World

China hits back at US over Huawei

Beijing says it will take steps to protect its companies after Washington places telecom equipment giant on blacklist

BEIJING: China yesterday slammed a decision by the US to put telecom equipment giant Huawei on a blacklist and said it will take steps to protect its companies, in a further test of ties as the economic heavyweights clash over trade.

China is strongly against other countries imposing unilateral sanctions on Chinese entities, a Commerce Ministry spokesman said, stressing that the US should avoid further damaging Sino-US trade relations.

The crackdown on Huawei came as US Treasury Secretary Steven Mnuchin said he would visit China soon for more trade talks.

Hopes for a deal to end their trade war have been thrown into doubt after both raised tariffs on each other's goods in the past week.

The US Commerce Department said on Wednesday that it was adding Huawei Technologies and 70 affiliates to its so-called "Entity List" in a move that bans the Chinese company from acquiring components and technology from US firms without prior US government approval.

President Donald Trump separately on Wednesday signed an executive order barring US firms from using telecom equipment made by companies deemed to pose a national security risk.

The order did not specifically identify any country or company, but US officials have previously labelled Huawei a "threat" and lobbied allies not to use Huawei network equipment in next-generation 5G networks.

"China has emphasised many times that the concept of national security should not be abused, and that it should not be used as a tool for trade protectionism," Mr Gao Feng, spokesman for the Chinese Commerce Ministry, told reporters.

"China will take all the necessary measures to resolutely safeguard the legitimate rights of Chinese firms."

US Commerce Secretary Wilbur Ross said Mr Trump backed the decision to "prevent American technology from being used by foreign-owned entities in ways that potentially undermine US national security or foreign policy interests".

In response, Huawei, which denies its products pose a security threat, said it was "ready and willing to engage with the US government and come up with effective measures to ensure product security".

It said restricting Huawei from doing business in America would "limit the US to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment and eventually harming the interests of US companies and consumers".

Putting constraints on Huawei's supply chain could also delay its procurement of components and parts needed to help Chinese telecom operators roll out 5G in China, US brokerage Jefferies wrote in a note, unless Beijing manages to negotiate with Washington to help Huawei get out of "jail".

"Assuming the US export ban on Huawei remains unresolved for the next 12-24 months, we highly doubt if China would stick to its timetable of building 5G aggressively," it wrote.

The sanctions on Huawei were also likely to have ramifications beyond the company itself, rattling the global tech supply chain, analysts said. - REUTERS

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