Huawei's new flagship store is seen during a media tour a day ahead of its official opening in Shanghai, following the coronavirus disease (COVID-19) outbreak, China June 23, 2020. Picture taken June 23, 2020.

Trump administration claims Huawei ‘backed by Chinese military’

Image credit: REUTERS/Aly Song

The Trump administration has claimed that a number of top Chinese firms, including Huawei Technologies, are owned by or controlled by the Chinese military, laying the groundwork for new US financial sanctions.

Last year, Washington placed Huawei Technologies and video surveillance company Hikvision on a trade blacklist over national security concerns, which has led to an international campaign to convince allies to exclude Huawei from their 5G networks.

A Department of Defense (DoD) document listed 20 companies operating in the US that Washington alleges are backed by the military in China, which includes other tech firms such as China Mobile Communications Group, China Telecommunications Corp as well as aircraft manufacturer Aviation Industry Corp of China. 

The designations were drawn up by the Defense Department, which was mandated by a 1999 law to compile a list of Chinese military companies operating in the US, including those “owned or controlled” by the People’s Liberation Army that provide commercial services, manufacture, produce or export.

The Pentagon’s designations do not trigger penalties, but the law says the president may impose sanctions that could include blocking all property of the listed parties.

Although many of the firms listed did not respond to requests for comments, Hikvision called the allegations “baseless,” noting it was not a “Chinese military company,” and had never participated in any R&D work for military applications. However, it said it would work with the US government to resolve the matter.

The Pentagon has come under pressure from lawmakers of both US political parties to publish this list. This comes amid rising tensions between Washington and Beijing over technology, trade and foreign policy.

Last September, top US Senate Democrat Chuck Schumer, Republican senator Tom Cotton and Republican representative Mike Gallagher penned a letter to defence secretary Mark Esper raising concerns about Beijing’s enlisting of Chinese corporations to harness emerging civilian technologies for military purposes.

Cotton and Gallagher this week praised the DoD for releasing the list and urging the president to impose economic penalties against the firms. 

The White House, however, did not comment on whether it would sanction the companies on the list. A senior administration official said the list can be seen as “a useful tool for the US Government, companies, investors, academic institutions and like-minded partners to conduct due diligence with regard to partnerships with these entities, particularly as the list grows”. 

In April, the US Justice Department and other federal agencies called on the Federal Communications Commission (FCC) to revoke China Telecom (Americas) Corp’s authorisation to provide international telecommunications services to and from the US. The telecoms regulator rejected a similar request by China Mobile last year that had been pending for years.

The Trump administration is also likely to formally reject activation of an undersea cable connecting the US and Hong Kong, over fears of data theft by the Chinese government.

The ‘Pacific Light Cable Network’ connects the US, Hong Kong, Taiwan and the Philippines and is the highest capacity trans-Pacific route for internet traffic.

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