Huawei
Huawei

The US government is trying to persuade wireless and internet providers in allied countries to avoid telecommunications equipment from China’s Huawei Technologies, the Wall Street Journal reported on Thursday.

The move would further pile pressure on the world’s biggest telecom gear maker, which is under scrutiny from Western intelligence agencies for its perceived ties to China’s government and the possibility its equipment could be used for espionage.

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US officials have reached out to their government counterparts and telecom executives in friendly countries where Huawei equipment is already in wide use about what they see as cybersecurity risks, according to the WSJ report, which cited unnamed people familiar with the situation.

The United States has already largely barred Huawei from supplying its government and contractors, while Australia has banned the company from supplying equipment for a 5G mobile network.

Huawei, which has repeatedly denied engaging in intelligence work for any government, is one of several Chinese tech companies that have come under US government scrutiny as a trade war between the two countries escalates.

On Friday, the Hong Kong shares of rival ZTE Corp (0763.HK) fell as much as 5.6 percent, dragging down the sector. They recouped some losses to trade down 2 percent around midday, while the firm’s Shenzhen shares (000063.SZ) were down 3 percent.

ZTE’s value has nearly halved this year, battered by a three-month U.S. government ban on American firms selling parts to the firm, and a subsequent $1.4 billion settlement.

On Friday, an index tracking major telecoms firms on the mainland .CSI000994 dropped more than 3 percent.