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U.S. Expands Bans of Chinese Security Cameras, Network Equipment

The Wall Street Journal 11/26/2022 Drew FitzGerald
© CARLOS GARCIA RAWLINS/REUTERS

The Federal Communications Commission voted 4-0 to ban sales of new telecom and surveillance equipment made by several Chinese companies, arguing that their ownership and practices threaten U.S. national security.

The rule change affects 10 companies already subject to other restrictions and prohibits them from marketing or importing new products. They include security-camera makers Hangzhou Hikvision Digital Technology Co., Hytera Communications Corp. and Zhejiang Dahua Technology Co. and telecom equipment makers Huawei Technologies Co. and ZTE Corp. 

The FCC made its order public Friday. The latest order stops short of requiring U.S. equipment buyers to remove items they have previously purchased or stripping authorizations for electronics models that already exist.

A spokesman for Hikvision said the FCC’s decision won’t protect U.S. national security, “but will do a great deal to make it more harmful and more expensive for U.S. small businesses, local authorities, school districts, and individual consumers.”

A Huawei spokeswoman declined to comment. Representatives from Hytera, Dahua and ZTE couldn’t immediately be reached for comment. The technology companies have spent months protesting the proposed ban in regulatory filings.

The FCC’s move is the latest by U.S. officials to crimp China’s technology sector and could challenge a tentative rapprochement struck by President Biden and Chinese leader Xi Jinping earlier this month. The two leaders agreed to try to arrest the downward spiral in U.S.-China relations and to resume high-level contacts and find areas of cooperation, like working on climate change.

Since the Biden-Xi meeting at midmonth, Treasury Secretary Janet Yellen held talks with China’s central bank governor and Defense Secretary Lloyd Austin also met with his Chinese counterpart.

Still, China’s foreign minister, Wang Yi, has said the onus on improving ties is on the U.S., which he said must respect Chinese interests. Among the sore points is an October decision by the Biden administration to ban the export to China of cutting-edge semiconductors and the tools to make them to hobble key Xi goals to boost Chinese technology and military capabilities.

ZTE and especially Huawei previously have been hit by U.S. export controls and faced pressure campaigns by Washington on other countries to restrict business with the Chinese telecommunications equipment makers. The surveillance equipment makers have also been recent targets of the Biden and Trump administrations and U.S. regulators.

Russian security software maker Kaspersky Lab is also on the list of tech companies covered by the sanctions.

Hikvision said earlier this month in an FCC filing that a ban would represent an “unprecedented, unjustified, and unlawful action to ban authorization of end user video surveillance equipment that may never be connected to any public telecommunications or broadband networks.”

Chinese companies have made limited inroads in U.S. cable and cellphone networks over the past decade, but their foothold in the commercial surveillance market runs deeper. Hikvision is the top worldwide seller of professional security equipment by revenue and ranks No. 5 in the U.S., according to market researcher Omdia.

The bipartisan FCC decision adds to a growing list of U.S. rules designed to choke off Chinese technology companies’ access to American infrastructure that officials consider especially vulnerable to potential spying or disruption. The FCC in 2019 blocked businesses that receive federal telecom subsidies from buying Huawei or ZTE equipment. That restriction hurt Huawei’s fledgling sales to rural cable and wireless companies, but stopped short of an outright ban.

The FCC later launched a rule-making process to draw a list of foreign technology companies that “pose an unacceptable risk to the national security of the United States or the security and safety of United States persons.” The agency in 2021 said it was considering whether its authority over radio signals could be used to restrict covered companies’ authorizations to sell wireless devices.

—Charles Hutzler contributed to this article.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com

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