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Huawei warns US restrictions threaten industry worldwide

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Huawei rotating chairman Guo Ping delivered the keynote address at the 17th annual analyst summit.
Huawei rotating chairman Guo Ping delivered the keynote address at the 17th annual analyst summit.

Huawei's rotating chairman Guo Ping has described the past year as a busy and chaotic time for the technology giant, which has found itself at the centre of a trade impasse between China and the US.

Ping was speaking at Huawei’s onsite and online 17th global analyst summit in Shenzhen, China, which takes place amid the latest rule changes to restrictions the Trump administration has imposed on the Chinese ICT provider.

According to the rotating chairman, the company has had to do a lot of clarification and communication with customers and partners, and ensure continued supply. “Over the past year, many technologies became unavailable to us. Despite this, Huawei struggled to survive and is striving to move forward.”

Last year, the US Department of Commerce placed Huawei on the Bureau of Industry and Security's Entity List, citing “national security threats” due to the company’s close ties to the Chinese government. Huawei has vehemently denied installing any backdoors in its networking equipment for alleged government spying.

To mitigate the impact of the entity listing, Huawei has significantly increased research and development investments, Ping revealed.

Battle rages on

Last Friday, the US commerce department announced it is amending its longstanding foreign-produced direct product rule and the Entity List, to narrowly and strategically target Huawei’s acquisition of semi-conductors that are the direct product of certain US technology and software.

The move, according to the department, is to “protect US national security”, adding it serves to cut off Huawei’s efforts to undermine US export controls.

Wilbur Ross, secretary of commerce, says in a statement: “Despite the Entity List actions the department took last year, Huawei and its foreign affiliates have stepped-up efforts to undermine these national security-based restrictions through an indigenisation effort. However, that effort is still dependent on US technologies.

“This is not how a responsible global corporate citizen behaves. We must amend our rules exploited by Huawei and HiSilicon, and prevent US technologies from enabling malign activities contrary to US national security and foreign policy interests.”

In a strongly-worded statement, Huawei has categorically opposed the amendments made by the US Department of Commerce to its foreign direct product rule that target Huawei specifically.

“The US government added Huawei to the Entity List on 16 May 2019 without justification. Since that time, and despite the fact that a number of key industrial and technological elements were made unavailable to us, we have remained committed to complying with all US government rules and regulations.

“At the same time, we have fulfilled our contractual obligations to customers and suppliers, and have survived and forged ahead against all odds.

“Nevertheless, in its relentless pursuit to tighten its stranglehold on our company, the US government has decided to proceed and completely ignore the concerns of many companies and industry associations.

“This decision was arbitrary and pernicious, and threatens to undermine the entire industry worldwide. This new rule will impact the expansion, maintenance and continuous operations of networks worth hundreds of billions of dollars that we have rolled out in more than 170 countries.

“This decision by the US government does not just affect Huawei. It will have a serious impact on a wide number of global industries. In the long run, this will damage the trust and collaboration within the global semiconductor industry which many industries depend on, increasing conflict and loss within these industries.

“The US is leveraging its own technological strengths to crush companies outside its own borders. This will only serve to undermine the trust international companies place in US technology and supply chains. Ultimately, this will harm US interests.”

Ping also commented on the latest amendments, saying: “You may know that on 15 May, the US commerce department modified its foreign direct product rule specifically targeting Huawei. Our business will inevitably be impacted. In spite of that, the challenges over the past year have helped us develop thicker skin. We are confident about finding solutions soon.

“We still haven’t figured it out; the US government persists in attacking Huawei but what will that bring to the world?”

2020 and beyond

Looking ahead, Huawei says it plans to continue investing and innovating in three domains: connectivity, computing and smart devices.

Furthermore, the telecoms company says it will work with customers, partners, standards organisations and all other industry players in domains like supply chain, standards and talent cultivation, to encourage open collaboration, promote inclusive industry development, and explore the future together.

Ping concluded: "Today the world is an integrated collaborative system. The trend of globalisation shouldn't and will not likely be reversed. Fragmented standards and supply chains benefit no one, and further fragmentation will have a severe impact on the entire industry.

“The industry as a whole should work together to strengthen IPR protection, safeguard fair competition, protect unified global standards, and promote a collaborative global supply chain."

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