Malaysia pledges to use Huawei ‘as much as possible’


After China accuses US of ‘economic terrorism,’ Malaysian PM Mahathir picks sides in tech cold war

By Asia Times staff

China’s Foreign Ministry doubled down Thursday on its accusation that the United States is engaged in “economic terrorism,” a sentiment that now appears to be winning support in the region.

“This kind of deliberately provoking trade disputes is naked economic terrorism, economic chauvinism, economic bullying,” Vice-Foreign Minister Zhang Hanhui told reporters. Foreign Ministry spokesman Lu Kang said on Thursday that he “could not agree more” with Zhang’s remarks.

Malaysian Prime Minister Mahathir Mohamad, whose election last year was seen by many as a rebuke of China’s growing influence in the region, did not hold back in his support of Beijing’s view on this issue.

“‘If I am not ahead, I will ban you, I will send warships’ – that is not competition,” Mahathir said, as quoted by Malaysian newspaper The Star.

Speaking at an event in Tokyo hosted by Nikkei, Mahathir pledged that Malaysia “will make use of [Huawei’s] technology as much as possible,” asserting that the Chinese telecommunications champion had made tremendous advances over US technology.

He added that he was not concerned about US accusations of espionage on the part of Huawei.

The administration of US President Donald Trump placed Huawei on an export-control blacklist several weeks ago, a move that could threaten to slow the company’s ascendance on the global stage.

Vice-Foreign Minister Zhang said in his remarks this week that “this trade clash will have a serious negative effect on global economic development and recovery.”

The sentiment is clearly shared by others in the region, including Mahathir, who was elected in part to provide a check on China’s economic influence in Malaysia through infrastructure projects.

Source: Asia Times “Malaysia pledges to use Huawei ‘as much as possible’”

Note: This is Asia Times’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.

Advertisements

China prepares to strike back at US as Huawei suffers another loss


SoftBank snubs Huawei for 5G equipment while China mulls rare earths embargo

By Vlad Savov@vladsavov May 31, 2019,

The trade tension between the United States and China looks set to intensify soon, as the latter country is taking steps to respond to the American ban on doing business with Huawei. Bloomberg reports that China has put preparations in place to restrict exports of rare earth minerals to the US, while also setting up its own “unreliable entities” blacklist for unfavorable foreign companies. At the same time, Japan’s SoftBank has announced it’ll be building its 5G network with equipment from Nokia and Ericsson, snubbing Huawei, which had been a 4G supplier for the large mobile carrier.

The rare earths export restriction looks to be an act of saber rattling for now. The leadership in Beijing is signaling that it’s ready and willing to deploy this severe measure, but, according to Bloomberg, that’s only in the event that the trade war between China and the US deepens. Neodymium is one of the most recognizable rare earths, as it’s widely used in magnets. You’ll have seen it advertised on the spec sheet of your headphones, most likely, and there’s a broad consensus among economists and international trade observers that US companies have no good alternative sources for it outside of China.

As to the Chinese entity list, this echoes the language of the US Bureau of Industry and Security’s Entity List on which Huawei finds itself now. That could well be a deliberate sign of a tit-for-tat response, as China doesn’t really need a formal list, having already imposed bans on a number of prominent US businesses like Google and Facebook. The list will cover “foreign enterprises, organizations and individuals that don’t obey market rules, violate contracts and block, cut off supply for non-commercial reasons or severely damage the legitimate interests of Chinese companies,” according to China National Radio, citing a government official. In simple terms, China is mirroring the actions of the US and taking on a more assertive posture as it heads into its next round of negotiations.

Huawei, the company that finds itself the focus of friction in the present trade dispute, has taken a significant loss in the form of SoftBank’s 5G business. There’s rarely been dispute about the performance of Huawei’s networking equipment, however worries about its security vulnerabilities and the company’s relationship with the Chinese government have been weighing on the minds of its business customers. SoftBank’s decision now is likely a mix of that track record and the present turbulence caused by the US blacklisting of Huawei. This is one of those consequences that will have a lingering impact no matter how soon US-China trade relations improve. Even if the current impasse is resolved swiftly, Huawei’s reputation as a trustworthy smartphone maker for consumers and a reliable 5G vendor for mobile operators will remain tarnished.

Source: The Verge “China prepares to strike back at US as Huawei suffers another loss”

Note: This is The Verge’s report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


China threatens corporate hit-list on eve of new tariffs on U.S. imports


Stella Qiu, Dominique Patton May 31, 2019

BEIJING (Reuters) – China threatened on Friday to unveil an unprecedented hit-list of “unreliable” foreign firms, groups and individuals that harm the interests of Chinese companies, as a slate of retaliatory tariffs on imported U.S. goods was set to kick in at midnight.

The commerce ministry did not single out any country or company, but the threat could further heighten tensions after Washington this month put Huawei on a blacklist that effectively blocks U.S. firms from doing business with the Chinese telecoms equipment giant.

Beijing’s “unreliable entities list” would apply to those who violate market rules and the spirit of contracts, block supplies to Chinese companies for non-commercial reasons, “seriously damage the legitimate rights and interests” of Chinese companies and harm China’s national security, the ministry said.

A deluge of sharply worded commentaries, criticism and warnings from China in the last two weeks has intensified a battle of words with the United States that could complicate the run-up to any meeting between their respective leaders next month.

Earlier this month, Washington slapped additional tariffs of up to 25% on $200 billion of Chinese goods, accusing Beijing of reneging on its previous promises to make structural changes to its economic practices. That prompted Beijing to hit back with additional levies on the majority of U.S. imports on a $60 billion target list – due to take effect on Saturday.

U.S. President Donald Trump has said he plans to meet his counterpart, Xi Jinping, during the G20 summit, set for June 28-29 in Osaka, though China has not formally confirmed this.

Xi and Trump are likely to find it “difficult” to make major progress toward ending the trade war, a former top Chinese official said.

The U.S. approach to trade talks had been “bullying and America First”, whereas the principles of China’s approach to negotiations were equality and cooperation, said Dai Xianglong, who headed the People’s Bank of China from 1995-2002 and remains an influential figure in China.

“I expect that at next month’s meeting of the leaders in Japan it will be difficult to achieve major progress,” Dai said, later adding that he was not confirming that the meeting would take place, but that he hoped it would.

Dai also said he did not rule out stronger retaliation by China. He said heavy sales of U.S. Treasuries by China were a less likely option for retaliation as they would hurt China’s own interests.

PUBLIC RELATIONS BATTLE

Since the latest round of U.S. tariffs, which caught Beijing by surprise, Chinese state media has gone on the offensive.

The People’s Daily, the ruling Communist Party’s flagship newspaper, warned that China was ready to use its dominance of rare earths, crucial minerals used in electronics, to strike back in the trade war.

Speaking at a separate briefing, Chinese Foreign Ministry spokesman Geng Shuang took umbrage at Trump comments on Thursday that China was becoming a “very weakened nation” due to companies leaving China because of the tariffs.

“This is neither the first nor second time the U.S. side has said these lies,” Geng said. “But the U.S. side seems to be very persistent, even obsessed with it, and is still repeating these lies.”

At the Beijing seminar on Friday, former Chinese vice commerce minister Wei Jianguo said initiating a trade war with China might be the biggest strategic mistake made by the United States since World War II or even its founding.

There was a need to prepare for the likelihood for the trade war to ratchet up tensions to geopolitical areas including the South China Sea, said Wei, adding that the trade conflict might last for 30 years or even half a century.

He suggested that China had many countermeasures it could take, including rare earths and against Boeing Co. or U.S. software.

“There are lots of Chinese countermeasures, and, speaking honestly, we hope not to use them, because we always negotiate with the United States with sincerity and hope to achieve results,” Wei said.

Dong Yang, a former executive director at the China Association of Automotive Manufacturers, said at the seminar that U.S. auto parts suppliers could also be hit.

“U.S. car components companies have presence in China, and set China as a global manufacturing base. The escalation of the trade war between China and the United States will seriously affect their development in China and the world,” Dong said.

Other parts suppliers from countries such as Germany, Japan, South Korea and France could also provide strong substitutes for U.S. components, he said.

All those who spoke at the seminar were former, albeit senior, officials. The government has not organized media appearances for top leaders or trade negotiators to answer questions on the trade talks. Chinese officials rarely take questions from foreign media.

Reporting by Stella Qiu, Cheng Leng, Yilei Sun and Dominique Patton; additional reporting by Cate Cadell; Writing by Ryan Woo and Ben Blanchard; Editing by Paul Tait, Simon Cameron-Moore and Nick Macfie

Source: Reuters “China threatens corporate hit-list on eve of new tariffs on U.S. imports”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


China’s Beidou Navigation System ready to go global


By Wu Lei 21:52, 29-May-2019

The U.S. ban on selling chips and other key components to Huawei has raised concerns among other Chinese tech companies. But I talked with two major players in the Beidou Navigation System who say they are not worried by the move.

Comnav Technology is one of the key suppliers of high precision modules and receivers for the Beidou Navigation System.

Photo Conav
Comnav’s terminal products have been sold to over 100 countries including the U.S. /CGTN Photo

The U.S. government put Comnav’s products on its list of additional tariffs last year, but the company said the impact has been limited.

Yin Qing, Comnav Technology’s Vice General manager told CGTN that because they don’t have very big sales in the U.S. right now, tariffs didn’t really affect them.

China started to build its Beidou Navigation System in the late 1990s. High tech companies used to rely on imported components.

But after years of research, Chinese high tech companies have developed the core technology and completed the supply chain. Now, this module only costs around 2,000 U.S. dollars with all the same functions. These companies say the key for sustainable growth is building a complete industrial chain.

Photo according
According to official data, 80 million chips have been sold for products using China’s BeiDou Navigation System. /CGTN Photo

From chipsets to receivers, thousands of companies have provided products and solutions in the sector. Shen Jun, Vice President of Beijing Unistrong Science and Technology Company told CGTN that once a senior scientist says the core technology cannot be bought, they have to develop their own key skills and technologies. He thinks this is the main lesson that can be learned from Beidou’s independent development.

Some Chinese tech companies may have felt increasing uncertainty due to the ongoing U.S.-China trade war, but experts say that where there is danger, there might be opportunities as well.

Photo experts
Experts say the trade war might be a double-edged sword for Chinese tech companies. /CGTN Photo

Wang Jianyu, the director of Chinese Academy of Sciences Shanghai Branch said in the short term, a ban may restrict you, but in the long run, it helps you to reshape your technology and business model.

Source: CGTN “China’s Beidou Navigation System ready to go global”

Note: This is CGTN’s report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Huawei launches 5G lab in South Korea, but keeps event low-key after U.S. ban


Ju-min Park May 30, 2019

SEOUL (Reuters) – Huawei Technologies unveiled an open lab for next-generation 5G wireless network in South Korea on Thursday, but kept the launch low-key given its recent blacklisting by the United States, a key security ally of the Asian nation.

The Chinese tech giant, the world’s top producer of telecoms equipment, said it planned to invest about $5 million in the lab in the Junggu district of Seoul. It did not provide any more details on the location and did not invite media to the launch.

“Based on the philosophy of “In Korea and for Korea” and the strength of its own 5G network, Huawei will build a 5G ecosystem through cooperation with a number of South Korean ICT companies and especially small-and-medium enterprises,” Huawei’s Korea office said in a statement.

The event was, however, overshadowed by the U.S. decision earlier this month to ban American tech and telecom firms from doing business with Huawei. Washington has also been urging its allies to bar the Chinese company from their 5G networks.

Huawei had initially considered inviting the press to the launch in South Korea, but after the U.S. ban it decided to keep the event low-key, a person with knowledge of the matter said.

“Huawei wanted to promote the launch to as many Korean small-and-medium enterprises as possible, but it decided to keep the press out after the ban to avoid any damage to its Korean partners in case they are shown in media,” the person said, declining to be named due to the sensitivity of the matter.

Huawei said the heads of South Korean enterprises attended the event, but did not disclose any names.

The move underlines Huawei’s commitment to South Korea from where it purchases components such as chips and screens.

The U.S. campaign against Huawei, and the broader U.S.-China trade war, have landed export-driven South Korea in a familiar bind, caught between its crucial security ally and biggest trading partner.

The lab in South Korea is Huawei’s first open 5G services development center in the world that will allow other companies to test their platforms, according to the company.

South Korea rolled out 5G services in April, hoping the next-generation wireless technology will spur breakthrough in fields such as autonomous cars.

Currently, Huawei provides its 5G network equipment for a small South Korean carrier LG Uplus. LG Uplus has said it does not plan to remove Huawei gear, but promised to step up security checks.

The two bigger carriers, SK Telecom and KT, do not use Huawei gear.

Reporting by Ju-min Park; Editing by Himani Sarkar

Source: Reuters “Huawei launches 5G lab in South Korea, but keeps event low-key after U.S. ban”

Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.


Hong Kong Plays China’s Role in Russia-China-Iran Triumvirate


Asia Times says in its report “HK ignores US sanctions on Iran as tanker heads east” that Hong Kong refuses to implement US sanctions on Iran as the sanctions are not within the scope of UN sanctions.

It says that Hong Kong has consulted with Chinese Ministry of Foreign Affairs in doing so.

Hong Kong’s act is a part of China’s activities in its Russia-China-Iran triumvirate.

Comment by Chan Kai Yee on Asia Times’ report, full text of which is reblogged below

ASIA TIMES
HK says it has no obligation to enforce unilateral sanctions as a tanker fully laden with Iranian oil may sail into the city

By Asia Times staff

The Hong Kong government has ignored a warning from Washington about letting an oil tanker carrying petroleum from Iran stop in the city.

Hong Kong’s Commerce and Economic Development Bureau said that other than sanctions endorsed and promulgated by the United Nations Security Council which Hong Kong had always abided by, the city did not have any obligation to execute US sanctions against another country.

The UN had not imposed any restrictions on the export of petroleum from Iran, said the bureau.

“Certain countries may impose unilateral sanctions against certain places on the basis of their own considerations. Those sanctions are outside the scope of the UN Security Council sanctions implemented by the Hong Kong government,” read a statement.

The bureau added that it had always consulted the Chinese foreign ministry on enforcing UN sanctions against Iran.

It is understood that the US Consulate General in Hong Kong approached local officials on Wednesday and warned that the city must not offer any services to any vessels carrying goods from countries sanctioned by the US. A tanker, the Pacific Bravo, fully laden with Iranian oil, was believed to be en route to the city.

The tanker is owned by China’s Bank of Kunlun, a China National Petroleum Corp (PetroChina) subsidiary also sanctioned by the US in 2012 for acting as the main conduit for deals with the Islamic Republic.

The bank has since switched to Euro and Chinese yuan to settle its payments. China is a top buyer of Iranian oil and nearly all its oil payments go through the bank.

Also some reports, including those by Reuters and Bloomberg, noted that the tanker had changed course to skip its original destination of Indonesia on Monday and docked in Sri Lanka instead. It had then set sail again on its way to the Strait of Malacca, likely to East Asia.

Hong Kong’s Marine Department said on Wednesday evening that it “has no information showing if the respective vessel will enter or pass by Hong Kong waters.”

Ship-tracking website Marine Traffic shows the oil tanker Pacific Bravo (red arrow) is now off Sri Lanka, likely en route to the Strait of Malacca, with its destination still set as Indonesia.

In April, US President Donald Trump stepped up measures to cut off Tehran’s oil exports – pillars of the country’s foreign exchange reserves – and scrapped waivers granted to key buyers including China, which has shrugged off US sanctions all along.

Washington reinstated sanctions against Iran’s oil industry in November, but allowed some buyers limited purchase quotas under a waiver program that expired on May 1.

“Anyone who does business with this ship, the Pacific Bravo, would be exposing themselves to US sanctions,” a senior American official said.

Earlier this month, a tanker called the Marshal Z carrying 130,000 tons of Iranian fuel oil unloaded its cargo at the Port of Ningbo-Zhoushan in the eastern Chinese province of Zhejiang.

Nonetheless, China has been importing less oil from Iran this year, about 500,000 barrels per day compared with a total of 800,000 barrels per day in 2018, representing a mere 5% of China’s total oil imports, according to Reuters.

It remains to be seen if Hong Kong’s latest rebuff risks souring the city’s ties with Washington further, following the talks by US politicians and lawmakers to scrap preferential trade treatment and separate customs jurisdiction recognition in light of the declining freedom and human rights protection in the former British colony.

US diplomats stationed in the city, now a special administrative region under Beijing, are also accused by the Chinese foreign ministry of leading a chorus of Western envoys and businessmen against a contentious amendment bill being proposed by the city’s government to allow rendition of fugitives to face trial or jail in mainland China.

US officials have also reportedly expressed frustration over Hong Kong’s slack execution of sanctions against Iran and North Korea, prodding the city to beef up enforcement, with an emphasis on scrutinizing locally-registered shell companies with covert business ties with the two regimes.


Associations drift back to Huawei membership


Despite the US government blacklist, many industry associations are restoring membership with telecom giant

By Asia Times staff

Several global technology associations, including the SD Association and Wi-Fi Alliance, have put Huawei back on their member lists, The Paper (sina.finance) reported.

As of Wednesday, SD Association, Wi-Fi Alliance, The Bluetooth Special Interest Group and the JEDEC Solid State Technology Association have all restored Huawei memberships, the report said.

The latter associations quietly updated their member lists on their official websites to include Huawei, it said.

These associations voluntarily suspended or restricted Huawei membership last Friday after the US government announced it would “blacklist” the Chinese telecom giant.

The associations claimed to be independent, however, as they moved fast to cut ties with Huawei after the US ban was announced, the report said.

Sources with knowledge of the matter explained that the associations would require some time to make clear the situation before they restore Huawei membership.

According to Huawei’s annual report, it has joined over 400 industry associations globally.

Source: Asia Times “Associations drift back to Huawei membership”

Note: This is Asia Times’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.