WASHINGTON - When Joe Biden took office as president, the Chinese telecommunications firm Huawei Technologies saw at least a glimmer of hope that the U.S.-led campaign to shut it out of international markets might be eased somewhat.
Once a global leader in smartphone sales, Huawei has seen its market share outside China plummet since the Trump administration began choking off its supply of technology key to producing modern 5G handsets. Likewise, the company’s business installing mobile telecommunications infrastructure, and especially new 5G-capable systems, has been severely damaged by a U.S. campaign against it.
Biden had not signaled that he would be particularly easy on China -- his appointment of China hawk Katherine Tai as U.S. Trade Representative confirmed that. But Huawei and other Chinese firms thought that, if nothing else, the two countries could step back from a Trump-era trade war footing.
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Biden tightens restrictions
Earlier this month, Huawei’s prospects for relief dimmed considerably when the Biden administration announced that it would not only continue some of the Trump administration’s export bans, but would tighten them.
“The Biden administration appears to be maintaining the final Trump policy regarding which Huawei-related export licenses to approve or deny, which is more restrictive than the 2020 license policy,” said Kevin Wolf, a former assistant secretary of commerce for export administration in the Commerce Department’s Bureau of Industry and Security.
Now a partner with the law firm Akin Gump in Washington, Wolf added, “In order to make the license policy consistent and level the playing field, it has amended 2020 licenses limiting their scope so that they align with the final Trump license policy. In particular, licenses for shipments for items ‘for use in or with 5G devices’ will be denied or revoked.”
Contentious Meeting
Additionally, on the eve of the first high-level meeting between Biden administration officials and representatives of Beijing, the Commerce Department announced that it had issued subpoenas to a number of Chinese companies as part of an investigation into national security threats.
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The action stemmed from a 2019 executive order by Trump allowing the executive branch to prohibit purchases of technology deemed to present a national security threat. The Commerce Department did not name the companies it is investigating, but many experts assume that Huawei was among them.
The next day, in a contentious meeting with Secretary of State Antony Blinken, Yang Jiechi, director of the Central Foreign Affairs Commission Office of the Chinese Communist Party, blasted the U.S, saying, “It abuses so-called notions of national security to obstruct normal trade exchanges, and incite some countries to attack China.”
Origins of ban
Beginning in fits and starts in 2019, a broad swath of export bans eventually cut Huawei off from an array of technologies that had been essential to the company’s operations.
The U.S. push began partly in response to then-President Trump’s lengthy trade battle with China, and partly in response to very real national security concerns related to allowing Huawei to become a dominant player in global 5G -- the next generation technology standard for broadband cellular networks.
U.S. intelligence agencies have long asserted that Huawei is closely connected to the Chinese government. That, combined with the fact that Chinese law specifically requires companies to cooperate with the country’s intelligence services in collecting data, pushed U.S. officials to warn that Huawei components could potentially be used to create “backdoor” access for Beijing into sensitive government and private sector systems.
Huawei says, ‘yes’
Huawei officials have repeatedly expressed their frustration at being publicly treated as an arm of the Chinese government. Last week Andy Purdy, chief security officer for Huawei Technologies USA, told Bloomberg News that if the Biden administration is concerned about the company, “we hope that the U.S. government will partner with us and not point to the Chinese government, because Huawei speaks for Huawei.”
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Many industry experts, though, remain very dubious about the company’s protestations of independence.
“The Chinese government may not speak for Huawei,” said Jim Lewis, senior vice president and director of the Strategic Technologies Program at the Center for Strategic and International Studies. “But when the Chinese government speaks to Huawei, Huawei says, “‘Yes.’”
Broad impact
The Trump administration’s assault on Huawei was scattershot at times, but ultimately it was brutally effective.
All Huawei phones had used the Android operating system made by Google, but in May of 2019, Google announced that it would comply with the administration’s order and refuse to license its operating system to any new phones made by the Chinese firm.
U.S. microchip giants Intel and Qualcomm were likewise banned from selling their most advanced technology to the company, all but eliminating its ability to produce cutting edge handsets. The export restrictions also barred contract chipmakers, including Taiwan Semiconductor Manufacturing Corp., the world’s largest, from selling advanced chips to Huawei.
According to International Data Corporation, a business intelligence firm, as its chip supply dried up, Huawei’s share of the global smartphone market cratered. In the second quarter of 2020, Huawei shipped an industry leading 20.2% of handsets, but by the fourth quarter its share had dropped to just 8.6%.
Other analysts predict that before 2021 is over, that number will have been halved again, to around 4% of the market.
5G dominance blunted
The pressure on allies to avoid Huawei’s 5G infrastructure offerings has also been broadly successful.
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Most major U.S. allies have barred national telecommunications firms from using Huawei-made equipment in their rollout of 5G services and some, like Britain, have committed to the expensive process of replacing existing Huawei components within their systems.
Lewis, of CSIS, agreed that Huawei has been “shut out” of most major U.S. allies’ 5G systems, but said that the U.S. pressure campaign hadn’t been the only factor in making that happen.
Over the years, there have been multiple charges leveled against Huawei of shady practices, and not all of them from Washington. A 2019 report revealed that British telecom firm Vodaphone had found hidden “backdoor” vulnerabilities in Huawei’s equipment. The company has also been accused of multiple instances of industrial espionage.
“Some of it had to do with just telling people, hey, you need to look closely at Huawei, and it's their own independent assessment,” Lewis said. “The Europeans have been looking at Huawei as a risk since before the Trump administration. So in some ways, Huawei is caught by its own practices.”
The Link LonkMarch 24, 2021 at 08:26PM
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Years-Long US Pressure Campaign Chokes Huawei's Growth - VOA Asia
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