The Chinese government has been using a private company jointly owned by a U.S. investment firm and its Chinese counterpart to expand its surveillance and telecommunications capabilities using American technology, The Wall Street Journal reports.
At the center of the Journal’s reporting is a company called Asia Satellite Telecommunications (AsiaSat). It’s a satellite operating company acquired back in 2015 by U.S. private equity firm The Carlyle Group and Chinese private equity firm CITIC Group. Both Carlyle and CITIC are known for their ties to government in their respective home nations.
While the U.S. government basically bans American companies from exporting satellite technology to foreign governments like China, there have been no controls put in place on how bandwidth from launched satellites is used once those satellites are in orbit.
Based in Hong Kong, AsiaSat isn’t subject to the same sort of export controls and regulations that the U.S. places on companies headquartered in mainland China, which has allowed the company to acquire U.S. satellites.
The Chinese government, through its connections with CITIC, has leveraged that loophole to bolster its surveillance and telecommunications capabilities for security activities, the Journal reports.
At issue are satellites bought by AsiaSat from Boeing and Maxar Technologies subsidiary SSL, of Palo Alto, Calif. We’ve reached out to Maxar and AsiaSat for comment.
“Boeing follows the lead of the U.S. Government with respect to the use of export controlled items,” the company said in a statement to TechCrunch.
The U.S. and China are in a highly public contest over who will control the future of networking technologies — with the U.S. accusing China’s leading commercial telecommunications vendors of collaborating with the Chinese government to spy on partners.