EDITORS NOTE: THIS EDIT CONTAINS CONVERTED 4:3 MATERIAL China's top telecom gear makers' dreams of U.S. expansion - now in a tailspin. After a congressional report urged blocking Huawei and ZTE from the market on security concerns. Ironically Huawei itself had pushed for a U.S. investigation to clear its name -- but its show of confidence backfired, says former Washington insider Enzio von Pfiel. (SOUNDBITE) (English) INDEPENDENT ECONOMIST AND STRATEGIST, ENZIO VON PFIEL, SAYING: "The American advisers to ZTE and to Huawei know that China is always raw issue just before elections so how on earth they could have told these two Chinese companies to go for it now, escapes any political belief and any political reality on Capitol Hill." U.S. politicians are eager to appear tough on China as elections loom. Just last month U.S. President Barack Obama put the brakes on a Chinese wind farm project, and launched a complaint alleging Beijing is unfairly subsidising its auto sector. (SOUNDBITE) (English) REUTERS REPORTER, TESSA DUNLOP, SAYING: "The report's findings could further damage already shaky Sino-U.S. relations. China has reacted angrily, saying it could undermine cooperation between the two countries." (SOUNDBITE) (English) INDEPENDENT ECONOMIST AND STRATEGIST, ENZIO VON PFIEL, SAYING; "It's what we call host country protectionism, which goes to say that the host, America, is going to turn increasingly leery of China's direct investments in America, and I think that's going to then start ricocheting back into U.S. direct investments, how they are treated in China." The companies have dismissed the report's accusations - and warned they may cost American jobs. And they might have a point. Despite all the political posturing, Chinese foreign direct investment in the States has skyrocketed this year -albeit from a low base. Research firm Rhodium Group says Chinese owned firms in the U.S. have created tens of thousands of American jobs over the past decade, and could generate up to 400,000 by 2020 if Chinese investment remains on track. As U.S. election campaigning ramps up, the rhetoric is heated. This latest twist shows just how delicate bilateral relations have become -- and could nip China's push to invest in U.S. markets in the bud.