A US government investigation into Chinese telecom giant Huawei on whether it transgressed sanctions by exporting US technology to embargoed countries, including Iran and North Korea, shows that the US has set barriers for Chinese enterprises to enter its market under the excuse of national security, analysts said.

The US Department of Commerce has demanded that Huawei hand over any information relating to exports to Cuba, Iran, North Korea, Sudan and Syria in the past five years as part of a US government investigation into export violations, The New York Times reported Thursday.

The report cited the administrative subpoena sent to Huawei's US headquarters in Dallas, Texas, saying that the Department of Commerce is requiring senior Huawei management to hand over any relevant evidence and testimony. The department is also collecting evidence on whether Huawei exported US technology to these countries indirectly, including via front or shell companies.

"This mainly comes down to political and security considerations, not trading issues,  because the US government always attaches great importance to national security in the telecom industries," He Weiwen, co-director of the China-US/EU Study Center at the China Association of International Trade, said Friday.

He said that it is difficult for Chinese enterprises in the communication sector to get a foothold in the US market as it is sensitive and closely related to national security. 

Huawei had not replied to a request for comment as of press time, but said in a statement sent to The New York Times that "It complies with laws in markets where it operates, including export controls imposed by the United Nations, the US and Europe."

The report noted that the probe does not mean that Huawei has been accused of any wrongdoing, since an administrative subpoena does not indicate a criminal investigation. The US commerce department declined to make any comments on the issue.

He said that the US government should provide concrete evidence if it concludes that Huawei has violated US export restrictions and the whole investigation should be conducted fairly and transparently.

The US government will restrict US high-tech firms from exporting some types of technology to Huawei if it proves that Huawei has exported US tech to these countries, said He, adding that this will be bad news for US firms since they "want to make profits by exporting technology."

Increased competition

Observers said that the investigation shows the intensity of Sino-US competition in global communication markets and major enterprises have become embroiled in a contest relating to national security.

"This Huawei incident is not the only case. Other telecom equipment providers such as China's ZTE have undergone a similar investigation by US authorities who used the excuse of national security," said Wang Yanhui, secretary-general of the industry association Mobile China Alliance.

The US Department of Commerce placed export restrictions on China's smartphone maker ZTE in early March, saying it had violated US export controls on Iran. This made it difficult for ZTE to acquire US components since its US suppliers have to apply for an export license if they want to sell US-made equipment or components to ZTE, Reuters reported.

"These investigations usually don't end up with strict business restrictions in the US even if there have been violations. They may risk a trade war which is bad for both countries," Wang said, noting that fines and short-term restrictions are common.