Huawei calls on US to lift export restrictions

American officials have accused Huawei of facilitating Chinese spying, a charge the company denies, and saw it as a growing competitor to US technology industries. (AFP)
Updated 12 July 2019

Huawei calls on US to lift export restrictions

  • American officials accuse Huawei of facilitating Chinese spying, a charge the company denies
  • Huawei reported earlier last year’s sales rose 19.5 percent over 2017 to $105.2 billion

SHENZHEN, China: The chairman of Huawei said Friday the Chinese tech giant has yet to see any benefit from President Donald Trump’s promise to allow US companies to sell some components to the company and called on Washington to remove it from a security blacklist.
The “unjust and unfair” decision to add Huawei Technologies, the biggest maker of network equipment for phone companies, to a list that restricts exports is hurting its US suppliers and global customers, Liang Hua told a news conference.
American officials accuse Huawei of facilitating Chinese spying, a charge the company denies, and see it as a growing competitor to US technology industries. Its founder, Ren Zhengfei, said in June the company has cut sales forecasts by $30 billion over the next two years due to curbs on access to US chips and other components.
Trump promised last month to allow some sales to Huawei but said it will stay on the “entity list” until talks over Washington’s tariff war with Beijing are concluded.
“So far we haven’t seen any tangible change,” Liang said.
“We’re not saying that just because things have relaxed a little, we’re fine with being on the blacklist,” he said. “Actually, we believe our listing on the blacklist should be lifted completely.”
Despite the US export restrictions, Huawei revenue grew in the first half of this year, Liang said. He declined to give details ahead of the release of financial results later this month.
Trump’s export curbs are a blow to US suppliers of chips and other technology for which Huawei is one of the biggest buyers.
Huawei reported earlier last year’s sales rose 19.5 percent over 2017 to $105.2 billion. The company founder, Ren Zhengfei, said ahead of that he expected sales to rise 30 percent this year, but those plans were derailed by Trump’s export curbs.
Liang said Huawei is deciding how to respond to possible loss of access to Google’s Android operating system for its mobile phones under Trump’s curbs. Huawei, the No. 2 global smartphone brand after Samsung, has developed its own operating system, Hongmeng, but has said so far it has no plans to use it on phones.
“The open Android operating system and ecosystem is still our first choice,” said Liang. “Of course, if America doesn’t let us use it, then might we in the future develop our own Hongmeng as our cellphone operating system? We still haven’t decided yet.”
Huawei also is developing its own chips and other technology, which would reduce the amount it spends on US components and help to insulate the company against possible supply disruptions. Huawei announced plans in January for a next-generation smartphone based on its own chips.


US-China trade deal gets tepid reception

Updated 14 December 2019

US-China trade deal gets tepid reception

  • The US Trade Representative office said they expect to sign the phase one agreement in the first week of January
  • US farmers and retailers welcomed the end to the dispute, but also wanted to see more information

WASHINGTON: US officials announced a truce in the trade war with China with much fanfare, but economists and trade experts call it largely a victory for Beijing.
After a dispute that raged for close to two years, with several fumbled efforts at a resolution, the US agreed to cancel planned tariffs and rollback others immediately, without a similar commitment from China to lift tariffs it imposed on the US.
“Pardon me if I don’t pop champagne, but aside from a cessation of continued escalation, there is not much worth cheering,” leading China expert Scott Kennedy said in an analysis of the agreement.
“The costs have been substantial and far reaching, the benefits narrow and ephemeral.”
The US Trade Representative office said they expect to sign the phase one agreement in the first week of January, and issued a fact sheet highlighting key points, including enforcement provisions and improved protection for American technology.
In addition, it includes a Chinese commitment to buy $200 billion more in US goods and services over two years, USTR said.
That would be a significant increase: China imported just shy of $190 billion in goods and services in 2017, so if the target is met it would cut the US trade deficit with China by a third.
President Donald Trump has long railed against the trade imbalance, citing it as proof China is using distorting policies to gain an unfair advantage.
Trump tweeted that Beijing “agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods, plus much more.”
Alliance for American Manufacturing President Scott Paul said agreeing to remove tariffs amounted to “giving away much of our leverage, while kicking the can down the road on the most meaningful trade issues with China.”
And trade economist Mary Lovely said the deal could only be viewed as a “partial win” which “didn’t move the needle very much.”
“We were kind of on a brink, and we saw the negotiators reach a deal that pulled us back, and I think that is important,” she said of the news Trump canceled the 15 percent tariffs on electronics that were due to hit Sunday.
But the gains in the deal do not compensate for the damage to US farmers and businesses, she told reporters.
“President Trump is desperately trying to get back to where the economy was 18 months ago,” before taking this “unilateral, brute force approach,” Lovely said.
But Kennedy said that in exchange for “only limited concessions, China has been able to preserve its mercantilist economic system and continue its discriminatory industrial policies at the expense of China’s trading partners and the global economy.”
US farmers and retailers welcomed the end to the dispute, but also wanted to see more information.
American Farm Bureau Federation President Zippy Duvall noted that prior to the eruption of hostilities China was the second-largest market for US agricultural products, but dropped to fifth.
“Reopening the door to trade with China and others is key to helping farmers and ranchers get back on their feet,” Duvall said in a statement.
In addition to the collapse in exports, and surge in farm bankruptcies, the US government has paid tens of billions of dollars in aid to farmers to compensate for lost sales — funds that come from tariffs paid by US consumers and businesses.
The National Retail Federation, which has long opposed US tariffs, particularly the last two rounds which hit consumer products in particular, said “the trade war won’t be over until they are eliminated completely.”