See More on Facebook

Business, Opinion

Xi-Trump meeting a welcome relief for Huawei

The company has been under pressure due to US sanctions.


Written by

Updated: July 2, 2019

One of the most encouraging signs that emerged from the meeting between President Xi Jinping and US President Donald Trump on the sidelines of the G20 Summit in Osaka on Saturday was the softening of Trump’s stance on the sanctions the US administration had imposed on Chinese telecommunications equipment provider Huawei. Trump said US companies can continue selling telecom components to Huawei.

If US companies indeed continue selling telecom components to Huawei, it will come as a big relief to the world at a time when the international community fears the “technology decoupling” of world’s largest and second-largest economies could undermine global technological development, especially the commercialization of 5G technology, in which Huawei is a leading global player.

Previously the US administration was reportedly mulling banning 5G telecom equipment designed and manufactured in China, including those made by multinational companies such as Ericsson and Nokia, from the US market.
The fact is, as a global leader in 5G, Huawei is too big to fail. After the US administration banned American companies from selling chips to Huawei and other Chinese companies, Silicon Valley has suffered as much, if not more than, Huawei. Besides, some companies continued to supply chips to Huawei via their overseas branches in order to avoid violating the US ban.

Hopefully, the Xi-Trump meeting and the likely resumption of trade talks between China and the US will prompt Washington to adopt a consistent and the right approach toward Chinese high-tech companies, not least because China tends to treat all companies, domestic as well as foreign, equally.

For example, with research and development centers and manufacturing bases in China, Ericsson and Nokia have won big contracts in the just launched bid for 5G network devices. These companies have been supplying to markets and serving telecom operators and enterprises across the globe, by capitalizing on China’s skilled workforce, world-class infrastructure and complete industrial chain.

Yet, if the US does not lift the ban, such companies would have to endure higher production costs. They could even be forced to transfer their businesses out of China, although both Ericsson and Nokia claim they can operate production bases in other countries despite the higher costs, due to the flexible supply chain.

Worse, disruptions in production and supply would slow the pace of 5G’s commercialization worldwide, including in the US. As a 5G technology leader, Huawei has set up 14 R&D and 36 joint innovation centers around the world, joined more than 400 standards organizations, industrial alliances and open source communities.

Also, nearly half of Huawei’s revenue comes from overseas and more than 70 percent of its employees are local recruits. And 33 of its 92 core suppliers, as disclosed by Huawei late last year, are US enterprises including chip-making companies Broadcom, Qualcomm, Micron, Intel, Texas Instruments and NVIDIA Corporation, and software vendors Google and Microsoft.

In 2018, Huawei spent $70 billion on procurement of parts, of which $11 billion went to US companies. So a US technology export ban would not only affect Huawei’s operations but also drag down the US companies’ stocks.

As 3GPP, a standards organization, said, banning Huawei, its most important contributor, from relevant discussions on technology could lead to the organization’s breakdown and thus create grave uncertainties for the development of 5G standards.

On the other hand, the change in the attitude of some international organizations including the lawsuit filed by Fed-Ex, which redirected two Huawei parcels to US addresses, against the US Commerce Department reflect the previous US ban on Huawei and other Chinese companies did disrupt normal business cooperation.

It’s time the US realized the importance of cooperation with economies such as China, which is home to companies such as Huawei.

The global telecom sector is large enough to accommodate both China and the US, especially as each has its own unique advantages, said Ren Zhengfei, the founder of Huawei. And only through cooperation can Chinese and US companies sharpen their competitiveness, build a win-win relationship, and pave the way for a bright future for the global digital economy.

The author is a professor at the School of Public Policy and Management, Tsinghua University, and deputy director of China Institute for Science and Technology Policy at Tsinghua University.



Enjoyed this story? Share it.


China Daily
About the Author: China Daily covers domestic and world news through nine print editions and digital media worldwide.

Eastern Briefings

All you need to know about Asia


Our Eastern Briefings Newsletter presents curated stories from 22 Asian newspapers from South, Southeast and Northeast Asia.

Sign up and stay updated with the latest news.



By providing us with your email address, you agree to our Privacy Policy and Terms of Service.

View Today's Newsletter Here

Business, Opinion

After 19 yrs, polio back in PH

The anti-vaxxer movement has done it again. The Philippines is in the midst of a polio epidemic 19 years after it was declared polio-free, Health Secretary Francisco Duque III announced on Thursday. Polio is a crippling and at times fatal infectious disease. (See In the Know.) Duque said a single confirmed case signaled an epidemic in a once polio-free country. He said a 3-year-old girl from Lanao del Sur was diagnosed with a vaccine-derived polio virus type 2. The Department of Health (DOH) is awaiting confirmation of a suspected case of acute flaccid paralysis (AFP). Rabindra Abeyasinghe, country representative of the World Health Organization (WHO), noted that the type 2 polio virus had not been in circulation for many years and was certified eliminated in the Philippines. Metro Manila, Davao “[S]o the vaccination program that the DOH and other co


By Philippine Daily Inquirer
September 20, 2019

Business, Opinion

India bans e-cigarettes

The decision has been met with criticism and charges of favouritism. The Union Cabinet’s move on Wednesday clearing an ordinance for banning production, import, distribution and sale of electronic cigarettes and proposing a jail term and fine for its violators evoked mixed reactions among a section of Delhi doctors and other stakeholders. The Centre’s decision was slammed by trade bodies and certain stakeholders related to e-cigarettes, who reportedly alleged that it was a “draconian” move taken hastily in the interest of the conventional cigarette industry. They also charged that the government was depriving people of a safer alternative to smoking. Dr Gyandeep Mangal, senior consultant in Respiratory Medicine, Sri Balaji Action Medical Institute, said, “We are glad with the ban on e-cigarettes by Union Cabinet as these are as harmful as regular cigarettes. It is true that e-cigarette doesn


By The Statesman
September 19, 2019

Business, Opinion

Japan officially removed from South Korea’s whitelist

Seoul has threatened the move for weeks. South Korea excluded Japan from its export controls whitelist Wednesday in retaliation for Tokyo’s earlier decision to remove Seoul from its list of favored trade partners, as bilateral relations have slumped to the lowest levels since normalizing diplomatic ties in 1965. “The Ministry of Trade, Industry and Energy has published the revision of the nation’s trade controls on strategic items in an official gazette and it took effect from Wednesday,” said the ministry spokesperson through a statement. Since the Aug. 12 announcement by Industry Minister Sung Yun-mo that Korea would drop Japan as a preferred trading partner, the ministry has completed the necessary administrative steps, such as soliciting opinions from the public and submitting the revised rules to the Office of Legislation for review. “We have received opinions from the public throu


By The Korea Herald
September 18, 2019

Business, Opinion

Rohingyas inside Myanmar still facing genocide threat: UN report

The report outlines a grim future for 600,000 or so Rohingya still trapped in Myanmar. Around 600,000 Rohingyas remaining inside Myanmar face systematic persecution and live under the threat of genocide, said the Independent International Fact-Finding Mission on Myanmar in a new report published today. “The threat of genocide continues for the Rohingyas remaining in Myanmar,” said Marzuki Darusman, chair of the Fact-Finding Mission. The Mission, which was formed by the UN Human Rights Council in March 2017, last year said its investigation had found “genocidal acts” in Myanmar’s “clearance operations” in 2017 that killed thousands and caused more than 740,000 Rohingyas to flee to Bangladesh. “Myanmar is failing in its obligation to prevent genocide, to investigate genocide and to enact effective legislation criminalizing and punishing genocide,” Darusman said.


By Daily Star
September 17, 2019

Business, Opinion

South Korea and Japan have more in common than they think

Republished with permission for Asia News Network members by The Brookings Institution. With South Korea’s decision to scrap the 2016 military intelligence sharing agreement with Japan, the two sides have dramatically aggravated their fraught relationship. Bilateral ties had never been great, but in the past several weeks, a trade spat has snowballed into a confrontation that apparently has yet to reach rock bottom. Last month, Tokyo decided to remove South Korea from its list of favored trading partners, which includes the United States, Germany, France, and two dozen other countries, placing export curbs on industrial and high-tech p


By Asia News Network
September 16, 2019

Business, Opinion

The foreigner who stoked political chaos in Malaysia

For Asia News Network Editor’s Circle by Chong Lip Teck of Sin Chew Daily. Controversial Indian Muslim preacher Zakir Naik is on the wanted list in India due to his extreme religious remarks and alleged involvement in money laundering. Many Muslim countries have denied him entry. But in Malaysia, he is well received by the Pakatan Harapan (PH) government. Within the coalition, however, there is a split because of him. The ground sentiment is also divided into two, on  racial and religious lines. One side has defended him while the other side asked for his repatriation. As a Muslim preacher, Zakir Naik is popular in the Muslim community. He has his charm. While promoting Islam, he would  downgrade other religions, especially the Hindus and Christians. But, as a guest in Malaysia, he has crossed the red line. If he is merely promoting Islam, no one is against him. But he insults other religions in his sp


By ANN Members
September 16, 2019