Both the Chinese firms have rejected relations with the Chinese government
The US House of Representatives' Intelligence Committee has said that China based telecom firms including Huawei and ZTE should be barred from doing business in US market as they pose a security threat to the country.
AFP reported citing the committee's draft document as saying that the two firms "cannot be trusted" to be free of influence from Beijing and could be used to weaken US security.
"Based on available classified and unclassified information, Huawei and ZTE cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems," the draft document reported.
Allowing Huawei to establish its presence in the US' telecommunications infrastructure would allow the government of China to keep a secret eye on the US government and employ in industrial spying, the investigation revealed.
Both the Chinese firms have rejected relations with the Chinese government.
Huawei vice president William Plummer said in an emailed statement that the integrity and independence of Huawei's organisation and business practices are trusted and respected across almost 150 markets.
"Purporting that Huawei is somehow uniquely vulnerable to cyber mischief ignores technical and commercial realities, recklessly threatens American jobs and innovation, does nothing to protect national security, and should be exposed as dangerous politicaldistractions," Plummer said.
The committee also reported that both the firms have not provided required responses to queries put on by lawmakers regarding their links with the Chinese government.
"China has the means, opportunity and motive to use telecommunications companies for malicious purposes," the report said.
In response to the report, the panel said that US authorities must block acquisitions, takeovers or mergers involving Huawei and ZTE given the threat to US national security interests.
"The US should even consider extending the authority of a super-secret panel that reviews foreign acquisitions to include purchasing agreements," the panel said.