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MILPLEX
China's Huawei drops US tech firm deal

by Staff Writers
Shanghai (AFP) Feb 21, 2011
Chinese telecom giant Huawei said it has taken the "difficult decision" to abandon its acquisition of US computer firm 3Leaf Systems, after a US panel voiced security concerns about the deal.

Huawei made the U-turn only days after saying it would not bow to a request from the Committee on Foreign Investment in the United States (CFIUS) to go back on the $2 million deal and leaving the decision to President Barack Obama.

The Chinese firm said it had changed its mind due to US lawmakers' concerns over the security implications of the deal, accusing it of having links to the Chinese army and Taliban.

"This was a difficult decision, however we have decided to accept the recommendation of CFIUS to withdraw our application to acquire specific assets of 3Leaf," Huawei said in a statement Saturday.

"Huawei will remain committed to long-term investment in the United States. The significant impact and attention that this transaction has caused were not what we intended. Rather, our intention was to go through all the procedures to reveal the truth about Huawei," it said.

Huawei said last week ago that its image and reputation would be damaged if it complied with the US committee's request and sold patents it obtained from 3Leaf Systems.

If the Chinese firm had opted not to back down, it would have meant Obama himself would have had to decide whether the firm needed to divest from the US computer firm.

Huawei, founded 23 years ago by Ren Zhengfei, a former People's Liberation Army engineer, is at the forefront of efforts by Chinese firms to shift from being the world's workshop to becoming creators of genuine global brands.

Its consumer products include smartphones that run on Google's Android platform and technology to connect laptops to the Internet using 3G networks.

Huawei's technology is also used to build mobile phone networks around the world. It has reportedly offered to install for free a network worth 50 million pounds on the London Underground train system in time for the 2012 Olympics.

Huawei has long rejected claims that it has ties to the Chinese military. It says it is owned by its employees and that Ren, its chief executive, has less than a two percent stake in the company.

However, in a letter to US Commerce Secretary Gary Locke and Treasury Secretary Timothy Geithner, a group of top lawmakers accused Huawei of having "ties with the People's Liberation Army, the Taliban, and the Iranian Revolutionary Guard."

3Leaf makes software that allows computer resources to be reallocated according to a user's needs across a computer network.



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MILPLEX
Global arms sales passed $400 billion in 2009: think tank
Stockholm (AFP) Feb 21, 2011
The world's 100 largest arms dealers, excluding Chinese vendors, sold weapons for $401 billion in 2009, with US vendors remaining in first place, according to a report published Monday. "Despite the continuing global economic recession in 2009, the total arms sales of ... 100 of the world's largest arms-producing companies increased by $14.8 billion from 2008," the Stockholm International Pe ... read more







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