Washington using state power to 'oppress Chinese companies'

China on Wednesday demanded Washington stop oppressing Chinese companies after US regulators declared telecom equipment suppliers Huawei and ZTE to be national security threats.

A Chinese foreign ministry spokesman said the US is “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.

The Federal Communications Commission on Tuesday blocked US firms from tapping an US$8.3 billion government fund to purchase equipment from the companies. They are two major suppliers of equipment to US rural wireless companies.

US regulators say Huawei Technologies, the biggest global maker of telecom switching equipment, and its smaller Chinese rival ZTE Corp might facilitate Chinese spying.

Huawei and ZTE did not immediately respond to requests for comment but have previously denied the accusations and sharply criticized the FCC’s actions.

Barring US firms from buying equipment from Chinese telecom companies will not help protect the US communication network, but will severely impact Internet services, especially in rural and underdeveloped areas, said Zhao.

The designation means service will suffer as small carriers shut down parts of their network because they can’t use subsidy funds for maintenance or replacement parts, Carri Bennet, general counsel for the Rural Wireless Association that represents carriers with fewer than 100,000 subscribers, told Bloomberg. “They’re in a bind. They don’t have cash to keep the networks afloat,” Bennet said.

The FCC had previously barred Huawei and ZTE from receiving other government subsidies.

In April, the FCC said it may shut down US operations of three Chinese telecommunications companies. It required China Telecom Americas, China Unicom Americas, Pacific Networks Corp and its wholly owned subsidiary ComNet (USA) to explain why it should not start the process of revoking authorizations enabling their US operations.