US, China dig in heels on Huawei as tech war intensifies

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US Secretary of State Mike Pompeo speaks at the State Department in Washington in this April 8, 2019 file photo. — AFP

WASHINGTON — The United States and China hardened their stands over Huawei on Thursday as Washington brushed aside claims of "bullying" and accused the Chinese tech giant of misrepresenting its ties to the Beijing government.

The world's top two economies stepped up their rhetoric following President Donald Trump's decision to blacklist the smartphone and telecom firm over worries that Beijing uses it as a tool for espionage.

US Secretary of State Mike Pompeo claimed in an interview that Huawei is not truthful about its relationship with China's government and that this means any data touched by the company is "at risk" of falling into the wrong hands.

"To say that they don't work with the Chinese government is a false statement," Pompeo said of Huawei.

The company "is deeply tied not only to China but to the Chinese communist party," the top US diplomat told CNBC, disputing Huawei's claims that it has no direct relationship with Beijing.

"The Huawei CEO — on that, at least — isn't telling the American people the truth."

On Wednesday, Chinese Foreign Minister Wang Yi warned that Beijing was ready to "fight to the very end" in its trade war with Washington.

"The US use of state power to arbitrarily exert pressure on a private Chinese company like Huawei is typical economic bullying," Wang said.

China's commerce ministry spokesman Gao Feng said Beijing has lodged "solemn representations" with Washington, and warned that the country has the "confidence and ability to protect the lawful rights and interests of Chinese companies."

US lawmakers appeared to rally around Washington's position with a bipartisan proposal to help telecom networks remove Huawei as they upgrade to 5G systems.

The bill is aimed at preventing "companies subject to extra-judicial directions of a foreign adversary to infiltrate our nation's communications networks," said Senator Mark Warner, a Democrat.

"5G networks need to be robust and secure, and not rely on equipment or services that pose a national security risk," said Republican Senator Roger Wicker.

Companies around the world were scrambling to comply with the US blacklist, which would prevent them from supplying American technology components or software to Huawei.

Japan's Panasonic was the latest to announce it would suspend transactions with Huawei. But when asked for a response, Huawei pointed to a statement on Panasonic's Chinese website that said the firm was supplying Huawei "normally."

Japanese firm Toshiba said it had resumed shipment of products to Huawei hours after announcing a temporary halt to check whether US-made parts were involved.

Major Japanese and British mobile carriers said this week they would delay releasing new Huawei handsets as a result of the US sanctions.

In the US, equipment makers Inphi Corp, Qorvo, Neophotonics and Rogers Corp. all said they would see lower sales due to the Huawei sanctions.

Last week, Trump declared a national emergency to bar US companies from using foreign telecom equipment deemed a security risk -- a move seen as targeting Huawei, which Washington suspects of being a potential proxy for Chinese intelligence services.

The Commerce Department has also announced a ban on US companies selling or transferring technology to Huawei, though it later issued a 90-day reprieve.

Google said it would cut off Huawei devices from some services on the Android operating system.

Huawei has since indicated that it could roll out its own mobile this year in China and internationally next year.

Analyst Richard Windsor, who writes the Radio Free Mobile tech blog, said Huawei's prospects without Google are limited.

"Whatever alternative Huawei comes up with for Google's digital ecosystem is extremely unlikely to be able to prevent an almost complete loss of market share in markets outside of China," Windsor said.

A long-simmering US-China trade dispute has snowballed into a tech war, with Huawei at the epicenter of a battle for supremacy in technologies that could shape the future of the world economy.

British carrier EE, owned by BT, had been due to release Huawei's first 5G phone, the Mate 20X, but chief executive Marc Allera said Wednesday the company had "paused" the launch.

Vodafone soon followed suit, announcing a temporary suspension of pre-orders for Huawei handsets.

Japan's KDDI and SoftBank Corp, the country's number two and number three carriers respectively, said they were delaying the release of Huawei devices.

ARM, the British firm that designs processors used in most mobile devices, also cut ties with Huawei.

The ARM announcement "is really a death knell for Huawei's device business," said Avi Greengart of the consultancy Techsponential.

"While Huawei might have been able to bypass Qualcomm and make its own processors and modems, it cannot sell smartphones with unlicensed IP outside China." — AFP

GOOGLE

By Rob Lever, with Ryan McMorrow and Laurent Thomet in Beijing


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