National security concerns about China using tech companies to spy on American networks is pressuring Huawei to exit the U.S. telecom market and House Intelligence Committee Chairman Mike Rogers, R-Mich., says that scrutiny may extend to Baidu if that China-based search engine chose to expand to America.
The dominant search engine in China has not announced plans to expand to the U.S., but the company has boomed in China with the growing use of browsing on tablets and mobile devices. Baidu founder Robin Li is valued at approximately $12.167 billion and became the richest man in China on Tuesday, according to the Bloomberg Billionaire Index, a mere 14 days after his wealth accelerated to make him China's second richest man on that index. All businesses in China must have a working relationship with the Chinese Communist Party. Google has limited its presence in China because of that government's practice of censoring and monitoring Internet activity.
China-based telecom Huawei is planning to "exit the U.S. market" following accusations from Rogers and his committee colleagues that the company is spying for China's military, Huawei CEO Ren Zhengfei told a French news outlet. When asked if any future expansion of Baidu in the U.S. would be face a similar investigation, Rogers says, "I won't say yes, I won't say no."
To guard Americans' data on a foreign-based search engine, Rogers says his committee is looking to the Committee on Foreign Investment in the United States, an interagency group led by the Treasury Department that reviews international investment in the U.S. for potential national security risks.
"We are working on some new CFIUS approaches so that we can account for information on companies that are seeking to do business in the United States when it comes to touching so much personal information," Rogers says. "If information rises to the level of concern we will absolutely take a look at it."
Along with controlling a 75 percent market share of China's Internet search traffic, the company has a presence in Japan, South Korea and Western Europe. The company plans to expand to Thailand, Indonesia, Brazil and Egypt, Baidu's Global Marketing Director Richard Lee told the Bangkok Post on Nov. 27.
As for Huawei, it is unclear what actions Zhengfei intended when he said "exit the U.S. market," but it likely signals that the company will no longer seek telecommunications deals on American networks, while it may continue selling phones in the U.S. If Huawei wants to prove it can be trusted with telecommunications deals in the U.S. "they would have to completely separate themselves from the Chinese military and intelligence networks," Rogers says.
The Obama administration has also accused China's government of using hackers to steal secrets from American businesses to benefit China's private sector. In March Tom Donilon, national security adviser to the Obama administration, said in a speech "the international community cannot afford to tolerate such activity from any country" and that China's intelligence agencies should "establish acceptable norms of behavior."