Shanahan Sees Huawei as China’s Bid to ‘Steal’ Tech Control

(Bloomberg) -- The Pentagon views Huawei Technologies Co.'s 5G infrastructure efforts as part of a broader bid by China to “steal its way” into global dominance, Acting Defense Secretary Patrick Shanahan said in prepared remarks to Congress.

“Huawei exemplifies the Chinese Communist Party's systemic, organized, and state-driven approach to achieve global leadership in advanced technology,” Shanahan told a House Appropriations subcommittee on Wednesday. “China aims to steal its way to a China-controlled global technological infrastructure, including 5G.”

The U.S. has sought to persuade its allies to ban all Huawei products from next-generation 5G telecommunications networks, contending that components made by the Chinese company could be used for spying purposes. Officials with the Shenzhen-based company have repeatedly denied that they cooperate with Chinese government officials or intelligence services.

The comments came in Shanahan's first congressional appearance since being cleared last week by the Pentagon's inspector general of allegations he violated ethical standards by favoring former employer Boeing Co., where he was an executive before joining the Trump administration.

‘Irregular Warfare'

In his written comments, he said the Defense Department seeks to prioritize its $750 billion defense budget for research and development and investments in space and cyber security.

“This budget is critical for the continued execution of our strategy, and it reflects difficult – but necessary – decisions that align finite resources with our strategic priorities,” Shanahan said in prepared remarks to the House Appropriations Defense subcommittee on Wednesday. The priorities for national defense enables the Department of Defense to “maintain irregular warfare as a core competency,” he said.

Shanahan, who had been deputy to Defense Secretary Jim Mattis, took over as acting secretary after Mattis abruptly quit in December. Mattis stepped down in protest over President Donald Trump's vow to draw down U.S. troops in Syria. Trump has yet to say whether he intends to nominate Shanahan, already the longest acting defense secretary in U.S. history, as his permanent defense chief.

To contact the reporters on this story: Glen Carey in Washington at gcarey8@bloomberg.net;Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Joshua Gallu

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