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US expels China Telecom unit out of market over national security concerns

The FCC cited the danger that Beijing might use the firm to eavesdrop or disrupt US communications.

The logo for Chinese telecommunications firm China Telecom
The logo for Chinese telecommunications firm China Telecom
Image: Mark Schiefelbein via PA Images

US REGULATORS ARE expelling a unit of China Telecom, one of the country’s three major state-owned carriers, from the American market as a national security threat amid rising tension with Beijing.

China Telecom (Americas) is required to stop providing domestic interstate and international service in the United States within 60 days, under an order approved by the Federal Communications Commission (FCC).

The FCC cited the danger that Beijing might use the company to eavesdrop or disrupt US communications and “engage in espionage and other harmful activities against the United States”.

The Biden administration has extended efforts begun under then-president Donald Trump to limit access to US technology and markets for state-owned Chinese companies due to concern they were security risks or helping with military development.

China Telecom is among companies that were expelled from US stock exchanges under an order by Trump barring Americans from investing in them.

The FCC said in 2019 that due to security concerns it planned to revoke licences granted two decades earlier to China Telecom and another state-owned carrier, China Unicom.

It rejected a licence application by the third carrier, China Mobile.

“China Telecom Americas’ ownership and control by the Chinese government raise significant national security and law enforcement risks,” said an FCC announcement.

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The company’s conduct and communications to US government agencies “demonstrate a lack of candour, trustworthiness and reliability”, the FCC said, without giving details.

The Chinese government has said it would take steps to protect its companies but has yet to announce any retaliation over their status in the US market.

The telecom companies are on a US government blacklist of entities deemed by the Pentagon to be involved in military development.

Others include state-owned oil companies, suppliers of processor chips and video technology and construction, aerospace, rocketry, shipbuilding and nuclear power equipment companies.

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