US regulators on Tuesday revoked the authorization for China Telecom's American subsidiary to conduct business in the United States, citing "significant" national security risks.
The Federal Communications Commission (FCC)'s vote orders China Telecom America to discontinue service within 60 days, ending a nearly 20-year operation in the United States -- and undoubtedly ratcheting up tensions between the economic superpowers.
"China Telecom Americas' ownership and control by the Chinese government raise significant national security and law enforcement risks by providing opportunities for China Telecom Americas, its parent entities, and the Chinese government to access, store, disrupt, and/or misroute US communications, which in turn allow them to engage in espionage and other harmful activities against the United States," the FCC said in a statement.
"Promoting national security is an integral part of the Commission's responsibility to advance the public interest, and today's action carries out that mission" to safeguard US telecoms infrastructure.
Hong Kong stocks opened sharply lower on Wednesday morning on the China Telecom America news.
China Telecom is China's largest fixed-line operator connecting customers to the internet.