Tech decoupling to continue under Biden after latest crackdown

The US’ latest crackdown on Chinese telecom companies Huawei, ZTE and China Telecom has little impact on these companies due to their tiny share of revenue in the US market, but signals continuous tech ‘decoupling’ with China in the Biden era, experts said.

The US Federal Communications Commission (FCC) on Thursday voted unanimously to order US carriers to remove equipment provided by Huawei and are discussing whether to end China Telecom’s license to operate in the US, citing “national security.”

Along with the vote, the agency said it would establish a project to reimburse carriers for removing Huawei gear, but needs Congress to devote an estimated $1.6 billion.

Ma Jihua, an industry expert said on Friday that the FCC’s continuous crackdown on Huawei and China Telecom is expected but has a slight impact on the companies, as only a tiny percentage of their sales are in the US.

“Many small American telecommunications carriers also use Huawei equipment in rural areas, which will take years for them to completely remove,” Ma said, noting that Congress is likely paying lip service to reimbursement.

The FCC said in September that it would need $1.84 billion to replace Huawei and ZTE gear from the rural telecommunications infrastructure.

However, experts warned that the FCC’s actions to abuse “national security” connections and politicize commercial issues are not a single case, and reflect the US’ anti-China strategy.

The Biden administration may expand cooperation with China as Biden considers China the US’ biggest competitor, rather than its largest threat, He

Weiwen, a former trade official said.

“We urge the US to stop abusing national security, stop its unreasonable crackdown on certain Chinese companies, and provide a fair and non-discriminatory environment for international cooperation,” said Chinese Foreign Ministry spokesperson Hua Chunying on Friday.