Huawei chairman urges US to reconsider ‘attack’ on global supply chain

Huawei’s rotating chairman Guo Ping. (AFP)
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Updated 24 September 2020

Huawei chairman urges US to reconsider ‘attack’ on global supply chain

  • Huawei said that from Sept. 15 it would stop manufacturing its most advanced chips under its Kirin line which power its high-end phones

SHANGHAI: Chinese telecom giant Huawei Technologies said on Wednesday its supply chain was under attack from the US and called on Washington to reconsider its trade restrictions which were hurting suppliers globally.

The world’s biggest maker of mobile telecommunications equipment and smartphones is under pressure from US trade curbs designed to choke Huawei’s access to commercially available chips.

“The US has modified their sanctions for the third time and that has indeed brought great challenges to our production and operations,” Huawei Chairman Guo Ping told reporters in Shanghai.

Washington says Huawei is a vehicle for Chinese state espionage and from Sept. 15 imposed new curbs barring US companies from supplying or servicing the company. Huawei has repeatedly denied being a national security risk.

Guo said that although Huawei had sufficient chips for its business-to-business operations, including its 5G network enterprise, it was feeling the pinch of the US restrictions on its smartphone chip stocks.

It understood that suppliers such as Qualcomm were applying for US licenses which would allow them to continue serving Huawei, he added.

Intel has already received licenses to supply certain products to Huawei, while China’s Semiconductor Manufacturing International Corp, which uses US-origin machinery to produce chips for Huawei, has applied for a license, Reuters has previously reported.

Huawei was willing to use Qualcomm chips in its smartphones should Qualcomm get a license to sidestep the restrictions, Guo added. Qualcomm did not immediately respond to a request for comment.

“We hope the US government can reconsider its policy and if the US government allows it we are still willing to buy products from US companies,” Guo said on the sidelines of its annual Huawei Connect conference.

Huawei has said that from Sept. 15 it would stop manufacturing its most advanced chips under its Kirin line which power its high-end phones. Analysts expect its existing supply of Kirin chips will run out next year.

Consumers have rushed to buy Huawei phones amid concerns its mobile division is about to fold. Vendors say that prices have spiked by as much as 500 yuan ($74) for some devices.

Washington has shown little sign that it is willing to back down from its fight with Huawei, which comes at a time when relations between the US and China are at their worst in decades.

The United States said last month it would expand a program it called “Clean Network” to prevent various Chinese apps and telecoms companies from accessing sensitive information on American citizens and businesses.

David Wang, a Huawei executive director, said that the company hoped that countries would introduce “rational standards” for 5G. Huawei had yet to see any adverse impact on its global 5G business from the US program, he said.


‘The stock market, stupid’ — Trump’s claim is looking hollow 

Updated 29 October 2020

‘The stock market, stupid’ — Trump’s claim is looking hollow 

  • The timing of the Wall Street downturn is the worst possible for the incumbent, who has declared every new peak in the S&P as a personal victory throughout his presidency
  • The likes of Apple, Amazon, Alphabet and Facebook are due to declare their earnings for the third quarter, and how those numbers are received could give the indices a boost

Before the US election of 1992, candidate Bill Clinton summed up what he saw as the reason he would become president: “It’s the economy, stupid.” He was proved right as voters disowned the economic policies of President George H.W. Bush in their droves to elect Clinton. 

Until the COVID-19 pandemic began to ravage the US economy in March, President Donald Trump would have been able to make the same claim. For the four years of his presidency, the US economy had continued the progress initiated by his predecessor to recover from the 2009 global financial crisis.

By most measures — growth, employment, inflation — the Trump years had been good, and those on the top of the pile had even more reason to be grateful thanks to the big tax cuts he had made a flagship policy.

The pandemic changed all that in the space of a few weeks as lockdown measures shocked the economy. Jobless claims soared to all-time records, bankruptcies and closures affected large swathes of American business, and gross domestic product collapsed. The International Monetary Fund forecasts that the American economy will shrink by 4.3 percent this year.

But Trump could still claim instead that “it’s the stock market, stupid” as a reason he could be re-elected. Mainly because of the trillions of dollars injected into the economy in the form of fiscal stimulus, US share indices had swum against the economic tide.

The S&P 500 index hit an all-time high in September, allowing Trump to boast that under his administration, investors and the millions of people whose livelihoods depended on the financial industry had never had it so good.

Now, it looks as though even that final claim is looking more fragile. For the past couple of days, US and European stock markets have gone into reverse as investors took fright at the rising number of COVID-19 cases and the re-imposition of economic lockdowns in many countries.

Trump might argue, with a little justification, that Wall Street is worried about the prospect of Joe Biden being elected president by the end of next week. Certainly the contender, by definition, is something of an unknown quantity in terms of economic policy.

He is also known to favor some policies — such as tighter regulation on environmental sectors, more spending on health care, and higher taxes for federal services and projects — that have traditionally been regarded as contrary to the philosophy of “free market” America.

In particular, the energy industry is worried about possible restrictions on shale oil and gas production that Biden and his “green” team are believed to favor. However, it should be pointed out that the Democratic candidate has specifically said he will not ban shale fracking, as some environmentalists want.

In any interesting side-story, the state of Texas — one of the biggest in terms of electoral college votes — would seem to have more to lose than any other if the energy scare stories about Biden were true. Yet the contest there between Democrats and Republicans is the closest it has been for decades, according to opinion polls.

The timing of the Wall Street downturn is the worst possible for the incumbent, who has declared every new peak in the S&P as a personal victory throughout his presidency and a sign of his deal-doing prowess. If even this claim is denied to him in the final week of campaigning, it would make the uphill battle against the polls even more difficult.

There is a chance that Big Tech might offer some relief. The likes of Apple, Amazon, Alphabet and Facebook are due to declare their earnings for the third quarter, and how those numbers are received could give the indices a boost, given that they were the ones largely responsible for the big market gains earlier in the year.

But for Trump, any such respite might be too little, too late. It looks as though Wall Street and Main Street are finally catching up in their gloom, and there is nothing the president can do about it.