MIT cuts ties with Chinese tech firms Huawei and ZTE

Massachusetts Institute of Technology is ending its funding ties with Chinese telecoms equipment makers Huawei and ZTE, citing the risks that such arrangements might cause in the light of US federal investigations of the two companies.

MIT is the latest top U.S. education institution to unplug telecom equipment made by Huawei and other Chinese companies to avoid losing federal funding.

"MIT is not accepting new engagements or renewing existing ones with Huawei and ZTE or their respective subsidiaries due to federal investigations regarding violations of sanction restrictions," Maria Zuber, it's vice president for research, said in a letter on its website.

Collaborations with China, Russia, and Saudi Arabia would face additional administrative review procedures, Zuber added.

"The institute will revisit collaborations with these entities as circumstances dictate," she said.

Britain's Oxford University stopped accepting funding from Huawei this year.

MIT’s move is part of a broader effort to strengthen its vetting of research partners, which may affect relationships with other entities in mainland China, Hong Kong, Russia, and Saudi Arabia.

A Huawei spokesman said: “We're disappointed by MIT's decision, but we understand the pressure they're under at the moment.

“We believe that scientific research is carried out for the benefit of all mankind, and should be free from the influence of geopolitics. Huawei denies the allegations of the US government, and we trust the US judicial system will ultimately reach the right conclusion.”

MIT is cited in a 2017 Huawei presentation as a collaborator in the Huawei Innovation Research Programme (HIRP), which the company called a global initiative “to identify and support world-class, full-time faculty members pursuing innovation of mutual interest”.

Meng Wanzhou, chief financial officer of Huawei and the daughter of its founder Ren Zhengfei, was arrested in Canada in December at the request of the United States on charges of bank and wire fraud in violation of U.S. sanctions against Iran.

She denies wrongdoing.

U.S. sanctions forced ZTE to stop most business between April and July last year after Commerce Department officials had said it broke a pact and was caught illegally shipping U.S.-origin goods to Iran and North Korea. The sanctions were lifted after ZTE paid $1.4 billion in penalties.

In Beijing, the Foreign Ministry referred questions to the two companies but said Chinese firms were required to abide by international rules and local laws.

“At the same time, we ask that governments in countries where they are based provide a just, fair, and nondiscriminatory environment,” spokesman Geng Shuang said.