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The US government is investigating China’s biggest state-controlled telecom carriers to determine if they provide American data to the Beijing administration via US cloud services.
China Mobile, China Telecom, and China Unicorn are the firms at the center of the probe conducted by the Commerce Department.
Reuters cited three sources close to the investigation, confirming that the telecoms companies had been subpoenaed. Moreover, “risk-based analyses” have been carried out on two of the three entities so far.
Collectively, they have a small operation in the US. Still, through their cloud activity and routing wholesale online traffic, the Chinese firms have a foothold in Americans’ data despite previously being prohibited by US regulators from providing telephone and internet provisions.
Government agencies have been wary of potential security flaws linked to state-owned Chinese telecoms for several years. For similar reasons, Unicom was barred from the US market in 2022, following previous sanctions against China Mobile.
At the time of writing, there has yet to be a response from the companies under question or their US lawyers. Still, the Chinese Embassy in Washington pleaded for the United States to stop suppressing Chinese companies under false pretexts, adding its commitment to upholding and defending the interests of Chinese businesses.
US Against “Foreign Adversary” Companies
This investigation is the latest chapter in the ongoing geopolitical tensions between the two competing world powers. Beijing’s action against the companies is another attempt to thwart Beijing from exploiting any potential inroad to US data to harm American interests, business, or national security.
Another strand of the same strategy introduced sanctions on the sales and export of advanced US tech. It includes the processors required for AI purposes, including the delivery of chips to Chinese companies.
Although the Chinese companies involved in this issue are known to have a limited presence in the States, the option to significantly impact their business is a viable one. Regulators can investigate the services sold in the US by companies from “foreign adversary” nations, with the power to block transactions, enabling businesses to operate data centers and route internet data.
Curtailing this activity would prevent Chinese companies from offering viable US-based services to a global customer base.
