In an ominous but vague warning, China said on Friday it was compiling a list of “unreliable” foreign companies, organizations and individuals to target what retaliation for US sanctions on Chinese tech powerhouse Huawei could mean.
“We believe it may be the beginning of Beijing’s attempt to implement a retaliatory framework,” said Paul Triolo of global risk assessment firm Eurasia Group. “That could include a host of other elements, like restrictions on rare earth shipments” – minerals that are crucial in many mobile devices and electric cars made by US companies.
The move follows additional measures this week that deepen the bite of sanctions imposed by the US on Huawei in mid-May amid an escalating trade war, the scene of which is the two powers’ struggle for technological dominance and long-term economical.
Several leading groups in the establishment of global technology standards based in the United States announced restrictions on Huawei’s participation in their activities under the restrictions of the United States Department of Commerce, which prevent the sale and transfer of technology from the United States. Joined Huawei without government approval.
Such groups are vital battlegrounds for industry players, who use them to try to influence the development of next-generation technologies in their favor. Excluding Huawei would put the company at a serious disadvantage against rivals outside of China.
Also on Friday, The Financial Times said the company had ordered employees to cancel technical meetings with Americans and had sent its employees to the United States working at its Chinese headquarters.
Huawei is the No. 1 provider of network equipment and the second largest smartphone manufacturer in the world. US officials claim that Huawei is legally indebted to China’s ruling communists, who could use the company’s products for cyber espionage, although the US has presented no evidence of intentional espionage.
On Huawei’s blacklist, the Commerce Department cited the theft of intellectual property by the company and evasion of Iran sanctions. A 90-day grace period allows ongoing support for existing Huawei equipment. But under export restrictions, US vendors that include Qualcomm, Intel, Google and Microsoft cannot ship computer chips, software and other components for Huawei’s new equipment.
In apparent response, a spokesman for the Chinese Ministry of Commerce said in Beijing on Friday that it was establishing a list of foreign companies, organizations and individuals considered “untrustworthy entities.”
“Entities are” unreliable “if” they do not comply with the market rules, deviate from the spirit of the contracts and block or stop supplying the Chinese company for non-commercial reasons, seriously damaging the legitimate rights and interests of the companies. Chinese, “said ministry spokesman Gao Feng. He told a press conference. Gao said” necessary measures “against offenders would be announced” in the near future. “
He said the creation of China’s list is justified by national security concerns and Beijing’s opposition to trade protection and “unilateralism,” a likely reference to the Trump administration’s approach to global trade and security policy. .
But China’s options are limited.
Eurasia Group’s Triolo said China has no retaliatory options that do not affect China’s business climate. Reducing exports of rare earth minerals to the US, for example, could also affect China, as the country is the main exporter of such materials.
In the latest blow to Huawei, the world’s largest association of technical professionals, IEEE, moved this week to restrict employees of the Chinese company from peer-review investigative work, citing US sanctions. .
IEEE, based in New Jersey, is a leading developer of telecommunications, information technology, and power generation standards, with 422,000 members in more than 160 countries, more than half of them outside the United States. It has about 200 different posts.
IEEE media officials did not return phone calls and emails seeking clarification on a leaked email that was widely circulated online. The email advises the editors-in-chief of IEEE journals about possible “serious legal implications” if Huawei employees are not removed from the peer review process on scientific papers.
Huawei had no comment on the IEEE action. However, the Chinese state news agency Xinhua said that Chinese scientists have no choice but to leave the IEEE, calling the decision “smear” that will damage the objectivity and authority of the scientific organization.
“We all believe that IEEE is an international society, not just one that belongs to the US,” Zhang Haixia, a nanotechnology scientist at Peking University, posted on his lab’s social media account. She said she was leaving two IEEE editorial boards.
Also this week, two major international standards organizations, the Wi-Fi Alliance and the SD Association, said they were temporarily restricting Huawei’s participation in activities covered by the US restrictions.
The Austin, Texas-based Wi-Fi Alliance, which has more than 550 members and certifies wireless networking products, did not respond to questions seeking clarification on what activities it was restricting.
Kevin Schader, a spokesman for the San Ramon, California-based SD Association, said Huawei cannot participate in the development of standards for memory cards. The group has 900 members around the world.
The development of standards for next-generation 5G wireless equipment, in which Huawei has played a central role, is exempt from the US restrictions until the grace period ends on August 21. That exemption could be extended.
Many analysts see the restrictions as a pressure tactic by Washington to encourage a widespread ban by European allies on Huawei equipment in its 5G launches, which countries such as Britain, France and Germany have resisted.
Meanwhile, the Financial Times quoted Huawei’s chief strategy architect Dang Wenshuan as saying that US citizens working in research and development at the company’s Shenzhen headquarters were sent home two weeks ago.
He said an ongoing workshop at Huawei at the time was “hastily disbanded, and American delegates were asked to remove their laptops, isolate their networks and leave the Huawei facility.”
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