US steps up pressure on Huawei, ZTE

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A man holds a sign calling for China to release Wang Bingzhang and former Canadian diplomat Michael Kovrig, at the Supreme Court bail hearing of Huawei CFO Meng Wanzhou in Vancouver, Canada. (Reuters)
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Canada detained Meng Wanzhou, chief financial officer of the Chinese telecommunications giant Huawei, at the request of the United States. (AP Photo)
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Huawei is viewed with suspicion in the US because of fears that their switches and other gear could be used to spy on Americans. (Reuters)
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Huawei is viewed with suspicion in the US because of fears that their switches and other gear could be used to spy on Americans. (Reuters)
Updated 17 January 2019
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US steps up pressure on Huawei, ZTE

  • Washington has been pressing allies to refrain from buying Huawei’s switches and other gear because of fears they will be used by Beijing for espionage
  • Canada detained Huawei founder Ren Zhengfei’s daughter, Meng Wanzhou, who is Huawei’s chief financial officer, in December at the request of US authorities

WASHINGTON/BEIJING: A bipartisan group of US lawmakers introduced bills on Wednesday that would ban the sale of US chips or other components to Huawei Technologies Co. Ltd, ZTE Corp. or other Chinese telecommunications companies that violate US sanctions or export control laws.
The proposed law drew sharp criticism from China where Foreign Ministry spokeswoman Hua Chunying called the US legislation “hysteria,” intensifying a bitter trade war between Beijing and Washington.
The bills were introduced shortly before the Wall Street Journal reported federal prosecutors were investigating allegations that Huawei stole trade secrets from T-Mobile US Inc. and other US businesses.
The Journal said that an indictment could be coming soon on allegations that Huawei stole T-Mobile technology, called Tappy, which mimicked human fingers and was used to test smartphones.
Huawei said in a statement the company and T-Mobile settled their disputes in 2017 following a US jury verdict that found “neither damage, unjust enrichment nor willful and malicious conduct by Huawei in T-Mobile’s trade secret claim.”
Hua urged US lawmakers to block the bills.
“I believe the action of these few representatives are an expression of extreme arrogance and an extreme lack of self-confidence,” Hua said.
“Actually the whole world can see very clearly that the real intent of the United States is to employ its state apparatus in every conceivable way to suppress and block out China’s high-tech companies,” she added.
The legislation is the latest in a long list of actions taken to fight what some in the Trump administration call China’s cheating through intellectual property theft, illegal corporate subsidies and rules hampering US corporations that want to sell their goods in China.
In November, the US Department of Justice unveiled an initiative to investigate China’s trade practices with a goal of bringing trade secret theft cases.
At that time, Washington had announced an indictment against Chinese chipmaker Fujian Jinhua Integrated Circuit Co. Ltd. for stealing trade secrets from US semiconductor company Micron Technology relating to research and development of memory storage devices.
Jinhua, which has denied any wrongdoing, was put on a list of entities that cannot buy goods from US firms.
On Capitol Hill, Senator Tom Cotton and Representative Mike Gallagher, both Republicans, along with Senator Chris Van Hollen and Representative Ruben Gallego, both Democrats, introduced the bills that would require the president to ban the export of US components to any Chinese telecommunications company that violates US sanctions or export control laws.
The bills specifically cite ZTE and Huawei, both of which are viewed with suspicion in the US because of fears that their switches and other gear could be used to spy on Americans. Both have also been accused of failing to respect US sanctions on Iran.
“Huawei is effectively an intelligence-gathering arm of the Chinese Communist Party whose founder and CEO was an engineer for the People’s Liberation Army,” Cotton wrote in a statement. “If Chinese telecom companies like Huawei violate our sanctions or export control laws, they should receive nothing less than the death penalty — which this denial order would provide.”
The proposed law and investigation are two of several challenges that Huawei, the world’s biggest telecommunications equipment maker, faces in the US market.
In addition to allegations of sanctions-busting and intellectual property theft, Washington has been pressing allies to refrain from buying Huawei’s switches and other gear because of fears they will be used by Beijing for espionage.
Huawei’s founder, Ren Zhengfei, denied this week that his company was used by the Chinese government to spy.
Canada detained Ren’s daughter, Meng Wanzhou, who is Huawei’s chief financial officer, in December at the request of US authorities investigating an alleged scheme to use the global banking system to evade US sanctions against Iran.
For its part, ZTE agreed last year to pay a $1 billion fine to the United States that had been imposed because the company breached a US embargo on trade with Iran.
As part of the agreement, the US lifted a ban in place since April that had prevented ZTE from buying the US components it relies on heavily to make smartphones and other devices.


Saudi Arabia real estate reform ‘on the right track,’ housing minister tells conference

Updated 10 min 37 sec ago
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Saudi Arabia real estate reform ‘on the right track,’ housing minister tells conference

  • Financial Sector Conference is designed to showcase Saudi Arabia’s finance industry to a world audience
  • The most eye-catching was a plan by the Saudi Real Estate Refinance Company (SRC)

RIYADH: Saudi Arabia’s real estate finance sector — crucial to the ambition of a home-owning economy under the Vision 2030 strategy — is maturing rapidly, a high-profile event in Riyadh heard on Wednesday.
“We’re on the right track,” housing minister Majid Al-Hogail told attendees on the first day of the Financial Sector Conference, designed to showcase Saudi Arabia’s finance industry to a world audience.
His comments came as financial institutions in the Kingdom announced a raft of measures to encourage more home ownership.
The most eye-catching was a plan by the Saudi Real Estate Refinance Company (SRC) — owned by the Public Investment Fund — to issue up to SR3.75 billion ($1 billion) worth of sukuk, or Islamic bonds, this year to finance home ownership plans.
Fabrice Susini, chief executive of the company, said SRC had spent SR1.2 billion buying mortgages from local mortgage finance companies and adding liquidity to these firms. SRC is often compared to US home finance group Fannie Mae.
Reform of the financial infrastructure of the property market is regarded as crucial to Saudi Arabia’s Vision 2030 reform plans, to ensure an ownership rate of 70 percent in the privately owned housing market by 2030.
In a panel entitled “Mortgages: Bolstering Industry Appetite,” Al-Hogail spoke of the unique position Saudi Arabia has in the housing market, highlighting the relevance of a database established by the Ministry of Housing to give a better and deeper understanding of the market. The diverse nature of the market presents its own challenges, he said.
“Every city has its own different set of challenges and we can’t generalize. With the establishment of the database, it provides the ministry with a better future outlook through more detailed information, obtained through various means — whether it were through the Electric Company, through the Ministry of Municipal and Rural Affairs, or through the General Authority for Statistics and their surveys.”
“Over 16 government agencies support the housing sector to achieve Saudi Vision objectives, to increase property ownership among Saudis to 70 percent by 2030,” he said.
An official report for the first quarter of 2019 revealed that the finance market reached SR5.6 billion last March. Some 12,800 citizens received loans, and 85 percent were subsidised.
Saudi Arabia last year announced plans to boost the size of the mortgage market to SR502 billion by 2020 as part of a comprehensive plan to provide housing finance to its citizens, facilitating a balanced and sustainable housing environment through the establishment and development programs.
In other deals, Bidaya Home Finance announced three initiatives to enhance the Saudi market. Its first initiative involved the sale of Bidaya’s mortgage portfolio to SRC, valued at SR500 million over a period of six months. SRC, formed in 2017, is also keen to tap foreign institutional investors for its debt sale this year, Fabrice Susini told Reuters in an interview. “Our strategy is clearly to tap the market twice this year,” he said.
“We are really looking at probably issuing something between SR2 to 4 billion that we may be issuing in two tranches.”
He said SRC was looking at sukuk in the 10- to 15-year range, to help minimize refinancing risks. “Generally speaking we are trying to issue as long as possible,” Susini said. He added that the company was assessing whether it could also issue bonds in currencies other than the Saudi riyal.
In March, SRC completed a SR750 million sukuk issue with multiple tenors, under a program that allows it to issue up to SR11 billion of local currency denominated Islamic bonds.