From: NYT

By NICOLE PERLROTH and JOHN MARKOFF

SAN FRANCISCO — Less than four years after Huawei Technologies and Symantec teamed up to develop computer network security products, the joint venture is being dismantled because Symantec feared the alliance with the Chinese company would prevent it from obtaining United States government classified information about cyberthreats.

According to two people briefed on the deal, Symantec’s decision was a pre-emptive political maneuver timed to coincide with the United States government’s efforts to share more classified cyberthreat information with the private sector. People with knowledge of the venture, who would speak only on condition of anonymity because they were not authorized to speak, said Huawei had already laid off several workers in Huawei Symantec’s Silicon Valley offices this month and planned to move its entire operation out of the United States, largely because of increased American government oversight.

In the next two weeks, Symantec, the Mountain View, Calif., computer security software firm, is expected to sell its 49 percent stake in the venture to Huawei for $530 million. The companies first announced the sale last November. In a news release, Enrique Salem, Symantec’s chief executive, said the project had “achieved the objectives we set four years ago” and would “exit the joint venture with a good return on our investment.”

As online espionage proliferates, the United States government has grappled with how best to share its classified cyberthreat intelligence with the private sector. In January, the Pentagon transferred an information-sharing pilot program, called the Joint Cybersecurity Services Pilot, to the Department of Homeland Security. The program was originally intended to share classified National Security Agency intelligence with military contractors. Homeland Security is expected to extend the program beyond those companies to antivirus companies, like Symantec, and network providers.

Symantec worried that its ties to Huawei would be a disadvantage when it came to being the recipient of classified threat information, according to the two people briefed on the matter. Cris Paden, a Symantec spokesman, declined to comment.

William Plummer, a Huawei spokesman, said that from Huawei’s perspective “both companies had a positive experience with the joint venture.” He added, “We are going to streamline the organization market by market including in the U.S.”

National security concerns have long dogged Huawei. Ren Zhengfei, Huawei’s founder and chief executive, is a former officer in China’s People’s Liberation Army, and American government officials and regulators have repeatedly raised concerns about Huawei’s close ties to the Chinese government.

In 2008, Huawei was forced to abandon a bid for 3Com, which makes antihacking computer software for the United States military, among other products, after an American government panel raised questions about the national security risks. In 2010, Huawei lost a bid to supply mobile telecom equipment to Sprint Nextel after lawmakers expressed similar concerns.