China accuses US of ‘economic bullying’ over equipment ban

China has accused the U.S. of “economic bullying behavior” after U.S. regulators cited security threats in proposing to cut off funding for Chinese equipment in U.S. telecommunications networks.

China would “resolutely oppose the U.S. abusing state power to suppress specific Chinese enterprises with unwarranted charges in the absence of any evidence,” Foreign Ministry spokesman Geng Shuang told reporters at a daily briefing.

“The economic bullying behavior of the U.S. is a denial of the market economy principle that the U.S. has always advertised,” Geng said, adding the U.S. actions would “undermine the interests” of U.S. businesses and consumers, especially in rural areas.

“We would like to urge the U.S. once again to stop abusing the concept of national security,” Geng said.

The Federal Communications Commission votes next month on whether to bar telecom companies from using government subsidies to pay for networking equipment from Huawei and ZTE.

The move mostly affects small, rural companies, since larger U.S. wireless companies do not use equipment from the two Chinese firms.

The agency is also exploring the impact of requiring companies to rip out their current Huawei and ZTE equipment, a demand a trade group for small rural wireless carriers has said would cost up to $1 billion.

The government is seeking comments on how it can help companies financially if they’re required to do that. Bills in Congress have proposed setting $700 million to $1 billion aside for telecom companies to replace their networks.

The U.S. government says Huawei, the world’s biggest supplier of telecom gear and No. 2 smartphone manufacturer, poses an espionage threat. It has presented no evidence of its equipment being used for spying by the Chinese government and both Huawei and ZTE have denied their equipment is used for such purposes.

The U.S. government also has been pressuring allies to ban Huawei from their networks and has restricted exports of U.S. technology to Huawei.