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Huawei to invest $2B in U.K. amid ongoing 'spying' claims

While the U.S. Congress warms up a probe of its ties to the Chinese government, Huawei agrees to lavish the U.K. with cash, to general acclamation.

British PM David Cameron meets Huawei CEO Ren Zhengfei at Downing Street, London Huawei

Chinese telecom giant Huawei has pledged to invest $2 billion (£1.3 billion) in the U.K. economy, in an apparent bid for goodwill as the U.S. Congress opens a probe of the company's relationship with the Chinese government. (See the embedded press release below.)

Huawei will plow $1 billion (£650m) into its U.K. research and development efforts. It said  that will generate more than 700 jobs in the country, and pledged to spend a further $1 billion on U.K. procurement over the next five years.

The telecom giant, which already employs 800 people in the U.K., said it wants to nearly double its employee base by 2017 by investing in a number of "global centers of technical and financial excellence in the U.K."

Huawei today also jumped on the British 4G bandwagon. The newly rechristened wireless carrier EE (yes, that's it's new name) this morning announcedthe Huawei Ascend P1 LTE as one of the devices launching on its next-generation LTE network.

British Prime Minister David Cameron welcomed Huawei founder and chief executive Ren Zhengfei to Downing Street to discuss the investment. In the news release, Cameron said the U.K. is "open for business." He added:

The British Government values the important relationship with China, both countries have much to offer each other and the business environment we are creating in the UK allows us to maximize this potential.

But across the Atlantic, Huawei is far from being friends with the government. The company remains on the fringes in the U.S. over its alleged ties with Beijing, and founder Ren's background as a former engineer in the Chinese military.

The U.S. House Permanent Select Committee on Intelligence will later this week hold an open hearing as part of an ongoing investigation into "the national security threats posed by Chinese telecom companies doing business in the United States."

Huawei and rival firm ZTE were both issued letters warning of the U.S. government's concerns over their alleged ties to the Chinese regime.

Also in Australia, the Huawei was banned from bidding on contracts for the country's National Broadband Network over fears that the company's devices may include backdoors that could allow foreign governments to commit espionage.

The firm this week released a report -- penned by Huawei's global security officer John Suffolk, the former chief information officer for the U.K. government -- in effect claiming that its employees are not "Chinese spies."

In the report, Huawei dismissed claims that the firm was under the thumb of the Chinese government:

...we have never damaged any nation or had the intent to steal any national intelligence, enterprise secrets, or breach personal privacy and we will never support or tolerate such activities, nor will we support any entity from any country who may wish us to undertake an activity that would be deemed illegal in any country

In the U.K., however, Huawei remains a business partner with British Telecom (BT) and other major Internet providers, securing its place in the country as a vital part of the U.K.'s national infrastructure.