The news at a glance

last updated 8 January 2015

Spying: U.S. says Chinese firms pose threat

U.S. lawmakers warned American companies this week not to do business with two of China’s leading technology firms because they pose a threat to national security, said Jim Wolf in Reuters.com. Huawei Technologies Co., the world’s second-biggest maker of telecommunications equipment, and ZTE Corp., a major mobile phone manufacturer, have close ties to the Chinese government, and their systems could be used to spy on Americans or steal corporate secrets, the House Intelligence Committee said. “China has the means, opportunity, and motive to use telecommunications companies for malicious purposes,” the congressional report said. Huawei called the report “an exercise in China-bashing.”

The allegations are sure to ratchet up trade tensions between the U.S. and China, said Dexter Roberts in Bloomberg Businessweek. Last month, the U.S. filed a complaint with the World Trade Organization claiming that China improperly subsidizes its auto industry, hurting U.S. manufacturers, and President Obama blocked a Chinese company from building wind turbines near a military facility in Oregon over security concerns. But while the congressional report will likely hamper Huawei’s and ZTE’s expansion efforts here, “don’t expect security concerns to derail fast-growing Chinese investment” in other sectors, such as energy, aviation, and real estate.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

A continent-wide natural gas glut has U.S. energy companies looking for foreign customers, said Daniel Gilbert and Tom Fowler in The Wall Street Journal. Booming production has pushed natural gas prices to their lowest level in a decade, so companies are looking to secure healthier profits by shipping gas to energy-hungry countries overseas, mostly in Asia. A $65 billion project to export gas from Alaska’s North Slope is moving ahead, and a dozen other proposed liquefied gas plants hope to get export approval. But those foreign sales might end up raising natural gas prices, hurting U.S. consumers and manufacturers.

Google is getting into the credit business, said Richard Waters and Barney Jopson in the Financial Times. The tech giant has begun allowing businesses to take out lines of credit of up to $100,000 to spend on Google advertising. The program launched this week in Britain and will be available in the U.S. within weeks. Interest rates for U.S. businesses will be set at a competitive 8.99 percent. Amazon also recently moved into financial services, offering development loans to merchants that sell products on the company’s site.

The euro zone launched its $650 billion bailout fund this week, said James Kanter in The New York Times. But while the European Stability Mechanism—or “bazooka,” as it’s nicknamed—is meant to help struggling countries by extending loans or buying government bonds, it’s being introduced “with most of its financial ammunition not yet loaded.” Because countries have been slow to provide start-up reserves, the fund will only have about $100 billion by 2014. That suggests that troubled countries like Spain may not get much help in the meantime.

Meg Whitman wants more time, said Michael Liedtke in the Associated Press. The CEO of Hewlett-Packard, “one of the world’s largest—and most dysfunctional—technology companies,” told analysts last week that though a major company revamp is underway, it could be 2015 before revenue grows again. “There are no silver bullets to solve our challenges,” Whitman said. She said the company expects to post lower revenues and profits through at least 2013. In August, HP reported the biggest quarterly loss—nearly $9 billion—in its 73-year history.

Explore More