The U.S. communications regulator voted to revoke China Telecom America's license on national security grounds, another Washington step against what it considers possible infiltration by Chinese companies into key networks.
The decision by the U.S. Federal Communications Commission (FCC) means that China Telecom Americas must stop providing services in the United States within 60 days. China Telecom, China's largest telecommunications company, has provided telecommunications services in the United States for nearly 20 years.
The news caused shares of Chinese technology companies listed in the U.S. to plummet and their shares in Hong Kong also saw significant selling off, causing the Hang Seng Index to fall by more than 1 percent.
The Hang Seng index of the technology sector lost more than 3 percent, and major players such as Tencent, Alibaba, JD.com and XD were among those affected.