Chinese communications firms in the US face more pressure under Biden administration

Jodi Xu Klein
·3-min read

Chinese communications firms operating in the US came under more pressure on two fronts on Wednesday in decisions by the new administration of President Joe Biden, showing a continuation in Washington of hard-line policies that began under former president Donald Trump.

The US Commerce Department announced that it had served subpoenas on “multiple Chinese companies that provide information and communications technology and services (ICTS) in the United States”, without specifying which were targeted.

The move, announced by Commerce Secretary Gina Raimondo, was pursuant to an executive order signed by Trump called “Securing the Information and Communications Technology and Services Supply Chain”, for which Commerce Department issued implementing rules in January.

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“The unrestricted use of untrusted ICTS poses a national security risk,” said Raimondo. “Beijing has engaged in conduct that blunts our technological edge and threatens our alliances.”

US Vice-President Kamala Harris holds a ceremonial swearing-in for Commerce Secretary Gina Raimondo as Senator Jack Reed holds the Bible, at the White House in Washington on March 3, 2021. Photo: Reuters
US Vice-President Kamala Harris holds a ceremonial swearing-in for Commerce Secretary Gina Raimondo as Senator Jack Reed holds the Bible, at the White House in Washington on March 3, 2021. Photo: Reuters

“The administration is firmly committed to taking a whole-of-government approach to ensure that untrusted companies cannot misappropriate and misuse data and ensuring that US technology does not support China’s or other actors’ malign activities,” she said.

Under the new rules, information collected through the subpoena process will help the Commerce Department make an initial determination about whether transactions with the firms present a national security risk. The companies being investigated will be given a chance to respond to the conclusion.

Also on Wednesday, the US Federal Communications Commission (FCC) voted unanimously to continue efforts to revoke China Unicom (Americas) and ComNet’s operating licences, saying the telecoms carriers posed a national security threat.

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The FCC said the material provided to show the carriers’ independence from the Chinese government was insufficient. The commissioners – whose vote was 4-0 – granted an unspecified amount of time for additional evidence to be submitted.

China Unicom (Americas) is a unit of one of China’s three major telecommunications operators, and ComNet is a subsidiary of Pacific Networks.

Jessica Rosenworcel is acting chair of the US Federal Communications Commission. Photo: Reuters
Jessica Rosenworcel is acting chair of the US Federal Communications Commission. Photo: Reuters

Last April, the FCC asked them to prove their independence from Beijing or face a proceeding that could result in expulsion from the US market. Wednesday’s vote began that process.

The move came as the Biden administration, following its predecessor’s tough stance, continues to crack down on Chinese tech and telecoms firms. In 2019, the FCC cited national security concerns in denying China Mobile’s licence application to operate in the US.

“These companies are indirectly owned and controlled by the Chinese government,” said Jessica Rosenworcel, acting FCC chairwoman. “As a result, there is strong reason to believe that they will have to comply with requests from the Chinese government and advance its goals and policies.”

China Unicom (Americas) has operated in the US for more than 20 years and provides international telecommunications to and from the US.

Responding to Wednesday’s FCC vote, the company said that it was “a distinct, separate legal entity” and has complied with US laws throughout its decades-long presence in the US market.

Pacific Networks did not respond to a request for comment.

The FCC, which has been pressured by the Justice Department and other federal agencies to look into Chinese telecoms firms, opened a similar proceeding in December to revoke the authorisation for China Telecom, the largest Chinese telecoms company.

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