SHANGHAI/HONG KONG • The Donald Trump administration has moved to block China Mobile from offering services to the US telecom market, recommending its application be rejected because the firm posed national security risks.

The Federal Communications Commission should deny the state-owned China Mobile's 2011 application to offer telecommunication services between the US and other countries, the National Telecommunications and Information Administration (NTIA) said in a statement posted on its website.

"After significant engagement with China Mobile, concerns about increased risks to US law enforcement and national security interests were unable to be resolved," said the statement, which quoted Mr David Redl, assistant secretary for communications and information at the US Department of Commerce, which NTIA is part of.

China Mobile, the world's largest telecom carrier with 899 million subscribers, did not immediately respond to a request for comment yesterday.

However, Chinese Foreign Ministry spokesman Lu Kang, in response to a question about China Mobile at a daily briefing, said: "We urge the relevant side in the United States to abandon Cold War thinking and zero sum games."

China always encourages its companies to operate in accordance with market rules and to respect the laws of the countries it operates in, he said, adding that the US should stop putting "unreasonable pressure" on Chinese firms.

The move by the US administration to block China Mobile comes amid growing trade frictions between the two countries. The US is set to impose tariffs on US$34 billion (S$46 billion) worth of goods from China on Friday, which Beijing is expected to respond to with tariffs of its own.

Another Chinese company that has been caught in the crosshairs of the trade spat is ZTE Corp.

The No. 2 telecommunications equipment maker in China was forced to cease major operations in April after the US slapped it with a supplier ban, saying it broke an agreement to discipline executives who conspired to evade US sanctions on Iran and North Korea.

ZTE is in the process of getting the ban lifted and announced a new board last week, but its settlement deal with the US is opposed by some lawmakers in Washington.

China Mobile Communications Corp, a state-controlled firm, owned almost 73 per cent of China Mobile as of December, according to Thomson Reuters data.

In its recommendation, the NTIA said its assessment rested "in large part on China's record of intelligence activities and economic espionage targeting the US, along with China Mobile's size and technical and financial resources".

US senators and spy chiefs warned in February that China was trying, via means such as telecommunications firms, to gain access to sensitive US technologies and intellectual properties.

REUTERS