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The US government saw Huawei as a serious national security threat, with the risk that Beijing could use the company’s technology to spy on American companies and individuals and steal their secrets. Photo: AP

Global Impact newsletter: Huawei finds itself in the eye of the US-China tech storm

  • Global Impact is a fortnightly curated newsletter featuring a news topic originating in China with a significant macro impact for our newsreaders around the world
  • In this sixth edition we look at Chinese telecommunications giant Huawei and how it came to be at the centre of the rapidly escalating US-China rivalry over technology
Huawei
Ren Zhengfei, the founder of Huawei Technologies, said the name for his company came from a slogan he saw on a wall, meaning “China has promise”.
And for many years, Huawei rapidly fulfilled that promise, becoming the largest manufacturer of telecommunications equipment in the world and the leader in next-generation 5G mobile communications technology.
But then the competition between the US and China to control 5G short-circuited its ascent. The cutting-edge technology promises to dramatically speed up mobile communications and usher in a new interconnected Internet of Things – from your car to your refrigerator – all controlled through your mobile phone.
The US government saw Huawei as a serious national security threat, with the risk that Beijing could use the company’s technology to spy on American companies and individuals and steal their secrets. Huawei has denied it is a security risk and founder Ren said the clash with the US over 5G was “inevitable”.
The US Commerce Department made Huawei one of the initial entries on its “Entity List”, banning US firms from doing business with it without a special licence. And the US-China tech war was under way.
The conflict expanded into the diplomatic sphere with the arrest of Huawei’s chief financial officer Meng Wenzhou, Ren’s daughter, in Vancouver in December 2018 at the request of the US on charges that she conspired to violate US sanctions against Iran. Meng’s bitter fight to avoid extradition to the US has hurt China’s relations with Canada, with China’s seizure of two Canadian citizens on charges of espionage widely seen as retaliation for Meng’s arrest.
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The US-China tech war has since expanded to other Chinese companies, but Huawei remains the main US target and the subject of constant debate on both sides of the Pacific. The US government has effectively banned use of Huawei technology in the United States and has pushed its allies in Europe and Canada to do the same. Other countries – including India, Brazil and Singapore are under pressure to shun Huawei technology or have decided to do so. But given the low cost and quality of Huawei equipment, the company is making headway in other countries, particularly in Africa.
Can Huawei survive without access to US technology, particularly top-of-the-line semiconductors? Can China build its own end-to-end technology sector to avoid US sanctions? These questions will take years to answer but one thing is clear. Technology trade between the US and China, and Huawei’s place in it, will never be the same.

60 second catch-up

Deep Dives

The US vs a Chinese giant: Huawei and the tech war

  • This is the first in an eight-part series looking at how Huawei has found itself at the epicentre of the US-China tech war
  • Four years after Huawei set up shop in the US, a RAND report tied Chinese telecommunications companies like Huawei and ZTE directly to Beijing
Like many Chinese entrepreneurs, Huawei Technologies’ founder Ren Zhengfei knew he would have to crack the US market before the company could truly become a global operation.

Ren, who studied the management techniques of US tech giants like IBM, had been trying to make headway in the US since the early 2000s but was getting resistance from lawmakers there who viewed the company as an extension of Chinese government intelligence efforts.

Read the full story here.

05:11

Huawei founder shares his relationship with family and his personality

Huawei founder shares his relationship with family and his personality

What you need to know about US restrictions on Huawei

  • The Entity List is over 270-pages long and lists companies and individuals from a range of countries including Russia, China, Ukraine, Iran and even the Britain

1. What is the US Entity List and why is Huawei on it?

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The US Entity List, published by the US Department of Commerce, contains a list of certain foreign persons – which includes businesses, research institutions, governments and individuals – that are subject to licence requirements for the export, re-export and transfer of certain items to the country. Essentially, the list represents a list of companies that the US believes poses a national threat.

Read the full story here.

01:17

Pompeo urges all nations to 'push back' against China on visit to the UK

Pompeo urges all nations to 'push back' against China on visit to the UK

Video: Spy case against two Canadians in China for ‘political gains’, says Trudeau

  • Video of Canadian Prime Minister Justin Trudeau talking about China’s detention of two Canadians.

01:27

Spy case against two Canadians in China for 'political gains', says Trudeau

Spy case against two Canadians in China for 'political gains', says Trudeau

US further tightens restrictions on Huawei’s access to chips

  • Under new rules issued by the Commerce Department, any company that sells Huawei any products made anywhere with US technology will require a licence
  • The Trump administration has also pressured other governments to restrict Huawei from building their 5G networks

It just got even harder for Huawei Technologies to obtain US-made chips.

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Under new rules issued by the US Commerce Department on Monday, any company that sells Huawei any products made anywhere with US technology will require a licence. The measures are to prevent Huawei’s efforts to evade US export controls by obtaining electronic parts through third parties.

Read the full story here.

03:29

China says UK has 'poisoned' Sino-British relationship over Hong Kong and Huawei

China says UK has 'poisoned' Sino-British relationship over Hong Kong and Huawei

Video: UK bans Huawei from 5G network after US sanctions

Video showing UK Culture Secretary Oliver Dowden announcing Huawei Technologies equipment will be banned from Britain’s 5G network.

02:27

UK bans Huawei from 5G network after US sanctions

UK bans Huawei from 5G network after US sanctions

EU is moving closer to Washington’s position on Beijing threats, Trump administration official says

  • John Demers, who heads the Justice Department’s counter-espionage effort, says ‘Hong Kong and the Uygurs have been the biggest issues’ for Europe
  • The US is working with European partners to develop digital standards to address ‘the long-term threat to data privacy, security and human rights

China’s recent actions in Hong Kong and the Xinjiang Uygur Autonomous Region have driven European countries closer to Washington’s position about dangers posed by Beijing, the US assistant attorney general for national security said on Wednesday.

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“Hong Kong and the Uygurs have been the biggest issues … in my discussions with the Europeans,” said John Demers, who heads the Justice Department’s counter-espionage effort, known as the China Initiative.

Read the full story here.
Global Impact is a fortnightly curated newsletter featuring a news topic origniating in China with a significant macro impact for our newsreaders around the world. Sign up now!
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