US bans China Telecom over national security concerns

The United States
government announced a ban on China Telecom on Wednesday citing “significant”
national security concerns. The Federal Communications Commission (FCC) ordered
China Telecom Americas to discontinue operating within 60 days, thereby
bringing an end to two-decade-long operations of the Chinese state-owned
telecommunications company in the United States.

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The move to ban China
Telecom comes as US President Joe Biden takes an increasingly strict position
against Beijing over issues in Taiwan, Hong Kong, as well as issues surrounding
trade and technology.

According to the
FCC, China Telecom’s ownership and control by the Chinese government raises
significant law enforcement risks as it allows opportunities for Beijing to
access, store, disrupt and/or misroute US communications, which “in turn allows
them to engage in espionage and other harmful activities against the United
States”.

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The announcement
banning China Telecom from operating the US came hours after Chinese Vice
Premier Liu He and US Treasury Secretary Janet Yellen held discussions on “pragmatic,
candid and constructive” potential for trade be the two nations.    

“The FCC’s
decision is disappointing. We plan to pursue all available options while continuing
to serve our customers,” China Telecom spokesperson Ge Yu told Bloomberg news
over email.

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The ban on China
Telecom has aggravated concerns about Chinese tech companies whose shares have
plummeted on the New York stock exchange. China Telecom is China’s largest
fixed-line operator and its shares had jumped by 20% in August when it debuted
in Shanghai. However, the company was delisted from the New York stock exchange
earlier, in January.

The move to outlaw
China Telecom’s operations in the United States did not, however, come by
surprise. In April last year, the United States Justice Department had threatened
to terminate China Telecom’s dealings in the country after US government
agencies “identified substantial and unacceptable national security and law
enforcement risks associated with China Telecom’s operations.”