News Article

Huawei’s cryptic gift is more than a souvenir

Defiance toward US in Chinese group's choice of reading for visitors

Visitors to Huawei‘s office may obtain a special present these days. It’s not a smartphone or any of the other products that helped create the Chinese business the world’s largest supplier of telecom equipment. It is instead a novel by a Frenchman who spent time in a U.S. prison.

Visitors will be provided a guide by Frederic Pierucci, entitled’ The American Trap,’ because the novel is said to be supported by Ren Zhengfei the creator of Huawei and the dad of Meng Wanzhou the Huawei ceo presently kept in Canada waiting for extradition to the United States. The Frenchman went to jail for authorizing bribes to gain a deal against U.S. firms in Indonesia.

The donation shows Huawei’s mood of distrust. But is Washington leading by proposing that a smart approach requires justice independence? Make no error: the Chinese champion’s very existence is at risk.

The inclusion of Huawei and 68 affiliates on the US “entity list” means that the Chinese company can not buy American providers ‘ parts. “We are looking at all the interventions necessary to fix this matter,” Catherine Chen, director of the Huawei Board, informed me. “This appears to be the United States government’s plan not to resolve this problem. They just want to bring us down.”

Cyber security is one of the main vulnerabilities. Two thirds of Huawei’s software bundles are made by US vendors to safeguard its products. In another addiction, about a third of Huawei’s 200 million smartphones purchased last year included semiconductors from Qualcomm, a U.S. corporation.

A visit of the Huawei production line in Dongguan, South China, also disclosed that some of the devices used for making the recent smartphone designs have brand designations of US companies.

Although the Chinese business has three months to discover options before the U.S. prohibition assumes effect, short-term substitutes may be hard to discover, experts said.

It may seem interesting for Huawei to avoid inflaming US view by distributing the library of Mr Pierucci to the tourists with so much at stake. However, such a study does not bring into consideration the more comprehensive approach adopted by both the Chinese government and Huawei.

Huawei hopes to make Washington relax by impressing US firms as much as they can loose if they break off the Chinese firm. Managers therefore informed reporters last week that 1,200 Chinese telecom vendors will be struck if the U.S. prohibition goes into effect.

Similarly, Beijing, which warned its people about flying to the US this week, has threatened a number of movements that could have affected US imports to China. It also endangered to break the availability of about 17 rare earths, which U.S. producers depend on.

All this indicates that China still considers the Huawei problem–and potentially Ms Meng’s destiny–as a matter of compromise in the domestic trade conflict. Perhaps this is a clever call; perhaps Donald Trump’s White House will be prepared to raise the Huawei penalties in exchange for supplying soybeans to China.

But there’s a lot dimmer learning, too. Perhaps Washington, as Ms. Chen said, intends to bring Huawei down. And it intends to set the basis of a fresh cold war after doing so.

James Kynge is the editor of Tech Scroll Asia, an Asian newsletter combining Nikkei and Financial Times ‘ best reports. He is also the global China editor of FT’s and writes about China’s increasing footprint worldwide. He received the 2016 Financial Journalist of the Year Award from the Wincott Foundation. His winning novel, “China Shakes the World,” has been converted into 19 different dialects.

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