US Expels China Unicom Following China Telecom Ban

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] The U.S. Federal Communications Commission (FCC) has revoked the operating license of China Unicom, one of China's three major telecommunications companies, in the United States citing "potential security threats." This comes three months after the expulsion of China Telecom in October last year.

According to Bloomberg and other sources on the 27th (local time), the FCC, an independent agency overseen by the U.S. Congress, held a meeting attended by four commissioners and decided this with a unanimous vote of 4 to 0.

The FCC determined that the Chinese government effectively owns and controls China Unicom. FCC Commissioner Jessica Rosenworcel stated, "The national security landscape has changed," adding, "There is accumulating evidence that Chinese state-owned telecommunications companies pose a substantial threat to the security of U.S. telecommunications networks."

Accordingly, China Unicom's U.S. subsidiary, China Unicom America, must cease all services within 60 days. This marks 20 years since China Unicom entered the U.S. market in 2002. China Unicom protested the FCC's decision, stating that it lacked "legitimate grounds and proper procedures."

In 2020, when telecommunications security issues arose, the FCC required Chinese telecom companies, including China Unicom, to provide explanations regarding security threats. China Unicom responded that it had "operated in compliance with laws in the U.S. for about 20 years" and was willing to cooperate with U.S. authorities, but the FCC said the responses were "incomplete, inaccurate, or misleading."

In October last year, the U.S. also revoked the operating license of another major Chinese telecom company, China Telecom, citing it as "subject to exploitation, influence, and control by the Chinese government." China Telecom established its U.S. subsidiary two years earlier than China Unicom, in 2000, and has operated mobile phone and internet services in the U.S.

The U.S. taking the strong measure of "license revocation" consecutively is analyzed as reflecting its determination not to expose telecommunications networks to even minor risks. Following China Telecom and China Unicom, China Mobile, the third major Chinese telecom company, was also delisted from the New York Stock Exchange. This was due to an executive order issued by former President Donald Trump in November 2020 banning American investments in companies linked to the Chinese military.