A United States congressional committee has called for two Chinese telecoms equipment giants to be banned from the American market.
A draft of a report by the House Intelligence Committee says Huawei and ZTE cannot be trusted to be free of Chinese state influence and so pose a security threat to the US and its systems, the BBC reports.
Huawei and ZTE make equipment used in data networks, as well as mobile phones, and were hoping to get a foothold in the lucrative American market.
But the report says that the companies could be used by the Chinese government for "malicious purposes".
Committee chairman Mike Rogers told US television's 60 Minutes that the American government and US companies should avoid doing business with Huawei and ZTE.
A US executive from Huawei testified to the committee that the business is globally trusted and respected.
Both Huawei and ZTE deny being influenced by the Chinese government or that they pose a threat to cyber-security.
Huawei provides equipment to help upgrade New Zealand's ultra-fast broadband network.
Auckland company Rakon also signed an agreement in August this year to supply Huawei with components.