China on Wednesday accused Washington of “oppressing Chinese companies” after U.S. regulators rejected telecom suppliers Huawei and ZTE on national security grounds.
The accusation came after the Federal Communications Commission (FCC) classified both two companies, which are controlled by the ruling Chinese Communist Party, as security threats, in a move that will bar U.S. companies from using government money to buy products from the Chinese telecoms groups.
Ajit Pai, FCC chairman, said the move would prevent Huawei and ZTE from receiving any of the $8.3bn that the government provides to US companies to ensure that underserved areas of the country have telecoms services.
“Both companies have close ties to the Chinese Communist party and China’s military apparatus and both companies are broadly subject to Chinese law obligating them to co-operate with the country’s intelligence services,” Pai said, according to the Financial Times.
A Beijing foreign ministry spokesman responded by alleging Washington was “abusing state power” to hurt Chinese companies “without any evidence.”
“We once again urge the United States to stop abusing the concept of national security, deliberately discrediting China and unreasonably oppressing Chinese companies,” said the spokesman, Zhao Lijian.
Huawei and ZTE deny accusations they answer to the Communist Party.
Huawei’s founder, Ren Zhengfei, said last year he would refuse official demands to reveal its customers’ secrets despite a law that obliges Chinese companies to cooperate with intelligence agencies.
Congress enacted a law in March that will provide up to $1 billion for carriers to replace Chinese-made equipment.
The Trump administration is lobbying its European and other allies to avoid Huawei as they upgrade to next-generation, or 5G, telecom networks.
An assistant secretary of state, Keith Krach, said last week Washington might be willing to help other countries pay for 5G gear from European rivals Nokia Corp. and LM Ericsson to avoid buying Huawei technology.
The FCC decision on Tuesday was the latest in a series of actions against the companies by the U.S. government
Last month, the U.S. Commerce Department implemented plans to block China’s Huawei Technologies from obtaining foreign-made semiconductors built using U.S. technology.
The 2019 National Defense Authorization Act also included a provision that prevented federal agencies and contractors from buying certain products from the companies, after U.S. intelligence officials advised Americans against using cellphones by Huawei and ZTE in February 2018 and the Pentagon announced it would ban the sale of all smartphones made by both companies in May 2018.
The Associated Press and UPI contributed to this story