US Department of Commerce Issues Summons to Chinese IT Companies

"National Security Risk Confirmed"
Huawei and ZTE Likely to Be Included

[Image source=AP Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] The U.S. Department of Commerce has issued subpoenas to Chinese companies providing information and communication technology (ICT) services within the United States. The stated purpose is to verify whether their activities potentially pose a threat to national security, but a backlash from China is anticipated.

Gina Raimondo, U.S. Secretary of Commerce, said in a statement on the 17th (local time), "China has been undermining our technological superiority and threatening our alliances," adding, "This subpoena is to gather information to make decisions on measures that will best protect American businesses, workers, and national security," according to major foreign media and Bloomberg News.

The statement did not specify which companies would be subpoenaed. However, since last month the Biden administration announced it would enforce Trump-era rules targeting Chinese tech companies deemed a threat to the U.S., despite opposition from American businesses, Huawei and ZTE are highly likely to be included. The Trump administration had designated these two companies for removal from U.S. telecommunications infrastructure.

The Department of Commerce announced a temporary final rule at the end of the Trump administration to address concerns about the IT supply chain, stating it would take effect immediately after a 60-day public comment period. Last month, the U.S. Department of Defense said it would continue to solicit public input on this matter until the rule’s implementation on March 22. A Defense Department official explained, "This subpoena will not affect the timing of the temporary final rule’s enforcement."

However, this move by the Commerce Department has been criticized for giving the government leeway to intervene without restrictions in technology-related commercial transactions between U.S. and foreign companies. The Business Roundtable, a U.S. economic organization, said, "The Commerce Department’s plan will not be properly implemented by current American companies."

Concerns have also been raised that Chinese companies may not cooperate fully. A researcher at the American Enterprise Institute (AEI), a Republican-leaning U.S. policy think tank, told Bloomberg News, "The Chinese government may provide misused information to protect state and corporate secrets," adding, "This subpoena will not be easy." He further noted, "In the past, Chinese companies have shown such behavior by refusing disclosure obligations during stock listings."

To curb the growing influence of Chinese ICT companies, the U.S. has recently initiated various plans citing national security reasons. In fact, the U.S. Federal Communications Commission (FCC) last week banned the use of telecommunications and video surveillance equipment produced by five Chinese companies, including Huawei, ZTE, and Hytera, citing national security threats. On the same day, the FCC began procedures to revoke the operating licenses of China Unicom, Pacific Networks, and its subsidiary ComNet in the U.S. Bloomberg News explained, "The FCC views these companies as security risks because they are controlled by the Chinese government."

This content was produced with the assistance of AI translation services.