Huawei, ZTE cut lobbying spending but find other ways to spread influence

WASHINGTON (Reuters) - Chinese telecommunications equipment companies Huawei [HWT.UL] and ZTE, which face strong political headwinds in the United States, sharply cut lobbying expenditures last year, according to fourth-quarter spending disclosures.

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Despite the cuts, Huawei in particular has continued to sponsor telecom conferences and spread money around in other ways they are not required to disclose.

Huawei Technology Cos Ltd spent $50,000 in 2017, down from $348,500 in 2016 and the $1.2 million it spent in 2012, the same year it first registered that it was lobbying, according to its spending disclosure made on Friday to the U.S. Senate.

Huawei, which makes handsets and networking equipment, and handset maker ZTE Corp have been struggling to sell more of their products in the United States but have run into criticism that their presence in the U.S. telecom network would raise national security concerns.

Both are named in legislation that would bar any U.S. company that uses their technology from bidding on American government contracts. [nL1N1PB08Q]

ZTE’s reduction in lobbying expenditures was not quite as sharp as Huawei’s. The company spent $90,000 for the fourth quarter of 2017, the same as the second and third quarters but sharply down from the $240,000 spent in the first quarter, according to its filing. It spent $130,000 to $250,000 every quarter from 2014 to late 2015.

Given the bad press that Russia and China are getting, it makes sense for Huawei and ZTE to bide their time, said Larry Sabato, a political scientist at the University of Virginia.

“I think they made a rational decision not to waste their money,” said Sabato. “This is not a good time for any foreign company to make an argument for entry when national security experts disagree.”

Huawei has continued to spend money wooing potential customers around the world, for example sponsoring two Norwegian sports teams and providing equipment for the 2018 Winter Olympics in South Korea.

In the United States this year, Huawei is a top sponsor of the NFV & Carrier SDN conference in Colorado in September for wireless, internet and data companies.

It is also a top sponsor of the Open Source Convention in Oregon in July, a Big Communications Event in Austin in May and an RSA Conference on network security in San Francisco in April, according to websites for the conferences.

Reporting by Diane Bartz; Editing by Jonathan Oatis