The U.S. Imposes More Restrictions On Chinese Tech Companies

Huawei Logo Smartphones USA US America Flag Illustration AH May 20 2019

The US Senate has passed a new bill that would limit Huawei Technologies or ZTE access to US-made equipment. The bill needs President Joe Biden signature for final approval.

The new sanctions are under the Secure Equipment Act. The targeted companies have secret connections with the Chinese government and provide censorship and espionage facilities for the government. The United States has also identified them as a threat to its national security under the Donald Trump administration.

The US Senate approved the bill on a 420-4 vote. Now, it’s time for President Biden to sign it and refer it to the relevant department for implementation.


The US administration is narrowing the field for Chinese tech companies

According to the new law, the Federal Communications Commission (FCC) can’t review or issue new equipment licenses to Chinese companies named in the bill. Besides Huawei, ZTE, the affected companies are Hytera Communications Corp, Hangzhou Hikvision Digital Technology Co, and Zhejiang Dahua Technology Co.

As Republican Senator Marco Rubio noted, “Chinese state-directed companies like Huawei and ZTE are known national security threats and have no place in our telecommunications network.” The US Senate had previously passed a new bill to support US chip manufacturers against Chinese rivals.

Moreover, the FCC also has the power to invalidate previous licenses issued to Chinese companies. According to FCC Commissioner Brendan Carr, they have approved more than 3,000 applications from Huawei since 2018. Carr also said that the new bill “will help to ensure that insecure gear from companies like Huawei and ZTE can no longer be inserted into America’s communications networks.”


New sanctions can hinder innovation and development in China

Before the new US administration took office, Chinese companies thought that the new administration would lift or at least reduce their sanctions. But the imposition of several new sanctions by Biden also showed that the new US government has no intention of compromising with the Chinese.

Dates back to June, President Biden announced he is imposing new sanctions against some Chinese tech companies. Some of the companies on the list were Aviation Industry Corp of China (AVIC), China Mobile Communications Group, China National Offshore Oil Corp (CNOOC), Hangzhou Hikvision Digital Technology Co Ltd, Huawei Technologies Ltd (HWT.UL), and Semiconductor Manufacturing International Corp (SMIC).

The imposition of sanctions, of course, provoked a reaction from Beijing. “The United States, without any evidence, still abuses national security and state power to suppress Chinese companies,” Zhao Lijian, a spokesperson at China’s foreign ministry, said.