A White House review found no clear evidence that Chinese telecom firms Huawei and ZTE were spying for the Chinese government, it was revealed today.
The findings come from an 18-month review conducted earlier this year by the White House, and contradict statements made last week when the US House of Representatives' Intelligence Committee ruled that Huawei and ZTE were a national security threat.
The Congress report warned that the Chinese manufacturers could use their products to spy on US infrastructure and communications for the Chinese regime, and urged US network providers and private companies to halt all dealings with the firms, essentially shutting them out of the US market.
But according to Reuters, anonymous sources said that after thoroughly investigating Huawei and ZTE with the help of intelligence agencies and nearly 1,000 telecoms buyers earlier this year, the separate White House investigation found no evidence that the companies were involved in espionage for the Chinese government.
This echoes claims made by Huawei, that it was not surprised by last week's ruling because the US investigation was already "committed to a predetermined outcome."
Huawei, whose chief executive officer, Ren Zhengfei, founded it 25 years ago, rejected the House report as unfair and inaccurate.
"Huawei is a $32 billion independent multinational that would not jeopardize its success or the integrity of its customers' networks for any government or third party. Ever", said Bill Plummer, the company's US spokesman.
ZTE also said that its equipment was safe, and when probed, insisted the Chinese government had never approached it to spy on the US.
"Let me answer emphatically. No! China's government has never made such a request. 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", said Zhu Jinyun, the company's senior VP for North America and Europe.
China's Commerce Ministry has called the accusations "groundless" and urged the US to co-operate with Chinese firms.
"As far as the report cited is concerned, it proves again that allegations against Huawei are unfounded," said Chinese Foreign Ministry spokesman Hong Lei, in response to today's findings.
Despite discovering no evidence of spying, the report did show major concerns over Huawei's poor programming that left its technologies open to hacking from government agents and third parties.
"I'd say it was five times easier to hack a Huawei router than in a Cisco one", said Felix Lindner, a leading expert in network equipment security.
Some in the US government believe the alleged poor security practices at Huawei could be a deliberate front for future espionage attacks.
According to Reuters, one anonymous computer scientist, who helped conduct classified US government research on Huawei routers found "back doors" that his team believed were inserted with care.
He said these back doors could enable attackers to install malicious software that would make critical government networks inoperable, allow hackers to gain entry into highly classified systems and enable them to spy on all traffic.
Similarly, Chris Johnson, a former CIA analyst on China said that it was right for the US to rule with "a general sense of foreboding" about what would happen if China asked Huawei or ZTE for assistance in gathering intelligence from US customers.
"If the Chinese government approached them, why would they say no, given their systems?" added Johnson.
The US condemnation of Huawei and ZTE has been met with mixed feelings among its closest allies.
Earlier this year, Australia barred Huawei from becoming a contractor on the country's National Broadband Network, and Canada said last week that Huawei could not bid to help build a secure national network invoking national security concerns.
However, last week the UK gave Huawei the green light to continue operating in the country after the government said it posed no security threats.