understand the administration’s take on this at this point,” Thornberry said. 

“It is not a question to me of economics, it is a question of security.”

Lawmakers urges U.S. Treasury to reject Aleris sale to China aluminum giant

Reuters

United States Secretary of the Treasury Steven Mnuchin speaks at a news conference on Parliament Hill in Ottawa June 9, 2017.

More than two dozen U.S. lawmakers have urged U.S. Treasury Secretary Steven Mnuchin to reject the proposed sale of U.S. aluminum products maker Aleris Corp to China Zhongwang Holdings Ltd to protect U.S. security interests.
In a June 9 letter to Mnuchin shared with Reuters, the 27 lawmakers said it would be a "strategic misstep" to allow the $2.33 billion sale to go ahead.
"It is critical that CFIUS (Committee on Foreign Investment in the United States) exercise extreme caution when a foreign investment transaction includes the transfer of military proficiencies and sensitive technology to China," the lawmakers wrote.
They added: "It would be a serious strategic misstep to permit a company like Zhongwang Holdings Ltd to take control of a U.S. aluminum firm like Aleris."
The lawmakers said Aleris was involved in the production and testing of specialized alloys used by the defense industry, and the company's research and technology were critical to U.S. economic and national security interests.
"Chinese entities, including state-owned or state-controlled enterprises, maintain relationships with China's military, compounding the risk that U.S. technologies will fall into the wrong hands," they wrote.
Additionally, Zhongwang was under investigation by the U.S. Department of Commerce for evading U.S. import duties, and was being probed by U.S. agencies over allegations of smuggling, conspiracy and wire fraud, they said.

Zhongwang, backed by Chinese aluminum magnate Liu Zhongtian, announced the deal in August, in a bet by the billionaire that the nascent U.S. automotive aluminum sector will be the industry's next big growth market.

Last November, a dozen U.S. senators wrote to then Treasury Secretary Jack Lew urging him to launch a review of the deal by the Committee on Foreign Investments by the United States.
Lawmakers who signed the new letter include House of Representative Democrats David Loebsack, Tim Ryan, Gene Green, Debbie Dingell, Seth Moulton, Marcy Kapur, Pete Aguilar, Tony Cardenas, Brenda Lawrence, Norma Torres, Linda Sanchez, and Republicans Robert Pittenger, Keith Rothfus, and French Hill.

Huawei Connection

U.S. Lawmakers Push to Widen Iran Sanctions Probe Beyond China's ZTE

By Saleha Mohsin and Andrew Mayeda

A group of Republican lawmakers is pushing the Trump administration to investigate and unmask a company that may have violated Iran sanctions laws in the same way as Chinese mobile-phone maker ZTE Corp.
ZTE agreed last month to pay as much as $1.2 billion after pleading guilty to shipping U.S.-origin products to Iran in violation of U.S. laws restricting the sale of American technology to the country. In a letter Tuesday, Republican Congressman Robert Pittenger of North Carolina, Alabama’s Mike Rogers and eight other lawmakers, called on Commerce Secretary Wilbur Ross to probe the actions of an "unidentified company" that ZTE has said also evaded U.S. export controls.
The rival is referred to only as “F7” in a ZTE document posted on the Commerce Department’s website. 

The lawmakers in their letter note that news reports have highlighted the similarities between the company described in the documents and Huawei Technologies Co., which is the largest Chinese networking equipment maker followed by ZTE.
“We strongly support holding F7 accountable should the government conclude that unlawful behavior occurred,” according to the letter. 

“We must publicly identify those who break the law so that their activities be taken into account when public procurement activities occur or where critical infrastructure vulnerabilities might arise.”

Smoother Relations
“We do not comment on any law enforcement matters that we may or may not be working on,” Commerce spokesman James Rockas said in an email.
ZTE declined to comment.
A deeper investigation may complicate Donald Trump’s efforts to smooth relations with China after accusing the nation during last year’s election of manipulating its currency and hurting American manufacturers. 

After meeting with Xi Jinping last week, Trump tweeted that it was a “tremendous” meeting.
As Commerce officials last year gathered evidence to add ZTE to its list of restricted companies, the department posted ZTE documents related to the case on its website. 

In a document dated August 2011, ZTE describes how it conducted business in Iran and other sanctioned countries, and cited F7 as a model for such activities.

Fraught Relations
The U.S. relationship with Huawei has been fraught. 

The government has suspicions about whether Huawei has been sending U.S. technology to rogue nations including Syria, Iran, North Korea and Cuba, people familiar with the matter have said. 

The Commerce Department sent an administrative subpoena to the company’s U.S. operations in Plano Texas, Bloomberg reported in June. 

The company said at the time it cooperates with U.S. export control laws.
In 2012, the House Intelligence Committee concluded that Huawei and ZTE represent national security risks. 

Two years earlier, former Commerce Secretary Gary Locke expressed concern about Huawei’s participation in bids for a network upgrade by Sprint Nextel Corp. 

The bids were awarded to companies from France, Sweden and South Korea.
In Tuesday’s letter, the lawmakers said F7 ’s business structure was similar to ZTE in creating a “cut-off” IT company “serving as its agent to sign contractors for projects in embargoed countries.” 

It adds that F7 hired export-control compliance specialists and expanded its export-control liaison offices.
Here are some of the similarities between F7 and Huawei as described in the ZTE document:

• A U.S. government panel blocked F7’s bid to purchase server technology provider 3Leaf Co. due to national security risks. Huawei backed away from a deal to buy California-based 3Leaf due to pressure from the U.S.
• F7 once had a joint venture with Symantec, a California-based digital security company. Huawei had a similar deal with Symantec, which was dismantled.

U.S. Lawmakers Urge Rejection of China-Linked Purchase of Lattice Semiconductor

Letter from lawmakers cite acquirer’s ties to Chinese state and comes days after Aixtron deal block.
By WILLIAM MAULDIN

Twenty-two House lawmakers wrote to Treasury Secretary Jacob Lew, who leads a panel that reviews foreign acquisitions, with unusually grave concerns about the purchase of Lattice Semiconductor Corp. 

U.S. lawmakers are warning the Obama administration not to green-light a China-backed semiconductor deal, increasing the pressure on Beijing just days after Barack Obama barred a Chinese investor from purchasing another technology firm with key semiconductor assets.
Twenty-two House lawmakers wrote to Treasury Secretary Jacob Lew, who leads a panel that reviews foreign acquisitions, with unusually grave concerns about the purchase of Lattice Semiconductor Corp.
Lattice, based in Portland, Ore., said last month it had agreed to a $1.3 billion buyout offer from Canyon Bridge Capital Partners Inc., a new private-equity firm backed by investors in China.
Canyon Bridge, whose activities hadn’t come to light until recently, is based in Palo Alto, Calif., and has funding from unspecified limited partners in China, according to documents Lattice filed with the Securities and Exchange Commission.
“We are concerned with this transaction as [Canyon Bridge] appears to be directly affiliated with the government of the People’s Republic of China and further appears to be a legal construction intended to obfuscate the involvement of numerous PRC state-owned enterprises during the Committee on Foreign Investment in the United States review process,” the lawmakers wrote in a letter dated Tuesday that was seen by The Wall Street Journal.
The committee that reviews foreign deals, known as CFIUS, can recommend that the president block investments emanating from abroad when officials identify national-security issues that can’t easily be mitigated.
On Friday, following a recommendation from CFIUS, Obama took the very rare step of blocking a deal outright, preventing a Chinese investment fund from purchasingAixtron SE, a German technology company with U.S. assets.
Obama’s move to strike down that deal—and the lawmakers’ letter Tuesday—show the escalating concern about Chinese deals targeting sensitive American assets, even before the administration of Donald Trump, who made criticism of Chinese economic moves a cornerstone of his campaign.
Lattice makes communications chips for use in cars, computers, mobile devices and other items. Analysts found one of its programmable chips—a variety known as FPGA, for field programmable gate array—in Apple Inc.’s new iPhone 7.
But in the letter lawmakers led by Rep. Robert Pittenger (R., N.C.) described FPGA as “critical to American military applications” and said “anything other than a rejection of this acquisition” would appear to undermine the administration’s recent public warnings about technology deals.
Commerce Secretary Penny Pritzker told a technology gathering in Washington last month that “we are seeing new attempts by China to acquire companies and technology based on their government’s interests—not commercial objectives.”
China’s Ministry of Foreign Affairs declined to comment directly on the action by U.S. lawmakers, but said Tuesday that “normal investment activities” between the two countries shouldn’t be politicized or “used as a tool to hype the so-called ‘China threat.’”
Beyond the hypercompetitive technology sector, some U.S. lawmakers and politicians are increasingly sour about rolling out the red carpet for Chinese deals in industries where Beijing has blocked international investment in its own market.
The Obama administration prioritized talks with Beijing on a bilateral investment treaty that would have opened up Chinese industries to U.S. investment, but the negotiations stalled over the number of industries China wanted to keep closed.