China criticizes US action against Huawei


President Donald Trump's new order effectively blacklisting Huawei, the Chinese telecommunications networking equipment maker and smartphone giant, from the USA market will not hurt America in the race to build out next-generation 5G wireless technology, a well-known CEO and a top telecom investment banker who did not want to be identified told CNBC on Friday. It said it was adding Huawei and 70 affiliates to a list that will ban it from acquiring components from US companies without the approval of the USA government.

The ban is not yet effective.

"China has emphasised many times that the concept of national security should not be abused, and that it should not be used as a tool for trade protectionism", Gao Feng, spokesman at the Chinese commerce ministry, told reporters.

The ban against the company will likely put a significant dent in Huawei's aspirations for global expansion.

In recent months, the USA government has taken a number of steps against the firm, including getting Canadian authorities in December to arrest Huawei CFO Meng Wanzhou over allegations of defrauding several banks by concealing payments from Iran in violation of US sanctions.

This effectively means that no US company can sell or transfer technology to Huawei without first obtaining a license from the BIS.

Why UK plans to use Huawei tech in 5G networks despite U.S. pressure A complex set of considerations will have informed the UK's decision-making around 5G. Companies like Samsung, LG, and Oppo have revealed they intend to ... While the document doesn't name any specific company, Huawei is clearly a suspect.

Revenue for the company, also the world's second-biggest maker of smartphones, touched 721 billion yuan ($105 billion) past year, eight times ZTE's and half the annual sales of South Korea's Samsung Electronics Co.

Telecom companies including Sweden's Ericsson and Finland's Nokia have been vying with Huawei to set up the world's first 5G networks, the next generation in mobile data infrastructure.

"They can relatively better manage component sourcing for mobile phones because they have their own component businesses for smartphones".

Huawei has called the ban unfair and "in no one's interest", reports NPR.

In what some have compared to the Cold War arms race, the United States is anxious that 5G dominance would give any global competitor such as China an advantage Washington is not ready to accept.

Sir Richard said the government - which has been seeking to build economic links with China - should not be influenced by fears of economic reprisals by Beijing if Huawei is excluded.

South Korea's Samsung dropped 2.4%, SK Hynix fell 3.5%, while China's Luxshare Precision Industry fell as much as 6.1%.

Commerce Secretary Wilbur Ross said the United States will not cave in to Chinese telecom giant Huawei. Alternatively, the company will resort to its "contingency plan. What we have prepared has already been used in some of our products in the Chinese market".

And as CNN notes, the order could also harm smaller American telecom companies, especially those in rural and underserved areas, that rely on low-priced providers like Huawei.

The ZTE case led to some "benefits" and "external pressures have developed into internal drivers" in China, said Wan Gang, vice chairman of China's parliamentary advisory body.

Writing in the Evening Standard on Wednesday, Liu Xiaoming, China's ambassador to the United Kingdom, said China did not want a trade war but was "not afraid of one and would fight one if necessary".

Huawei, founded in 1987 by a former engineer in China's People's Liberation Army, denies it spies for Beijing, says it complies with the law and that the United States is trying to smear it because Western companies are falling behind.

The Trump administration's rhetoric towards China had cooled in recent days after another round of tariffs between the world's top two economies and a selloff on global stock markets.

President Trump's executive order did not go as far as to name any companies or countries specifically but it will likely do the opposite of improving relations between the USA and China.

The ban on Huawei, which has yet to take effect, would also affect the USA companies who conduct business with Huawei.

China believes tariffs were the genesis of the trade dispute, and that all tariffs must be eliminated in order to reach a deal.