China slams US for ‘economic bullying’ of Huawei, ZTE

In May, Washington said it would blacklist Huawei from the US market and from buying crucial US components. (AP)
Updated 29 October 2019

China slams US for ‘economic bullying’ of Huawei, ZTE

  • The two Chinese firms have been accused of posing a national security threat because of their close ties to the Beijing government
  • In May, Washington said it would blacklist Huawei from the US market and from buying crucial US components

BEIJING: China on Tuesday blasted as “economic bullying” a US proposal to block telecom carriers buying from Chinese tech companies Huawei and ZTE.
The US Federal Communications Commission (FCC) said on Monday that the proposed rules — which also require carriers to remove any existing Huawei and ZTE equipment — were part of an initiative to “safeguard the nation’s communications networks.”
The two Chinese firms have been accused of posing a national security threat because of their close ties to the Beijing government, claims both have denied.
Chinese foreign ministry spokesman Geng Shuang slammed the US proposal as an attempt to “oppress certain Chinese businesses with groundless accusations.”
Geng said at a regular news briefing Tuesday that the move would ultimately hurt US businesses.
“The United States’ economic bullying goes against the market principles which the US has always trumpeted,” he said.
FCC chairman Ajit Pai said the new plan would bar communications companies from using any support they receive from the government’s Universal Service Fund to purchase equipment or services from companies “posing a national security threat,” including Huawei and ZTE.
The proposal — to be voted on November 19 — marks the latest effort by Washington to penalize Huawei, a major telecom infrastructure provider and smartphone maker that is already on a blacklist preventing it from access to certain US tech products and services.
“When it comes to 5G and America’s security, we can’t afford to take a risk and hope for the best,” Pai said in a statement.
“We need to make sure our networks won’t harm our national security, threaten our economic security, or undermine our values.”
Pai said that as the US upgrades to fifth-generation wireless networks, “we cannot ignore the risk that the Chinese government will seek to exploit network vulnerabilities in order to engage in espionage, insert malware and viruses, and otherwise compromise our critical communications networks.”
Huawei says Washington has provided no proof of any security risks posed by the company.
The rules would do little to improve information security and blocking access to Huawei gear would only harm US telecom networks, the company said in a statement.
“In 30 years of business, Huawei has never had a major security-related incident in the 170 countries where we operate,” the statement said.
“Banning specific vendors based on country origin will do nothing to protect America’s telecommunications networks.”
In May, Washington said it would blacklist Huawei from the US market and from buying crucial US components, though it has twice extended the company 90-day reprieves, the latest coming in August.
The United States has expressed concern that Huawei equipment could contain security loopholes that allow China to spy on global communications traffic, and has pressured US allies to block the use of Huawei equipment.


Oil hits three-month high as trade and Brexit fog lift

Updated 14 December 2019

Oil hits three-month high as trade and Brexit fog lift

  • Investor hopes on the rise after US-China progress and UK poll result ‘remove layer of uncertainty for global economy’

LONDON: Oil rose on Friday to its highest price in nearly three months as progress in resolving the US-China trade dispute and Britain’s general election result appeared to lift two clouds that have been dampening investor appetite for risk.

US sources said on Thursday that Washington has set its terms for a trade deal with Beijing, offering to suspend some tariffs on goods and cut others in exchange for Chinese purchases of more American farm goods.

Brent crude, the global benchmark, climbed to the highest since Sept. 23. It was up 45 cents at $64.65 in mid-afternoon trade in London as West Texas Intermediate crude gained 21 cents to $59.39.

The 18-month trade war has been a dampener for oil prices, while uncertainty around Brexit has also weighed. Britain’s ruling Conservative Party won a large majority in Thursday’s general election, giving it the power to take the country out of the EU.

“An eventful past 24 hours has removed a layer of uncertainty for the global economy,” said Stephen Brennock of oil broker PVM.

“Yet it remains to be seen whether the return of the feelgood factor is enough to set oil prices on a definitive northerly trajectory.”

A drop in the US dollar against the backdrop of a strong pound helped boost commodities. 

“Risk appetite among financial investors is now likely to remain high thanks to the deal between the US and China and the forthcoming end to the Brexit cliffhanger,” said Eugen Weinberg, an analyst at Commerzbank.

“This will also benefit the oil price,” he added.

Brent has rallied by almost 21 percent in 2019, supported by efforts by the Organization of the Petroleum Exporting Countries and allies including Russia to cut production.

The alliance, known as OPEC+, agreed last week to lower supply by a further 500,000 barrels per day as of Jan. 1. They have been limiting supply since 2017, helping to clear a glut that built up in 2014-2016.

OPEC’s own research indicates that the oil market in 2020 may see a small supply deficit, although the International Energy Agency sees global inventories rising despite the further step by OPEC+. 

Global stocks and sterling also gained on Friday as the double dose of relief around US-China trade and the UK election undercut safe-haven sovereign bonds and the Japanese yen, and led markets to scale back expectations of more interest rates cuts around the world.

“Global investors have been given two of the biggest gifts on their Christmas list and should be appreciative for a while at least,” said Sean Callow, a senior forex analyst at Westpac.

“Global equity indices such as MSCI World should set more record highs and sterling could push above $1.36.”

The pound reached its highest since mid-2018 as exit polls and then UK election results wiped out any chance of a victory by the left-wing Labour opposition or a hung parliament, which had been a worry for investors.

Prime Minster Boris Johnson won a commanding majority in Britain’s Parliament, giving him the power to deliver Brexit, though trade talks with the EU are set to drag on for months yet.