China Communication Firms Subpoenaed by U.S. in Security Review

The U.S. Commerce Department issued subpoenas for multiple Chinese communications providers as part of a review into potential national-security risks.

The statement Wednesday from Commerce Secretary Gina Raimondo didn’t include names of companies affected. Commerce called the subpoenas an important step for collecting information to make a determination for possible action to protect the security of American companies and workers, and said that it hopes to work cooperatively with the companies in the review.

That may not be easy to achieve, according to Derek Scissors, a resident scholar at the American Enterprise Institute.

”If misappropriation or misuse of data was authorized by the Chinese government, it’s protected under China’s law guarding state secrets and companies will not cooperate with Commerce,” Scissors said. “ We’ve seen this movie before, for example in Chinese firms refusing to meet stock-listing disclosure requirements.”

The Biden team has said that it intends to go ahead with a Trump administration-proposed rule to secure the information-technology supply chain this month, giving Commerce broad authority to prohibit transactions involving “foreign adversaries.”

The interim rule, which will allow Commerce to monitor transactions of governments including China’s, was first proposed by the previous administration in January -- days before Joe Biden’s inauguration -- and follows an executive order former President Donald Trump signed in 2019. The department is accepting public comments on the plan through March 22, the same day it becomes effective.

The move comes a day before the first high-level meeting between the world’s two largest economies. Secretary of State Antony Blinken and National Security Adviser Jake Sullivan will sit down with their Chinese counterparts in Alaska tomorrow.

Biden administration officials have downplayed expectations for the meeting, saying it’s mainly an avenue to air grievances and gather input for the ongoing development of a broader China strategy. Technology and cyber issues will be on the agenda, officials said.

The U.S. in recent months has undertaken numerous initiatives designed to thwart the growing power of China’s technology companies because of national-security concerns. The U.S. Federal Communications Commission last week said in a notice that telecommunications and video-surveillance equipment made by five Chinese companies including Huawei Technologies Co. poses “an unacceptable risk to the national security” and shouldn’t be used.

The other companies listed by the FCC were ZTE Corp., Hytera Communications Corp., Hangzhou Hikvision Digital Technology Co. and Dahua Technology.

The FCC also today moved toward barring China Unicom (Hong Kong) Ltd. and ComNet from the U.S., calling the Chinese telecommunications carriers a security risk controlled by the Beijing government. In 2019, the FCC barred China Mobile Ltd. from the U.S. market over national-security concerns.

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