US senators have aired concerns over a deal between technology company Huawei and South Korea over improvements to the Asian nation's broadband infrastructure.
The senators have written to the administration led by US president Barack Obama to warn him that it could pose a security risk.
Ren Zhengfei, the founder of the company, is a former member of the People's Liberation Army. However, Huawei stresses that the vast majority of the firm is owned by its employees.
Senators Robert Menendez of New Jersey and Dianne Feinstein of California said the deal between South Korea and Huawei to "develop and/or supply the Republic of Korea's advanced LTE telecommunications backbone raise[s] serious questions and potential security concerns".
"Maintaining the integrity of telecommunications infrastructure is critical to the operational effectiveness of this important security alliance," they added.
The share price of Huawei rose by around one per cent during trading on the Shenzhen market today, with investors unconcerned about the letter from the two senators to Mr Obama.
Learn about the Asian markets and CFD trading at City Index
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.