Caixin
May 16, 2019 08:02 PM
BUSINESS & TECH

China Opposes U.S. ‘Unilateral’ Action Against Huawei

A Huawei smartphone advertisement at a shopping mall in Shanghai on Dec. 6. Photo: VCG
A Huawei smartphone advertisement at a shopping mall in Shanghai on Dec. 6. Photo: VCG

China Ministry of Commerce came out Thursday against an executive order signed by U.S. President Donald Trump that could effectively ban Chinese telecom-equipment makers like Huawei Technologies Co. Ltd. from the American market.

“China is strongly opposed to any country taking unilateral sanctions against a Chinese firm according to their own domestic laws,” Ministry of Commerce spokesperson Gao Feng said in response to a question about the order at a regular press briefing. “We urge the U.S. side to stop its wrong practice, create conditions for normal trade cooperation for companies of the two countries, and avoid further impacts on China-U.S. trade relations. China will take all necessary measures to protect Chinese companies’ legal rights.”

In a separate but potentially more serious move the same day, the U.S. Department of Commerce announced it was putting Huawei on a blacklist that could ban it from doing business with its American suppliers.

Both the executive order and the Commerce Department’s move come as the Trump administration takes a harder line toward Huawei and Chinese technology companies in general.

Some in the U.S. worry that high-tech products from China could cause national security risks. At the same time, the Commerce Department’s move could be in response to Washington’s accusations that Chinese companies including Huawei and rival ZTE Corp. previously sold American technology to Iran in violation of U.S. sanctions.

Trump’s executive order signed on Wednesday declared a “national emergency” in relation to security threats against U.S. telecommunications.

The order didn’t name Huawei directly and only referred to “foreign adversaries.” But most observers believe it was aimed at the company and other Chinese telecommunications-equipment suppliers. It authorized the U.S. Commerce Department to define foreign adversaries and review transactions deemed as posing “risk to the national security.”

Huawei said it is willing to engage with the U.S. government and come up with effective measures to ensure the security of its products.

“Restricting Huawei from doing business in the U.S. will not make the U.S. more secure or stronger,” Huawei said in a statement. “Instead, this will only serve to limit the U.S. to inferior yet more expensive alternatives, leaving the U.S. lagging behind in 5G deployment, and eventually harming the interests of U.S. companies and consumers.”

In response to the executive order, China’s Foreign Ministry accused the U.S. government of abusing its power to crack down on Chinese companies. Such measures are “disgraceful and unjust,” a ministry spokesperson said late Wednesday after Trump’s order was announced.

The Commerce Department announced it was adding Huawei to its “Entity List,” meaning U.S. companies would have to get special licenses to sell their products to the company. Such a requirement would only take effect when listed in the Federal Register. The department did not specify when that would happen.

Cutting off Huawei from its U.S. suppliers could pose serious challenges to the world’s largest telecom-equipment maker. Last year, a similar move forced Huawei’s hometown rival ZTE to temporarily shut down operations before it finally negotiated a settlement with Washington.

The Trump administration’s latest actions come as it lobbies major allies to ban Huawei from participating in their countries’ rollout of next-generation 5G networks. Australia and Japan have joined the U.S. in banning Huawei, though the United Kingdom and Germany have refused to follow suit.

The latest actions also come as trade tensions between the U.S. and China intensified after the former raised tariffs on some $200 billion in Chinese products last week. China responded by announcing its own new tariff hikes.

Additional reporting by Bloomberg

Contact reporter Mo Yelin (yelinmo@caixin.com)

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