Caixin
Jan 28, 2019 04:52 PM
YOUR BRIEFING

Monday Tech Briefing: Trump Administration Pushes Allies to Isolate Huawei

1. U.S. Pressures Allies to Ban Huawei From 5G Projects

The Trump administration is putting pressure on U.S. allies like the U.K. and Poland to ban Huawei Technologies Co. Ltd. and other Chinese tech firms from building 5G infrastructure in their countries, the New York Times reported.

In recent months, the White House has been drafting an executive order to stop U.S. companies from using Chinese equipment in critical networks.

Huawei has been trying to break into the American market for years, but has failed almost every time as U.S. suspicions about the company have grown. Last month, Huawei’s chief financial officer, Meng Wanzhou, was arrested in Canada at the request of the U.S. on charges related to violating American sanctions on Iran. (NYT)

2. Vodafone Suspends Putting Huawei Gear in Its Core Network

Vodafone Group, one of the world’s largest telecom operators, has barred Huawei equipment from its core network until Western governments give Huawei full security clearance, Reuters reported.

Vodafone’s CEO Nick Read on Friday called concerns about Huawei “too simplistic,” noting that Huawei was an important player in the telecommunications equipment market.

The news comes amid tough times for Huawei. Due to national security concerns, several countries including the U.S. and Australia are trying to block the company from working on their network infrastructure. (Reuters)

3. BT First Foreign Telecom to Receive China Licenses

British Telecommunications PLC (BT) announced Friday that it has become the first international telecommunications company to receive nationwide licenses from the China Ministry of Industry and Information Technology.

The nationwide Domestic IP-VPN license and China nationwide Internet Service Provider (ISP) license permit BT China Communications Ltd. to serve Chinese customers directly and bill them in yuan.

It marks a big step forward in opening up the Chinese telecommunications market to foreign companies. (Company announcement)

4. Chinese Chipmaker to Challenge U.S. Export Ban

Fujian Jinhua Integrated Circuit Co. Ltd., a Chinese chipmaker accused of stealing American trade secrets, plans to appeal a U.S. ban on technology exports that’s frozen its business.

The state-owned manufacturer of memory chips was listed by the U.S. Department of Commerce for an export ban in late October. The department accused the company of producing products whose technology most likely originated from the U.S., threating the long-term economic viability of domestic U.S. suppliers to the country’s military.

In early November, Jinhua was charged along with Taiwanese partner United Microelectronics Corp. (UMC) with conspiring to steal intellectual property from Micron Technology Inc. Both companies have since denied the allegations. (Caixin)

5. Starbucks Coffee Sales Cool in China, but Higher Prices Hold Up Revenue

China’s cooling economy may have sent a chill into coffee cups.

Starbucks, the world’s largest coffee chain, said its same-store revenue rose 1% for the quarter that ended Dec. 31, as higher prices offset lower coffee sales.

The marginal revenue gain compares with an 8% jump in the previous quarter and a 6% increase in the same period a year ago. The number of transactions fell 2%, according to the company’s earnings report.

The U.S. coffee chain added almost 600 stores in China in the past year, bringing the total to 3,684. Starbucks faces growing competition in China from domestic rivals such as Luckin Coffee. (Caixin)

6. Apple Suppliers Moving off Mainland at Faster Pace as Trade Tensions Mount

Apple Inc. supplier Hon Hai Precision Industry Co. Ltd., known also as Foxconn, said over the weekend that it’s investing more than $200 million in India and Vietnam, Bloomberg reported.

On Sunday, smaller Apple supplier Pegatron Corp. said it is transferring some manufacturing capacity to Indonesia as it gets hit by rising U.S. tariffs on Chinese imports. Pegatron added that it is also looking in Vietnam and India.

The moves by the two manufacturers, which assemble a large variety of electronics including the iPhone, offer a glimpse into how other tech manufacturers might respond to the China-U.S. trade conflict. China announced last week that its economy grew 6.6% last year, down from 6.8% in 2017. U.S. President Donald Trump then urged Beijing to acquiesce to American trade demands and credited China’s slower growth to his administration’s trade policies. (Caixin)

Compiled by Ye Zhanqi

Contact editor Michael Bellart (michaelbellart@caixin.com)

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