China warns UK: ‘Dumping’ Huawei will cost you

Britain has become increasingly reliant on Chinese imports, which have doubled as a proportion of all imported goods over the past 15 years. (Reuters)
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Updated 16 July 2020

China warns UK: ‘Dumping’ Huawei will cost you

  • Britain denies that President Trump was responsible for its decision on the 5G provider

LONDON: China warned British Prime Minister Boris Johnson on Wednesday that his decision to ban Huawei from the 5G network would cost Britain dearly in investment, casting the move as the result of politicized pressure from US President Donald Trump.

Hours after Johnson ordered Huawei equipment to be purged from the nascent 5G network by the end of 2027, Trump claimed credit for the decision and said that if countries wanted to do business with the US they should block Huawei.

But China, whose $15 trillion economy is five times the size of Britain’s, warned the decision would hurt investment as Chinese companies watched London “dumping” the national telecoms champion.

“Now I would even say this is not only disappointing — this is disheartening,” Chinese ambassador Liu Xiaoming told the Center for European Reform, adding that Britain had “simply dumped this company.”

“The way you are treating Huawei is being followed very closely by other Chinese businesses, and it will be very difficult for other businesses to have the confidence to have more investment,” he said.

As Britain prepares to cast off from the European Union, fears over the security of Huawei have forced New York-born Johnson to take sides in the rivalry between the US and China.

In Beijing, the foreign ministry cast Britain as “a relatively small place” that was becoming subservient to the US.

“Does the UK want to maintain its independent status or be reduced to being a vassal of the United States, be the US’s cats paw?” Chinese foreign ministry spokeswoman Hua Chunying said. “The safety of Chinese investment in the UK is being greatly threatened.”

Britain has become increasingly reliant on Chinese imports. Some 9 percent of all goods imported into Britain in 2018 — worth £43 billion ($54 billion) — came from China, double the proportion from 15 years earlier.

But British companies have also invested increasingly in China. Between 2013 and 2018, they more than doubled their investment position in the world’s No.2 economy to £16 billion, according to official British data.

By contrast, Chinese investment in British companies stood at £1.8 billion in 2018 — far below that of the United States, which is the biggest single foreign investor in Britain.

Trump identifies China as the United States’ main geopolitical rival, and has accused the Communist Party-ruled state of taking advantage over trade and not telling the truth over the novel coronavirus outbreak, which he calls the “plague from China.”

Washington and its allies say Huawei technology could be used to spy for China. Huawei has denied this.

“We convinced many countries, many countries — I did this myself for the most part — not to use Huawei, because we think it’s an unsafe security risk, it’s a big security risk,” Trump told reporters in the White House Rose Garden on Tuesday.

“I talked many countries out of using it: if they want to do business with us, they can’t use it. Just today, I believe that UK announced that they’re not going to be using it.”

Britain has said that its ban on Huawei is motivated by its own security concerns and by worries that supplies of Huawei gear could be interrupted by US sanctions.

It denied that Trump alone was responsible for the Huawei ban. Asked about the comments, British Health Secretary Matt Hancock said: “Well, we all know Donald Trump, don’t we.”


Huawei: Smartphone chips running out under US sanctions

Updated 08 August 2020

Huawei: Smartphone chips running out under US sanctions

  • Huawei is at the center of US-Chinese tension over technology and security
  • Washington cut off Huawei’s access to US components and technology last year

BEIJING: Chinese tech giant Huawei is running out of processor chips to make smartphones due to US sanctions and will be forced to stop production of its own most advanced chips, a company executive says, in a sign of growing damage to Huawei’s business from American pressure.
Huawei Technologies, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. The feud has spread to include the popular Chinese-owned video app TikTok and China-based messaging service WeChat.
Washington cut off Huawei’s access to US components and technology including Google’s music and other smartphone services last year. Those penalties were tightened in May when the White House barred vendors worldwide from using US technology to produce components for Huawei.
Production of Kirin chips designed by Huawei’s own engineers will stop Sept. 15 because they are made by contractors that need US manufacturing technology, said Richard Yu, president of the company’s consumer unit. He said Huawei lacks the ability to make its own chips.
“This is a very big loss for us,” Yu said Friday at an industry conference, China Info 100, according to a video recording of his comments posted on multiple websites.
“Unfortunately, in the second round of US sanctions, our chip producers only accepted orders until May 15. Production will close on Sept. 15,” Yu said. “This year may be the last generation of Huawei Kirin high-end chips.”
More broadly, Huawei’s smartphone production has “no chips and no supply,” Yu said.
Yu said this year’s smartphone sales probably will be lower than 2019’s level of 240 million handsets but gave no details. The company didn’t immediately respond to questions Saturday.
Huawei, founded in 1987 by a former military engineer, denies accusations it might facilitate Chinese spying. Chinese officials accuse Washington of using national security as an excuse to stop a competitor to US tech industries.
Huawei is a leader among emerging Chinese competitors in telecoms, electric cars, renewable energy and other fields in which the ruling Communist Party hopes China can become a global leader.
Huawei has 180,000 employees and one of the world’s biggest research and development budgets at more than $15 billion a year. But, like most global tech brands, it relies on contractors to manufacture its products.
Earlier, Huawei announced its global sales rose 13.1 percent over a year ago to $65 billion in the first half of 2020. Yu said that was due to strong sales of high-end products but gave no details.
Huawei became the world’s top-selling smartphone brand in the three months ending in June, passing rival Samsung for the first time due to strong demand in China, according to Canalys. Sales abroad fell 27 percent from a year earlier.
Washington also is lobbying European and other allies to exclude Huawei from planned next-generation networks as a security risk.
In other US-Chinese clashes, TikTok’s owner, ByteDance, is under White House pressure to sell the video app. That is due to fears its access to personal information about millions of American users might be a security risk.
On Thursday, President Donald Trump announced a ban on unspecified transactions with TikTok and the Chinese owner of WeChat, a popular messaging service.