Global Economy

US threatens to block China Telecom from serving American market


The top departments of the US government have endorsed cutting off Beijing-controlled China Telecom from serving the US market because of legal and security risks, the Justice Department announced on Thursday. The departments, including Defense, State, and Homeland Security, said after a broad review that the Federal Communications Commission should “revoke and terminate” all authorizations for the Chinese giant’s US subsidiary, China Telecom (Americas), to provide international telecommunications services to and from the United States.

“The Executive Branch agencies identified substantial and unacceptable national security and law enforcement risks associated with China Telecom’s operations, which render the FCC authorizations inconsistent with the public interest,” the Justice Department said in a statement.

The agencies — which also included the Justice Department, the Commerce Department, the US Trade Representative and US counter-intelligence — said China Telecom is vulnerable to “exploitation, influence and control” by the Chinese government. They said it has inaccurately reported to US authorities where it stores its US records and how it manages cyber security.

The agencies also made the recommendation based on “the nature of China Telecom’s US operations,” which they said allow Chinese government actors “to engage in malicious cyber activity enabling economic espionage and disruption and misrouting of US communications.”

The recommendation has to be decided upon by the FCC, but will almost certainly involve the White House, where it could be weighed amid ongoing trade negotiations with Beijing.

It came just five days after President Donald Trump‘s administration formed an interdepartmental body to formally review national security concerns related to foreign telecommunications companies involved in the United States.

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In September 2019 two senators, Democrat Chuck Schumer and Republican Tom Cotton, asked the FCC to consider banning China Telecom and another company, China Unicom, from the US market over national security concerns.





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