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May 22, 2019

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‘US underestimated our abilities’ as Huawei had prepared for ban

THE United States has temporarily eased trade restrictions on Huawei to minimize disruption for its customers, a move the founder of the world’s largest telecoms equipment maker said meant little because it had already prepared for US action.

The US commerce department blocked Huawei Technologies from buying US goods last week, a major escalation in the trade war between the world’s two top economies.

On Monday it issued a 90-day temporary license loosening restrictions on business deals with the Chinese telecommunications giant, a move intended to give telecom operators that rely on Huawei time to make other arrangements.

Huawei is still prohibited from buying American-made hardware and software to make new products without further, hard-to-obtain licenses.

Huawei founder Ren Zhengfei told Chinese media yesterday that the reprieve bore little meaning for the company as it had been making preparations for such a scenario.

“The US government’s actions at the moment underestimate our capabilities,” Ren said in an interview with China Central Television.

Ren said what is most important for Huawei to do is to do its own thing well. “We cannot control what the US government will do.”

Huawei maintains mass production capacities for specific key components, including chips, and the US ban will not result in negative business growth, Ren said.

Huawei posted 39 percent year-on-year revenue growth in the first quarter of the year. Entering the second quarter, the growth has slowed to 25 percent in April alone.

Ren said Huawei had recently received widespread global support. Huawei never wants to “walk alone” in the global markets, but has made good preparations for any extreme circumstances, he said.

Ren reiterating that the restrictions will not hurt Huawei’s prospects and that no other company will be able to catch up with Huawei in 5G technology in the next two to three years.

Huawei should not be restricted just because of its leading technology position, said Ren.

“Our work is to benefit the whole of humankind,” he said, adding that Huawei’s 5G equipment would greatly reduce the cost of global telecom networks construction.

He noted, however, that it would not reject the US supply chain, citing Huawei’s announced purchase of 50 million chips from Qualcomm in 2018.

“As long as the US government allows US companies to export the components, Huawei will continue to buy while sticking to its own research and development,” he said.

Ren said he appreciated the support of a large number of US components suppliers over the years, and they were also lobbying for the easing of US government-imposed restrictions.

He said Huawei was also in talks with companies like Google for potential remedy solutions, he said.

Ren said Huawei was at odds with the US government, not US firms, and in a comment that trended on Chinese social media, he praised Apple Inc’s iPhones, saying he gifted the American firm’s devices to family members.

“Apple has a good business ecosystem ... We cannot think narrow-mindedly that loving Huawei equals loving its phones.”

US firms could lose up to US$56.3 billion in export sales over 5 years from stringent export controls on technologies involving Huawei or otherwise, the Information Technology & Innovation Foundation said in a report. Missed opportunities threatened as many as 74,000 jobs, the foundation said.


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