The drama surrounding the proposed minority equity purchase in 3Com by Huawei has yet to be played out, so I have thus far held off on any significant posts. However, the rhetoric has certainly picked up recently, so maybe some preliminary comments are now in order.

The latest theatrics come courtesy of the U.S. House of Representatives, as described by the FT:

The proposed takeover of 3Com by Bain, the private equity firm, and Huawei, the Chinese telecommunications equipment maker, came under further pressure in Washington after lawmakers called on the administration to block the acquisition of the US technology group.

A non-binding resolution introduced by Ileana Ros ­Lehtinen, the most senior Republican on the House foreign affairs committee, said the transaction in its current form threatened national security and should not be approved by the inter-agency panel that investigates foreign transactions. Under the terms of the $2.2bn deal, Huawei will take a minority stake in 3Com.

If everyone wishes to follow U.S. law (great idea, that), this deal should go before CFIUS (the committee that reviews foreign investment deals from a security standpoint), but isn't it nice that Rep. Ros Lehtinen and her co-sponsors are such experts that we can simply take their word for it and block the deal without any debate? How efficient, a real time saver.

By the way, the House Resolution (H. Res. 730) has some lovely statements that are not backed up by any evidence whatsoever. Here are some choice bits:

. . . since 2001, Huawei has actively sought entry into international markets, reportedly using government subsidies to support aggressive pricing needed to help capture market share.

Note the use of the word "reportedly," which absolves the sponsor/co-sponsors from having to prove the accuracy of the statement. As long as they attach a news article that includes a particular allegation, that's enough. Here's another one:

. . . the ownership structure of Huawei, including possible links to the Government of the People's Republic of China, including the People's Liberation Army, is so opaque that the company has been described as `one of the least transparent in China'.

Excellent stuff. Insinuating that Huawei is in the pocket of the PLA, the Resolution cites news articles alleging that the PLA was responsible for cyberattacks against Pentagon computer networks. Through the magic of association, Huawei is now responsible for hacking into U.S. government networks. Neat how that works, hmm?

My favorite bit of fear mongering, however, comes from one of the Resolution's co-sponsors, Thad McCotter from Michigan's 11th Congressional District. His Op/Ed on the subject shows what a reactionary nutjob he is:

CFIUS must end this trend. If not, CFIUS will place in communist China's cyber-hacking hands some of our most sensitive high-tech defense technologies; Jiang Zemin's cynical strategy of "intimidate with force, seduce with money" will be furthered; and, just as with the dismantling of our Arsenal of Democracy, America will once more be buying from the communist Chinese the rope they use to hang us.

Yikes. Miss the Cold War much? Note that although I make light of this dork's stupid comments, he is a member of the U.S. House of Representatives and is the voice of hundreds of thousands of American voters. This is downright scary – McCotter is also the author of this gem on China's support of Myanmar – he opens the article with a description of events in Beijing in 1989, I guess just for fun since it isn't relevant to anything:

Beneath the shadow of a rickety statute, the amazed gaze of the world, and the calculating eyes of the tyrants, the enslaved staked their claim to liberty. Off the town’s walls, thousands of voices echoed in their native tongue the ideals which fired the souls of our ancestors to fight for freedom. But unlike our revolutionaries, these unarmed freedom-seekers, flush with a euphoria born of novel hope, trusted only in the good faith of humanity, especially the Great Democracies, to protect them from the iron retaliation of a bankrupt regime teetering on the brink of extinction…and bent upon survival. The slaves’ faith perished beneath their masters’ tanks.

Not only is this really awful prose, but such fantastical melodrama coming from an elected member of the government? Embarrassing, particularly to the people in Michigan who elected him. This guy probably needs both hands to wipe his ass.

I so look forward to the serious, rational debate on the 3Com deal. I mentioned in a post last week that as the U.S.-China dialogue becomes more poisonous over the next 13 months (until the U.S. presidential election), the bloggable stories will come at us fast and furious. Oh joy!