Huawei probe may signal 'protectionism'

Updated: 2016-06-04 03:00

By Zhong Nan,Ma Si(China Daily)

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The reported US investigation into Huawei Technologies over whether the company has exported US technological goods to sanctioned countries might be motivated by trade protectionism, according to some Chinese analysts.

It will have limited impact on the Chinese tech giant, they said.

The United States has subpoenaed Huawei as part of a probe into whether the Chinese telecom equipment maker has exported such products to Iran, Cuba and other nations on the US sanction list, The New York Times reported.

The investigation comes after the US Commerce Department temporarily sanctioned another Chinese tech company, ZTE Corp, this year, and it highlights a growing discord between China and the US on communication technology trade, analysts said.

Ma Yu, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said the US is paying close attention to Chinese technology firms as they strive to gain a bigger international presence.

"There has been an obvious rise in global trade protectionism, and China has been targeted as a main rival that poses a serious threat to US jobs in the telecommunication sector," Ma said.

Huawei, one of the world's largest makers of smartphones and telecom equipment, has been growing robustly in recent years.

The company is aiming to beat Samsung Electronics Co and Apple Inc within the next five years to become the world's biggest smartphone maker, with a market share of more than 25 percent, its director, Yu Chengdong, told The Wall Street Journal on Friday.

Xiang Ligang, an independent telecom analyst and founder of industry website, said the probe will have limited impact on Huawei, given the company's abundant intellectual properties and its ability to make in-house chips and operating systems.

"Compared with ZTE, which chiefly relies on the US semiconductor company Qualcomm Inc for mobile chips, Huawei is using self-developed chips in its smartphones and tablets," Xiang said.

Even if the US government blocks sales of US technology to the company based on its probe results, Huawei may still rely on its competitive research and development team to meet its technological needs, Xiang said, adding that "the probe is a challenge but also an opportunity".

According to The New York Times, the US government is demanding that Shenzhen-based Huawei submit all of its information on the export or re-export of US technology to Iran, the Democratic People's Republic of Korea, Syria, Sudan and Cuba.

The subpoena is administrative, not criminal, and Huawei had not been accused of wrongdoing, the newspaper said.

Huawei declined to comment on the US inquiry, but a company representative told Reuters that it abides by US laws and regulations.

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