US China Trade War: China Condemns US Plan to Push Telcos Out

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In another turn in the US China Trade War, China’s government on Thursday called on Washington to drop efforts to expel three state-owned Chinese phone companies from the United States. The FCC, or Federal Communications Commission voted Wednesday to begin revoking the companies’ U.S. licenses. It said they are security risks controlled by the communist Beijing government.

The Chinese foreign ministry has accused US of damaging China’s commercial potential. Incidentally, this came as U.S. and Chinese envoys were flying to Alaska for the highest-level face-to-face meeting between the two sides since Biden took office in January.

US China Trade War: Roots in Telecom

The decision adds to mounting US China Trade War and the conflict over the ruling Communist Party’s industrial plans. These plans include access to American technology. Moreover, Washington have accused Beijing of computer attacks and theft of business secrets on multiple occasions. President Biden publicly stated that he wants better relations with China. But, so far there is no indication that Biden will roll back the sanctions already in place since Trump’s tenure. The said sanctions limit Chinese access to US Tech and market. Also, Trump issued an order which forbids Americans from investing in securities of Chinese companies. These companies were deemed to be linked to China’s military by the Pentagon.

Incidentally, Huawei was arguably the most talked about ban by the US. The Chinese telco giant is the top maker of telecom equipment, leading the market since 2019. Earlier, state-owned China Mobile Ltd. was blocked in 2019 from entering the American market on security grounds. The continued friction has blown up into a full-scale trade war with bans and sanctions flying around on both ends.

China’s Comments on the Plan

Zhao Lijian, a spokesperson with the Chinese Foreign Ministry, slammed the announcement. He said that Washington should “stop the wrong practice of generalizing the concept of national security and politicizing economic issues”.  Also, he said that the US should “stop abusing state power to unreasonably suppress Chinese enterprises”.

Zhao said Beijing will “take necessary measures to safeguard the legitimate rights and interests of Chinese enterprises”. However, the spokesperson gave no details on that. Incidentally, warnings have been issued previously as well but there has been no concrete action.

The latest target is China Unicom Americas, a unit of China Unicom Ltd.; Pacific Networks Corp. and ComNet (USA) LLC, a unit of Pacific Networks. The telco deals in international data and voice.

Commissioner Brendan Carr stated that the telcos were ordered to explain their ownership and method of operations. However, these companies “failed to address the serious national security threats posed by their continued operation in the US”. Furthermore, he added that even though some Chinese operators have been in the US for decades, however, he noted that “security threats have evolved substantially in the intervening years”.

This is yet another turn of things in the US China Trade War and the outcome will definitely have a global impact.