US Imposes New Sanction on Huawei to Use American Technology

The US government has imposed new restrictions on Chinese tech giant Huawei's ability to use American technology, stepping up a conflict with Beijing over industry development and security.

Commerce Secretary Wilbur Ross said Friday that Washington wants to prevent Huawei from evading sanctions imposed earlier on its use of American technology to design and produce semiconductors abroad.

“There has been a very highly technical loophole through which Huawei has been able to in effect use US technology," Ross told Fox Business. "We never intended that loophole to be there.”

Huawei Technologies Ltd, China's first global tech brand and a maker of network equipment and smartphones, is at the center of US-Chinese conflict over Beijing's technology ambitions. American officials say Huawei is a security risk, which the company denies. China's government has accused Washington of misusing security warnings to harm a rising competitor to U.S. technology companies.

Under the new rules, foreign semiconductor makers must obtain a US license to ship Huawei-designed semiconductors to the Chinese company that were produced using US technology.

The move “looks like a victory for the people who really want to drive the nail, or what they think will be the nail, in Huawei's coffin,” said Adam Segal, a senior fellow at the Council on Foreign Relations.

China threatened retaliation against US companies.

Chip design and manufacturing equipment used in the world's semiconductor plants is mostly U.S.-made, so the new rule affects foreign producers that sell to Huawei and affiliates including HiSilicon, which makes chips for supercomputers with scientific and military uses. The Commerce Department said foreign foundries would be granted a 120-day grace period for chips already in production.

Last year, the Trump administration barred U.S. firms from using Huawei technology or providing technology to the Chinese firm without government approval, deeming it a national security risk. The Commerce Department exempted a narrow list of products and services and has extended that waiver to reduce the impact on U.S. wireless carriers that use Huawei technology. This week, it added another 90 days.

Huawei responded by removing U.S. components from its core products.

The company reported global sales rose 18 per cent to USD 121 billion last year despite the restrictions, though it said smartphone sales suffered after it was blocked from preinstalling music, maps and other services provided by US-based Google.

The new restrictions are separate from those exemptions, but loopholes have allowed U.S. companies to supply Huawei with chips made outside the US.

The Commerce Department said Friday the new restrictions would “narrowly and strategically" target Huawei's acquisition of semiconductors that it designs built in overseas foundries that use U.S. software and technology.

Kevin Wolf, an attorney at Akin Gump who oversaw export administration at the Commerce Department during the Obama administration, noted the narrow scope of the rules.

"If a foreign foundry makes a chip based on a Huawei design and U.S. equipment is used to make a chip then it's controlled, but if a chip is not made from a Huawei design then it is not controlled,” he said.

Huawei did not immediately respond to a request for comment. But China's official Global Times newspaper threatened countermeasures on Friday. It said Beijing that could include restrictions on U.S. companies including Qualcomm, Cisco and Apple. It also threatened to suspend purchases of Boeing aircraft.

Global Times noted that the new rules would block companies such as TSMC, a Taiwainese chip maker, from providing semiconductors to Huawei.

TSMC said it was “following the U.S. export rule change closely.” The company said the semiconductor supply chain is “extremely complex" and TSMC was working with lawyers to "conduct legal analysis and ensure a comprehensive examination and interpretation of these rules.” TSMC announced plans this week to build a chip plant in Arizona. (AP)

Huawei Exec Arrested in Canada can be Extradited to US - Canada Attorney Gen

Canada's Department of Justice said a Huawei executive arrested in Vancouver could be extradited to the United States, because her offense is a crime in both countries, according to documents released Friday.

Huawei chief financial officer Meng Wanzhou, who was originally detained on a US warrant in late 2018, faces an extradition hearing in Vancouver that begins on January 20.

The United States accuses Meng of lying to banks about violating Iran sanctions.

However Meng's lawyers maintain that she cannot be turned over to the United States, because in order for that to happen, her offense would have to meet a "double criminality" standard -- meaning it is a crime in both countries.

Violating US sanctions against Iran, they say, is not a crime in Canada.

However in the documents filed in Vancouver Friday, which were widely cited by media, Canada's attorney general said the "essence" of her banking interactions amounted to fraud, which is a crime in the country.

The first week of Meng's extradition hearing will be devoted to the question of double criminality.

Meng, who lives under house arrest at her mansion in Vancouver, denies the US allegations and says Canadian authorities violated her rights during the arrest.

Her detention at the Vancouver airport in December 2018 caused an unprecedented diplomatic rift between Canada and China, which demands her release.
Just nine days later China detained former Canadian diplomat Michael Kovrig and businessman Michael Spavor, whom it accuses of espionage. (AFP)

Huawei Dismisses Washington's 3-Month Delay to 'Unjust' US ban

Beijing, Aug 20 (AFP) Huawei on Tuesday dismissed Washington's three-month delay to a ban on US firms selling to the Chinese tech giant and said the decision would not change the fact it had been "treated unjustly".

The US Commerce Department effectively suspended for a second time tough rules stopping the sale of components and services to the telecoms titan and a prohibition on buying equipment from it.

However, it also said it would add 46 more companies to its list of Huawei subsidiaries and affiliates that would be covered by the ban if it is implemented in full -- taking the total on the list to more than 100.

The original ban was announced earlier this year by US authorities who claim it provides a backdoor for Chinese intelligence services -- something the firm denies.

Last month, Huawei Technologies said on Tuesday that its revenue has been increased by 23.2% year-on-year to US$58.3 billion in the first half of the year, even as its top official admitted US sanctions would bring challenges in the coming months.

"It's clear that this decision, made at this particular time, is politically motivated and has nothing to do with national security," Huawei responded in a statement, adding that the actions "violate the basic principles of free market competition." "They are in no one's interests, including US companies. Attempts to suppress Huawei's business won't help the United States achieve technological leadership" Huawei said.

"The extension of the Temporary General License does not change the fact that Huawei has been treated unjustly."

Monday's move means Huawei can continue to buy US-made semiconductors and other materials crucial to its phones and network equipment, and that US telecommunications companies can continue to buy Huawei's networking equipment.

Huawei -- considered the world leader in superfast 5G equipment and the world's number two smartphone producer -- was in May swept into a deepening trade war between Beijing and Washington, which has seen punitive tariffs slapped on hundreds of billions of dollars of two-way trade.

The suspension of the ban does not signal a change in US concerns that Huawei equipment poses a national security threat or lift a general prohibition on the use of its 5G systems in the United States.

"As we continue to urge consumers to transition away from Huawei's products, we recognise that more time is necessary to prevent any disruption," Commerce Secretary Wilbur Ross said in a statement.

Earlier this month, Huawei unveiled its own operating system called HarmonyOS, highly anticipated software considered crucial for the tech group's survival as the looming ban could remove its access to Google's Android operating system. (AFP)

~ PTI

US gives Huawei 90 Day Reprieve on Ban: Ross

The United States gave Huawei a 90-day reprieve Monday on a ban against buying US technology, but added nearly four dozen subsidiaries of the Chinese telecoms giant to the prohibition.

"As we continue to urge consumers to transition away from Huawei's products, we recognise that more time is necessary to prevent any disruption," Commerce Secretary Wilbur Ross said in a statement.

The ban is part of a sweeping effort by President Donald Trump's administration to restrict Huawei, which officials claim has links to Chinese intelligence that makes it a security threat.

Ross announced that another 46 Huawei affiliates are being added to the list of banned companies, meaning over 100 are now subject to the restrictions.

But the Commerce Department has extended a temporary license for US companies to work with the Chinese firm and its subsidiaries for another 90 days. "We are giving them more time to wean themselves off," Ross said on Fox Business Network, noting that the new deadline for implementing the ban is November 19.

"Technically Huawei says they're privately-owned company, but under Chinese law, even private companies are required to cooperate with the military and with the Chinese intelligence agencies and they're also required not to disclose that they are doing so," Ross said.

Huawei is the number two global smartphone vendor and is considered the world leader in fast fifth-generation or 5G equipment, but is hampered by lack of access to key hardware and software, including smartphone chips.

Trump on Sunday repeated that "we don't want to do business with Huawei for national security reasons. (AFP)

Most Indian Cos working in China show Optimism, Plan to Invest this Year: Survey

Most Indian companies working in China do not see significant impact of the current trade friction involving China and the US and plan to ramp up their investments this year, according to a survey.

According to the survey by industry body Confederation of Indian Industry (CII) and research and analytics company Evalueserve, 98 per cent of the respondents plan to make some investments in China in 2019, with two-fifths considering ramping up their investments over 2018.

Moreover, the number of IT and BPO companies that plan to make additional investments in China in 2019, has increased over the previous year.

The survey titled 'Business Climate for Indian Companies in China' that drew responses from 57 Indian companies in China, noted that 74 per cent of the companies said trade friction involving China and the US has had no impact on their business.

"The survey of Indian companies working in China shows cautious optimism and confidence as compared to the previous survey last year. Most companies do not see significant impact of the current trade situation between the US and China on their business," said CII Director General Chandrajit Banerjee.

The survey pointed out that two thirds of the companies said that their business was "very profitable or profitable" in 2018, with higher earnings before interest and taxes (EBIT) than in 2017.

Of the surveyed companies, 30 per cent generated revenues higher than CNY 100 million (approx Rs 101 crore) from China in 2018, and four of five respondents stated that their revenues in 2018 were higher than in the previous year, it added.

According to the survey, the largest proportion, 72 per cent, of Indian companies are invested in Shanghai, the most popular destination. Besides, 72 per cent of the respondents have up to 50 employees and hire more than half the workforce locally.

As per the survey, while half the companies felt China's innovation is more favourable than the worldwide average, rising labour cost, finding and retaining talent and stricter regulations were the top cited issues.
Quality of products and services continues to be a key success factor in China, it added. PTI

After Banning US Businesses, Alibaba lets US Small, Medium Businesses to Sell on Platform

China's e-commerce juggernaut Alibaba will allow small and medium-sized US businesses to sell on Alibaba.com. US businesses, until Tuesday, were only able to buy merchandise on the platform.

Alibaba is looking to juice its growth, which has been held in check by Amazon and threatened by trade tensions between the US and China. Alibaba says the platform has 10 million active business buyers in more than 190 countries and regions.

One third of the order volume is from US businesses, says John Caplan, president of North America B2B and globalisation at Alibaba Group. Sellers will have to pay an annual registration fee of about USD 2,000, but it won't charge commission for each sale, unlike Amazon, Caplan said.

In March, Alibaba.com and Office Depot announced a co-branded online store to expand the reach of both companies with small and medium sized businesses. It said at the time it was part of a broader array of services they were providing to small business.

Over time, the companies intend to help US small businesses sell their products to buyers around the world through Alibaba.com, the wholesale trade site of the Alibaba Group. It marked Alibaba.com's first US partnership with a major retailer.

On Tuesday, it announced that Robinson Fresh, a division of CH Robinson, will be another "anchor seller" on the platform. There are about 30 million small businesses in the US.

The lion's share of business for Group Holdings Ltd. has been providing retailers and brands in the US and around the globe access to the 700 million Chinese customers through its two major marketplaces Taobao and Tmall. (AP)