Trump attempts to block China Mobile’s US entry

03 July 2018 | Natalie Bannerman

The Trump-led US government has taken steps to try and prevent China Mobile from offering its services in the US telecommunications market.

David Redl, assistant secretary for communications and information at the US Department of Commerce (DOC) penned a recommendation to the Federal Communications Commission (FCC) through the National Telecommunications and Information Administration (NTIA) on behalf of the Executive Branch, recommending that China Mobile’s application be denied.

It was back 2011 that China Mobile applied for a license to offer its telecoms services between the US and other countries, under section 214 of the Communications Act of 1934. At the time as per international licensing procedures, the FCC requested comments from the Executive Branch on whether or not the license would be in the public interest.

"After significant engagement with China Mobile, concerns about increased risks to US law enforcement and national security interests were unable to be resolved. Therefore, the Executive Branch of the US government, through the National Telecommunications and Information Administration pursuant to its statutory responsibility to coordinate the presentation of views of the Executive Branch to the FCC, recommends that the FCC deny China Mobile’s Section 214 license request," said Redl.

Speaking to Reuters in response to the decision Lu Kang, spokesman for the Chinese foreign ministry said: "We urge the relevant side in the United States to abandon Cold War thinking and zero sum games." He went on to say that China encourages its companies to comply with market rules and the laws of the countries it operates in. He also said that the US should stop putting "unreasonable pressure" on Chinese companies.

The news comes in the middle of growing tensions between the US and China, following a supplier ban placed on its global telecoms vendor ZTE in April. At the time the DOC said that the company had supplying Iran and North Korea with equipment that illegally included US components. As a result it is now illegal for US tech companies such as Cisco, Dell, Intel, Microsoft, Oracle, Qualcomm and Symantec to trade with ZTE. And less than a month later ZTE said that it was shutting down all major operating activities. But in a last ditch attempt to save jobs, Trump doubled back on te decision and agreed a penalty of $1 billion and number of other conditions with the company to try and reach a settlement without having the company shut down. A decision that was shot down when only last month when the US Senate voted 85 to 10 to reinstate the ban on ZTE.

China Mobile’s shares were down 2%, the lowest it has been for more than four years according to Reuters. But Ramakrishna Maruvada, anaylyst Daiwa Securities said that the impact was minimal given that the company makes most of its money from the domestic market.

In its recommendation the NTIA said its assessment was based on "China’s record of intelligence activities and economic espionage targeting the U.S., along with China Mobile’s size and technical and financial resources."

Adding that China Mobile is "subject to exploitation, influence and control by the Chinese government" and that its application posed "substantial and unacceptable national security and law enforcement risks in the current national security environment".

Topics: Trump, US, China, China Mobile, Telecommunication, Executive Branch, Department of Commerce, National Telecommunications and Information Administration, Federal Communications Commission