Beijing warns Washington against US probe in Huawei trade with Iran

This file picture taken on August 3, 2015 shows a mobile phone made by Chinese telecom equipment maker Huawei displayed in a store in Beijing. (Photo by AFP)

China warned the United States on Thursday against harming trade after a report that US authorities had opened an investigation into suspected violations of Iran sanctions by China's Huawei Technologies.

A US Justice Department probe would come on the back of subpoenas issued to the company by the US Commerce and Treasury Departments over sanctions-related issues, according to the Wall Street Journal.

Huawei -- one of the world's largest telecommunications equipment and services providers -- has been under tough scrutiny in the United States, where government national security officials say that its alleged close links to the Chinese government make it a security risk.

Its US business has been tightly constrained by worries it could undermine US competitors and that its cellphones and networking equipment, used widely in other countries, could provide Beijing with avenues for espionage.

The Journal report gave no details about the investigation. The New York Times has reported that the company has been subpoenaed by the Commerce and Treasury Departments over alleged violations of Iran and North Korea sanctions.

Huawei would not comment on the Journal report.

"Huawei complies with all applicable laws and regulations where it operates, including the applicable export control and sanction laws and regulations of the UN, US and EU," spokesman Charles Zinkowski said in a statement.

Chinese Foreign Ministry spokeswoman Hua Chunying said she had seen the report.

"We hope that the US doesn't take any further steps to damage confidence in the American business environment," Hua said at a regular press briefing.

Hua added that China hopes "the US doesn't do things that damage its domestic economy and the normal, transparent, mutually beneficial development of international trade."

Signaling the rising unease in the United States towards Huawei and fellow Chinese telecoms group ZTE Corp, last month the Federal Communications Commission proposed a new rule that would restrict small telecoms carriers from purchasing "equipment or services from companies that pose a national security threat."

Major US telecoms companies have already steered clear of the two Chinese firms, sometimes on the strong suggestions of US officials.

The cases come as the United States and China are gearing up for a potential trade war, with the high-tech sector among the concerns for both sides.