Chinese telecom firm to cease Canada operations

Chinese telecommunications firm CMLink will cease its operations in Canada today.

CMLink was forced to close after its parent company, China Mobile—a Chinese state-owned telecom carrier—refused to comply with a Canadian government directive to divest its stake in the subsidiary. China Mobile has been on a US government investment blacklist since June 2021 due to its ties to Chinese military and surveillance sectors, leading to concerns in Canada that the Chinese government could leverage the company to undertake espionage.

A suit filed by China Mobile requesting a stay on the divestment order was rejected by the Canadian Federal Court. China Mobile subsequently opted to shut down CMLink entirely rather than divest.

This move by the Canadian government is part of a broader ongoing push in the US and Canada to decouple from China’s economy in key security and technology-related sectors. Expect this push to continue, as it is broadly supported by most US and Canadian political stakeholders. China will not directly retaliate against Canadian and US commerce on a large scale, as it has already been practicing mercantilist policies for decades. Few influential Canadian or US corporations, therefore, are likely to push back against the move.

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