China’s Electronics Giant is Pawn in USA-China Trade War

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Home > Articles > China’s Electronics Giant is Pawn in USA-China Trade War

 China’s Electronics Giant is Pawn in USA-China Trade War

Tan Chee Teik | General
November 27, 2019

The age of the fifth-generation information technology is upon us. China’s Huawei is a leader in 5G technology, way ahead of the United States of America (USA). To keep Huawei in check, USA is using Huawei as a pawn in the game of chess.

As world communications move towards the speedy 5G standards, China’s Huawei is a leader in 5G technology way ahead of USA. To keep Huawei in check, USA is placing obstacles to prevent the company from selling its equipment to many countries.

Huawei Technologies Co Ltd is a Chinese multinational technology company that provides telecommunications equipment and sells consumer electronics, including smartphones. Its headquarters is in Shenzhen, Guangdong, China.

Huawei began developing its own 5G technology in 2009. In 2013, it hired more than 300 experts from the wireless industry worldwide. It pumped in US$600 million in 5G research. Today, thousands of employees are engaged in 5G product development.

When USA put restrictions on the purchase of Huawei equipment on grounds of national security but there is no proof that the equipment will act as a spy for China, Mr Neil McRae, chief architect of British Telecom states that Huawei “is the only true 5G provider”.

Why do the USA authorities fear the success of Huawei’s technology? Since 2009, Huawei has been proactively involved in the formulation of 5G standards. From products from core networks, bearer networks, base stations to devices, to end-to-end research and development, Huawei has years of experience. It has the world’s first ASIC chip-based customer premises equipment (CPE) and IPTV@5G with a peak speed of 3 Gbps.

From telecommunications to vertical industry, Huawei has extensive cooperation with partners and strong ability in 5G business incubation. It has more than 186 industrial partners, and 45 collaboration projects in Europe.

Huawei has announced the launch of its first 5G CPE at Mobile World Congress (MWC) 2018 in Barcelona.

The CPE involves a commercial terminal device supporting standards body 3GPP’s 5G standards with a Huawei-developed Balong 5G01 chipset, which it says is the world's first commercial 3GPP 5G chipset supporting download speeds of up to 2.3 Gbps across sub-6GHz and millimetre-wave (mmWave) spectrum bands.

The Balong 5G01 makes Huawei the first company offering an end-to-end 5G solution through its network, devices, and chipset-level capabilities claims Huawei.

Extradition of CFO
On 1 March 2019, the Canadian government announced its courts will investigate the United States who wanted to extradite Huawei CFO Meng Wanzhou. Ms Meng, who’s also the daughter of Huawei founder Mr Ren Zhengfei, was arrested in Vancouver in December 2018 and held on charges of fraud. She served on the board for a Hong Kong-based company called Skycom, which allegedly did business with Iran between 2009 and 2014, in violation of US sanctions.

The US authorities have described the company as a potential threat to national security without providing concrete evidence. President Donald Trump later issued an executive order limiting sales of its 5G equipment within the country. Huawei has denied any wrongdoing or inappropriate cooperation with the Chinese government.

Huawei’s smartphone business has suffered because of the executive order as several American IT companies have suspended sales of critical components to the firm. It included the owner of the Android operating system used in the popular smartphones.

To counter the decline in sales in Singapore, Huawei announced in a full-page advertisement in The Straits Times on 26 June 2019 that the firm will provide an assurance warranty for Huawei devices. Purchasers will get their money back if the Google Mobile Services and other selected apps do not work. There is a two-year protection on apps such as Gmail, Google maps, Google search, Google Chrome, Google Play, Google Gallery, Youtube, Facebook, Instagram, and WhatApp.

After restrictions were placed by the US administration on the sales of their products and services to Huawei, American technology companies, including semiconductor firms, met the government to appeal against the decision. In July 2019, President Trump said he would look further into easing the ban. 

Meanwhile, China has threatened to restrict the sales of rare earth metals to certain companies in retaliation for the attack on Huawei.

When President Trump met President Xi Jinping on the side lines of the Group of 20 Summit in Osaka on 30 June 2019, both countries declared a truce on the trade war for a period.

The trade war demonstrates the impotence of the World Trade Organisation. As with all wars, both parties stand to lose out and the big losers will the consumers who have to pay more for their purchases.

IMAGE: Shutterstock

Mr Tan Chee Teik is a freelance journalist. He is a regular contributor to M360 and Today’s Manager.


Copyright © 2019 Singapore Institute of Management

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