US Senators are urging Biden to sanction Chinese cloud firms, including Huawei and Alibaba
- Nine Republican senators expressed concern about Huawei Cloud and other Chinese cloud computing services in a letter to the Biden Administration.
- The senators also urged the administration to add Alibaba Cloud to the Commerce Department’s export control list for its ties to the Chinese Communist Party.
Chinese cloud computing providers, especially Huawei Cloud, may soon be placed under the radar of the Biden Administration as the latter is under increasing Republican pressure to outcompete China. Earlier this week, a group of US Republican senators wrote a letter to Washington, urging the Biden administration to impose sanctions on Chinese cloud service providers, citing national security concerns.
The letter, led by Senator Bill Hagerty to the Commerce, State, and Treasury departments, suggested the Biden administration “use all available tools” to devise decisive action against these firms “through sanctions, export restrictions, and investment bans.” The letter even recommended the Biden Administration investigate further other Chinese cloud computing service companies, including those operated by Baidu and Tencent.
The Senators’ letter even stated that Chinese cloud computing companies “are increasingly engaging with foreign entities – in some cases sanctioned foreign entities – that are directly challenging the national security and economic security interests of the US and our allies and partners.”
Hagerty and eight colleagues also emphasized that Huawei Cloud recently “launched its ‘Sky Computing Constellation’ in co-sponsorship with Changsha Tianyi Space Science and Technology Research Institute (also known as ‘Spacety China’)” in 2021. They noted the Treasury Department recently sanctioned the project for providing “significant satellite imagery assistance to entities in the Russian Federation.”
For context, the US Commerce Department has already recognized that Huawei poses a national security threat and has added the Chinese giant to the “Entity List” of companies to which US persons need a license to export. The subsidiary Huawei Cloud was also added to the Entity list a year later, in August 2020.
“Because the Commerce Department found there was “reasonable cause to believe, based on specific and articulable facts,” that Huawei Cloud had “been involved, [is] involved, or pose[d] a significant risk of being or becoming involved in activities contrary to the national security or foreign policy interests of the US,” the letter reads.
The Senators also noted that further alarming information on Huawei Cloud has come to light even after being added to the list. “On December 14, 2021, a news report by the Wall Street Journal revealed that Huawei Cloud uses its technologies to help the Chinese government identify individuals by voice, monitor political dissidents, manage ideological reeducation and labor schedules for prisoners, and help retailers use facial recognition to track shoppers,” the letter reads.
In light of that, all nine senators, therefore, urge Biden to impose sanctions on Huawei Cloud “under existing authorities for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of recently-sanctioned Spacety,” the letter continued.
Hagerty and his colleagues also highlighted Alibaba Cloud, among other Chinese cloud service companies rapidly expanding their presence in America and beyond, “posing similar national security concerns.”
In fact, Hagert noted that they are “gravely concerned by Alibaba Cloud (Aliyu)—the cloud services arm of Alibaba, a “national champion” company of the Chinese Communist Party (CCP)—having opened two cloud data centers in Santa Clara, California, in 2015—in the heart of Silicon Valley.”
Those data centers reportedly provide a variety of cloud computing services that initially focused on Chinese companies based in the US and have gradually expanded services and products to international clients. Interestingly, as with the fate of Huawei and its cloud arm, the senators reckon Biden should take at least two other actions against Alibaba Cloud.
“First, Alibaba Cloud should be added to the Entity List. Its close ties to the PRC military render it a clear ongoing national security threat. Furthermore, the Entity List has proven porous, as the Commerce Department has liberally granted licenses to export to listed companies,” the letter said.
Therefore, the senators suggested listing Alibaba Cloud and denying license applications to export to the company. “US companies should not be aiding Alibaba Cloud with exported American technology,” the senators noted. Both Huawei Cloud and Alibaba Cloud have not made any official comments following reports on the letter signed by the nine Republican senators.
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