Lawmakers ask Pentagon to consider barring US investments in China's Quectel

[January 05, 2024]  By David Shepardson
 
WASHINGTON (Reuters) -The top Republican and Democrat on the U.S. House of Representatives' China committee on Thursday asked the Biden administration to consider adding China's Quectel Wireless to a list of Chinese military companies. 

The Pentagon building is seen in Arlington, Virginia, U.S, April 6, 2023. REUTERS/Tom Brenner/File Photo

Inclusion on the Treasury Department list would bar U.S. entities from buying or selling publicly traded securities in target companies.

Representatives Mike Gallagher, the committee chair, and Raja Krishnamoorthi, the top Democrat, earlier raised security concerns about Quectel and another Chinese firm, saying U.S. medical equipment, vehicles and farm equipment could be potentially accessed and controlled remotely from China if they use Chinese-made cellular modules.

"Our products are designed only for civil use cases and do not pose any threat to the national security of the United States. There is no basis to add Quectel to any U.S. government restricted list,” Norbert Muhrer, President and Chief Sales Officer of Quectel, said in a statement to Reuters adding the letter made "false accusations about Quectel."

The Treasury declined to comment.

The letter released on Thursday said Quectel was the world’s largest supplier of cellular "internet of things" modules "and is currently gaining market share in the U.S." It added there was "significant evidence suggesting Quectel may contribute to the defense industrial base" of China.

In June 2021, President Joe Biden signed an executive order banning U.S. entities from investing in dozens of Chinese companies with alleged ties to defense or surveillance technology sectors.

The designation applied in 2021 to about 59 companies replaced an earlier list.

Major Chinese firms included on the previous Defense Department list were also placed on the updated list in 2021, including Aviation Industry Corp of China (AVIC), China Mobile Communications Group, China National Offshore Oil Corp (CNOOC), Hangzhou Hikvision Digital Technology Co, Huawei Technologies and Semiconductor Manufacturing International Corp

In September, Federal Communications Commission Chairwoman Jessica Rosenworcel asked U.S. government agencies to consider declaring that Quectel and Fibocom Wireless posed unacceptable national security risks.

(Reporting by David Shepardson; Editing by Chizu Nomiyama, Jonathan Oatis and Tomasz Janowski)

[© 2023 Thomson Reuters. All rights reserved.]

Copyright 2022 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.