Amid Washington’s crackdown on the Chinese telecom firm, the US barred American firms from selling components to Huawei and its affiliates without a government license, adding it to a trade blacklist last month. The tech giants, tied closely with the Chinese market, are now facing pressure from both superpowers.
Chinese officials have warned US giants, including Microsoft and Dell, as well as major tech companies from other countries, namely, Britain’s semiconductor maker Arm and South Korean SK Hynix and Samsung, about punishment for cooperating with Washington’s ban on trading with Chinese firms, The New York Times reports. The Asian powerhouse’s government held special meetings several days ago following an announcement that they intend to blacklist “unreliable” firms and individuals, according to sources familiar with the situation, cited by the US outlet.
China’s central economic planning agency and the National Development and Reform Commission are reported to have led the gathering. Officials from the country’s Ministry of Commerce and Ministry of Industry and Information Technology also reportedly attended the meeting and addressed the tech exporters.
According to the publication, Beijing warned that the companies could be punished if they attempt to pull their production from the Asian country, which over the years has turned into a cornerstone of operations for many transnational firms.
American conglomerates are said to have been warned about permanent consequences if they support the US policy and given thinly veiled hints to use lobbying efforts to thwart Trump’s policy. Meanwhile, non-American companies have been promised “no adverse consequences” if they continue to cooperate with China, the US outlet reported. Microsoft, Arm, and Dell declined to comment while Samsung, SK Hynix as well as Chinese officials did not respond to the corresponding requests.
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The row between the US and China over its tech giant escalated in mid-May, when US President Donald Trump issued an executive order blacklisting Huawei and its 70 affiliates, thereby banning American companies from selling components to the Shenzhen-based firm without a government license.
The US attempted to justify its actions by claiming that Huawei was working in collaboration with the Chinese government and spying on its users at Beijing’s behest.
Mike Pompeo, US Secretary of State and a former CIA chief, earlier indicated that there is credible intelligence fueling concerns about Huawei.
“One can’t have private information flowing across a network that has access and control from the Chinese government”, he said.
However, both the company and Chinese authorities have vehemently denied the allegations on several occasions and slammed them as unsubstantiated.
“We would very much like the US to provide us with at least some evidence [supporting their statements regarding Huawei]… Sometimes they try to use the so-called ideological issue and try to exaggerate the relationship between Chinese business and the government”, Chinese Foreign Ministry spokesman Lu Kang said recently.
The refuted claims did not stop many US companies from acting in accordance with Washington’s blacklist. Google suspended operations with Huawei, including the transfer of all hardware, software, and technical services, except those publicly available via open source licensing, on 20 May. Panasonic, NTT Docomo of Japan, as well as chip companies such as ARM, Intel, and Qualcomm followed suit and halted their business ties with the Chinese firm.
Digital Cold War Started?
According to Professor Keith Richburg, a journalist and director of the Journalism and Media Studies Center at the University of Hong Kong, the actions by the US toward Huawei may amount to the start of a “Digital Cold War”, with Google planning to stop its operating systems support for Huawei and reports that Facebook will cease pre-loading its Facebook, Instagram and WhatAspp apps on Huawei devices.
“Just like in the old Cold War days, when countries had to choose between the U.S. and the Soviet Union, countries now may be asked to decide whether they want to go with American technology and the American digital ecosystem, or the Chinese technology and ecosystem. It’s not a choice many countries would want to make. But it may become increasingly difficult for countries to stay neutral and avoid taking sides.”