Wall Street revokes expulsion of Chinese companies 0:59
Hong Kong (CNN Business) -
Washington has banned a major Chinese state-owned telecommunications company from operating in the United States on national security grounds, a move that threatens to again increase tensions between the world's two largest economies.
The US Federal Communications Commission (FCC) reported Tuesday that it ordered China Telecom to stop providing services in the country within 60 days, alleging that the company's US subsidiary "It is subject to the exploitation, influence and control of the Chinese government."
Furthermore, the company "is very likely to be forced to comply with requests from the Chinese government without sufficient legal procedures subject to independent judicial oversight."
The FCC action is the culmination of a long-standing dispute with China Telecom, which has operated in the United States for nearly two decades.
The agency said it gave the company an opportunity last December to rebut concerns about its presence in the United States, but that China Telecom has not.
China aims to reduce fossil energy use 1:02
China Telecom did not immediately respond to requests for comment from CNN Business.
A spokesman for the US affiliate told Reuters the FCC's decision was "disappointing."
advertising
"We plan to pursue all available options as we continue to serve our customers," the spokesperson said.
The antecedent with China Telecom
The main business of the company is in China.
It says it has about 370 million mobile phone customers.
China Telecom does not break down its customers by region.
Its US subsidiary was established in 2002 and the company claims that it serves companies and operators between the Americas and China.
It is not the first time that China Telecom has been the target of punitive action by the United States.
In January, the New York Stock Exchange said it would delist three Chinese telecommunications stocks - including China Telecom - to comply with a decree signed by then-President Donald Trump.
The order prohibited Americans from investing in companies that the US government suspects are owned or controlled by the Chinese military.
Since then, China Telecom has been delisted in the United States.
Hong Kong-listed shares tumbled 0.7% on Wednesday.
Washington has targeted other large Chinese firms with sanctions in recent years.
In 2019, Trump banned US companies from using telecommunications equipment from sources that the administration considers threats to national security, an order that directly affected the Chinese company Huawei, one of the world's leading providers of telecommunications equipment.
Huawei has long said that it is a private company that operates independently of the Chinese government, but the United States has accused the company of posing a threat to national security.
Biden vows to protect Taiwan and China warns of "wrong signals" about the island's independence
Doesn't change the relationship between the United States and China
Although President Joe Biden has taken a different tone with Beijing than his brash and outspoken predecessor, relations between the United States and China have not improved significantly.
In fact, tensions recently flared after Biden said the United States was pledging to come to Taiwan's defense if the autonomous island was attacked by China.
The statements appeared to contrast with the US policy of "strategic ambiguity" toward Taiwan, although the White House claimed there was no policy change.
The Chinese Foreign Ministry, however, warned hours after the remarks that the United States should not send "any wrong signal to the separatist forces of Taiwan's independence."
Although the Chinese Communist Party has never ruled Taiwan, Beijing views the island as an "inseparable part" of its territory and has repeatedly threatened to use force if necessary to prevent the island from formally declaring its independence.
China United States