China wanted its tech R&D hub to become global leader. Then came trade war

At a new 400-acre research-and-development center on China’s south coast, Huawei Technologies Co. engineers chat, tap at their phones, or chill out on a small electric tram that whirs them between buildings modeled variously on the Sorbonne or England’s great universities. They move through neighborhoods built in the style of Versailles or Renaissance Italy, passing by some of the 3,000 gardening and maintenance staff needed to keep the vast parklands immaculate.

It’s late July, and on this Disneyland-like corporate campus about an hour and a half’s drive from Hong Kong, Huawei seems to be basking in the wealth from its leadership in 5G mobile technology. No other company has done more to project the image of a technologically advanced China on the international stage. And no other company stands as a greater symbol of China’s engagement with the outside world.

Huawei’s vaulting ambition to be at the forefront of future-defining technologies has landed the company in the crosshairs of the U.S. and other governments that see it as a conduit for the geopolitical objectives of the Chinese Communist Party. In mid-August the U.S. Department of Commerce, at President Trump’s direction, handed down yet another round of restrictions aimed at cutting Huawei’s access to commercially available computing chips it needs to make 5G base stations and smartphones.

The fortunes of China’s largest technology company by revenue are entwined with a vast project that’s now the front line of the hugely consequential tech war between the U.S. and China: the Greater Bay Area, a region tasked by President Xi Jinping with pushing the nation toward global technology leadership.

The GBA’s ability to innovate and integrate enough to succeed in that task is facing its stiffest challenge yet from a U.S.-led global backlash against Chinese tech and Beijing’s political crackdown in Hong Kong. If the GBA’s companies can surmount the obstacles being placed in their path, they could well determine how advanced and prosperous China can become under Xi.

The Pearl River Delta—long one of China’s richest and most economically dynamic regions and rebranded by Xi as the Greater Bay Area—stretches from the forested hills around Zhaoqing in the northwest to the concrete towers of Hong Kong Island in the southeast. It’s the epicenter of Xi’s strategy to attain high-income status, bind the former colonial centers of Hong Kong and Macao into the motherland, and complete what he calls the “rejuvenation” of the Chinese nation. He wants this region of about 70 million people to rival the clusters of Tokyo Bay or San Francisco-Silicon Valley and the role they play in driving innovation, entrepreneurship, and growth.

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Huawei reflects Xi’s grand vision for the Pearl River Delta. But as pressure from the Trump administration grows, executives of the company, which had a record $122 billion in sales last year, show signs of recognizing the changing, narrowing world in which they’re now living.

Guo Fulin, a two-decade veteran of the company who ran parts of its business in Europe and is now its president of international media affairs, deploys gnomic understatement to describe Huawei’s predicament. “The star in the sky will shine either to the west or to the east,” he says, meaning there will be opportunities for Huawei whether the U.S. slams the door shut or not. “We are not targeting every customer in the world. Customers who choose Huawei will eventually live better.”

With his actions—restricting sales of high-end semiconductors to Huawei, banning Americans from doing business with Tencent Holdings Ltd.’s WeChat app—Trump threatened revenue and product development at China’s most innovative companies. The importance of that is magnified by the timing of his actions, which come as China is upgrading its industries, with many sectors still in need of expertise from abroad to complete the development Xi expects.

China’s leaders maintain their public commitment to the open, globalized world economy that’s benefited the nation so handsomely over the past two decades. But Xi is also adopting inward-looking ideas of self-sufficiency in a shift back to an industrial model less integrated into global supply chains. That’s not necessarily in China’s interest, says David Dollar, a former U.S. Treasury emissary to the country who’s now a senior fellow at the Brookings Institution in Washington. “The danger is if you feel you have to respond to the U.S. protectionism with Chinese protectionism,” he says. “If you go down that road, then all this aspiration to become a more innovative economy is pretty hopeless.”

The Greater Bay Area strategy is rooted in an earlier time in Xi’s chairmanship that was all about China going out into the world through investment, acquisitions, and geopolitical partnership-building through initiatives such as the “Belt and Road” enterprise. First mooted by Shenzhen local authorities in 2014, and then elevated into a central government policy blueprint unveiled last year, the plan outlines the ambition to build a tech hub to “target the most advanced technologies and industries in the world.”

Far from Beijing and close to the open sea, the Pearl River Delta has long been China’s most mercantile and innovative place. The crowded islands that form Hong Kong and Macao remain separate jurisdictions even today, with their own laws, currencies, and political traditions shaped by the legacy of British and Portuguese colonialism. In Hong Kong, the differences between local society and the political culture across the border are a major source of friction, with hundreds of thousands of people in Hong Kong taking to the streets in often violent protests last year to push back against increased control by the Communist Party.

Standing among the futuristic towers of Shenzhen, just across the marshy borderland from Hong Kong, it’s easy to imagine the goal of technological leadership being within reach. In this city, mythologized as rising from a mere fishing village to a global metropolis within four decades, companies with a genuine claim to world leadership have their home.

More than a dozen Fortune Global 500 companies in the Guangzhou-Hong Kong-Shenzhen conurbation help drive a trillion-dollar economy that exports more than Japan does. The region spends double the national average on R&D, and Shenzhen alone accounts for more than a fifth of China’s high-end exports.

Huawei began in 1987 with its founder, Ren Zhengfei, repeatedly crossing the border, importing telephone switching gear from Hong Kong that he then resold to customers in China who were desperate for upgraded communications. Today the employee-owned company has sales in about 170 countries. At its corporate headquarters in Shenzhen, lavish reception rooms for visitors are modeled on Japan’s old Kyoto, with refreshments intended to make executives feel at ease before being pitched for deals on telecom hardware.

But the list of nations that see Huawei as a proxy for China’s geopolitical ambitions is growing. Following the U.S. lead, the U.K. is banning the company from its next-generation 5G networks and requiring that Huawei technology already installed in existing equipment be stripped out by 2027. Australia has shut the company out, as has Japan. India may curb Huawei and its tech neighbor in Shenzhen, ZTE Corp., from its networks as relations between the two states deteriorate.

This kind of tech decoupling could cost the world economy some $3.5 trillion in wasted output over the next five years, according to a report in July by Deutsche Bank AG. The costs arise from extra R&D, demand disruption, and supply chain rerouting that would become necessary if the current flow of know-how and parts—much of which already passes through China—shifts permanently.

That’s already happening at Huawei and, more broadly, in China. Huawei says that Trump sanctions enacted in May, which forbid companies using U.S. technology from supplying the Chinese company, cut it off from about 2% of its imported parts, which can’t be sourced elsewhere. To be able to completely replace lost technology could take Huawei an additional five to eight years, it says; outside estimates point to 10 years or more. That’s “a big loss for us,” Yu Chengdong, chief executive officer of Huawei’s consumer business group, said publicly in August.

Chinese leaders have frequently said that pressure from the outside will make the nation redouble its efforts to catch up technologically. There’s evidence that a broad push is under way to increase research and design capacity. Initial public offerings by Chinese semiconductor companies had raised a record $10 billion as of August as companies seek to localize supply chains.

That’s exactly the kind of duplication of effort that Deutsche Bank warns of, and there’s no guarantee that local companies can make up for what they’ve lost from the outside anytime soon. That could leave the GBA in the position of being a leading tech hub within and for China’s domestic market, but falling short of playing that role for the world.

Even as U.S. actions have hurt some tech companies in the Greater Bay Area, the Covid-19 pandemic has boosted others. The headquarters of Shenzhen Mindray Bio-Medical Electronics Co. is an appropriately clinical-looking, 35-story tower in Shenzhen’s Nanshan District. It manufactures, among other products, the SV800 and SV300 series of medical ventilators vital to treating patients severely affected by Covid-19.

The company’s three founders—including Li Xiting, a Singapore resident who was already the city-state’s second-richest man—had added about $17 billion to their combined wealth this year as demand soared. Mindray Vice President Huang Haitao says the company, which plows 10% of revenue back into R&D, aims to break into the global top 20 of medical equipment companies and push the industry’s frontiers into automation and artificial intelligence.

But Mindray, which says its medical equipment is used in the Johns Hopkins Hospital in Baltimore and at Mayo Clinic campuses, may not be immune from U.S. targeting forever. In August, as part of his presidential campaign, Democratic Party candidate Joe Biden vowed to end American reliance on Chinese medical equipment. “Some parts of our equipment are manufactured in the U.S.,” Huang says. “For the sake of supply chain safety, we’ll abide by all American and international laws. At the same time, we’re also actively developing backup plans, which include looking for alternative suppliers.”

Innovation in the GBA is driven largely by companies, not universities, making the pace of progress more susceptible to the business cycle and the fortunes of any individual company. There is no Berkeley or Stanford here. China’s best minds in science, technology, engineering, and mathematics still graduate from Tsinghua and Peking universities in the capital and Fudan University in Shanghai, thousands of kilometers away.

That’s an issue singled out by Eric Guo, chief artificial intelligence scientist at Guangdong Oppo Mobile Telecommunications Corp., the world’s fifth-largest smartphone manufacturer. The 36-year-old former Microsoft Corp. researcher has a Ph.D. from Purdue University in Indiana.

Sitting in corporate offices soon to be superseded by headquarters designed by Zaha Hadid, Guo praises the quality of life in Shenzhen. He points out that branches of China’s top-flight colleges are coming to Shenzhen, but more needs to be done, because the beauty and efficacy of university research is that it’s not constrained by making money in the short term. “Universities are the engines of innovation,” he says.

Less than 20 miles away, in central Hong Kong, it was university students who took to the streets during the summer of 2019, protesting first against a law that would erode the legal separation between the former British colony and the mainland, and then more generally against Beijing’s rule over the city.

In many ways, Hong Kong is doing what it’s always done—getting on with doing business with China—and it’s still the funnel through which most foreign direct investment flows into the wider GBA. But large parts of its population now see closer ties with the mainland as anathema, and rising tensions have divided a community that might have been expected to help knit together the GBA’s future economy.

That doesn’t bode well for what many in the business community see as the best long-term growth opportunities for either Hong Kong or the Greater Bay Area. “Hong Kong’s role is getting GBA companies to go global—a kind of adapter,” says Ben Simpfendorfer, founder of consulting firm Silk Road Associates. “Hong Kong needs to retain its connectivity to international markets.”

Beijing still pledges allegiance to the constitutional principle of “one country, two systems,” but the implementation of a national security law this past summer drew a quick response from the U.S., which removed a long-standing special trade privilege Hong Kong had enjoyed. That in itself “deepens pessimism” about the long-term business prospects in the city, according to a statement issued by the American Chamber of Commerce.

Policymakers in Beijing are plowing ahead with measures to ensure Hong Kong continues to play its role as the offshore financial center of the Greater Bay Area. The so-called Wealth Management Connect, for example, was announced in June, allowing residents in Hong Kong, Macao, and Guangdong to invest across the border.

But uncertainty is riding high. Nicholas Kwan, head of research for the Hong Kong Trade Development Council, stresses that without an open and connected business and political environment, the city can’t play its proper role in the broader strategy. “We can’t just be part of China,” he says. “We also have to be part of the rest of the world.”

Some would say the same of the Greater Bay Area. As it was when Deng Xiaoping opened the region to foreign investment four decades ago, China’s dynamic south has once more been handed the role of driving the nation’s rise. But in an era when China, like Huawei, is being challenged on all sides, grand economic growth projects like the GBA have no guarantee of success, and Xi’s plans for the region now hang in the balance. —With Edwin Chan, Gao Yuan, Venus Feng, and Iain Marlow

No plan to exclude Huawei, ZTE from 5G infra contracts: Sanjay Dhotre

 In a new twist to the saga over whether Chinese companies Huawei Technologies and ZTE can supply telecom gear, Minister of State for Electronics and Information Technology Sanjay Dhotre said the government had no plan to exclude them from 5G network infrastructure contracts.

Dhotre was giving a written reply to MPs’ queries in Parliament on Wednesday.

The announcement quells fears among some telcos that Chinese players might be banned from participating in 5G trials and roll outs. The Department of Telecommunications (DoT), while deposing before the IT parliamentary committee, had said a final decision on their fate would be taken by the Home Ministry. As a result, leading Indian telcos, taking their cue from the DoT, put in additional applications for collaboration with OEMs in cities where they had already given applications based on tie-ups either with Huawei or ZTE for 5G trials.

The telcos put in additional applications against the backdrop of growing escalation in border tensions between India and China, accompanied by a strong movement to ban Chinese products.

Even before the border skirmishes started, India had been under pressure from the US, which is campaigning across the world to ban the use of Chinese 5G gear on the grounds that it is allegedly used for spying. However, despite banning various popular Chinese apps, neither the DoT nor any other government department clarified its stand on Chinese telecom equipment companies. Telcos say they had been willing to withdraw the applications they had made with the Chinese companies if the government had communicated its intention clearly but with no clear signal, they decided to put in additional applications.

So, for example, according to sources, Huawei had tied up with Airtel and Reliance Jio in Bengaluru and with Vodafone Idea in Delhi. ZTE had tied up with Airtel for Kolkata.

But in July, the telcos felt compelled to give fresh applications in most of these cities, this time with Nokia, Ericsson or Samsung. For instance, Airtel gave an application with Ericsson in Bengaluru and with Nokia in Kolkata.

Reliance Jio, which had tied the knot with Huawei in Bengaluru, gave an additional application that it would do trials based on its own 5G technology, something it is already doing in Mumbai (where it also has an application with Samsung).

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“Many of the telcos have given additional applications, but the original applications have not been withdrawn. So we are still hopeful that it is not the end,” said the executive of a leading Chinese gear maker. Despite Communications Minister Ravi Shankar Prasad promising in June 2019 that the government will give 5G spectrum for trial runs in 100 days, telcos say they are still waiting for the green signal.

In the same month, the Wireless Planning & Coordination Cell (WPC) released a memorandum defining the scope of 5G technology trials with the aim of regulating licences. In line with this, the WPC was readying to allocate spectrum to telcos which had made requests in the 850 MHz, 3500 MHz and 26 GHz bands for the 5G trial runs.

However, the DoT raised concerns about the need to get security clearances before a telco could conduct 5G trials. Many telcos submitted applications for security clearances but heard nothing for a while.

In December, the DoT had a meeting with telcos and asked them to file applications by 15 January 2020. Later, the telcos were called, along with their OEM partners, for a presentation in the DoT on 20 January.

Meanwhile, apart from the new additional applications, Reliance Jio announced that it had developed its own 5G technology in July. Two days after the announcement, it asked the DoT for trial spectrum to test its technology in the 3500 MHz and the millimeter band for two years in Delhi and Mumbai. In its earlier application, it has made a request to test its own technology only in Mumbai.

Huawei to ByteDance: Big tech firms in a spot as China riles US, India

Huawei Technologies' founder Ren Zhengfei's global ambitions are marked in bricks and mortar at a new company campus in southern China, where the buildings are replicas from European cities.
Zhang Yiming, founder of ByteDance, the operator of short video app TikTok, has plastered his Beijing headquarters with posters including a cover of former Google CEO Eric Schmidt's book "How Google Works", and has long said he will build a global firm that can compete with U.S. tech giants.
But the two companies which best exemplify China's ambitions to challenge U.S. tech dominance are now stymied by strains in relations between China and countries including the United States, India, Australia and Britain.
Chinese companies with world-beating technology -- including drone-maker DJI, artificial intelligence firms Megvii, SenseTime and iFlytek, surveillance camera vendor Hikvision and e-commerce conglomerate Alibaba Group -- are also among those losing access to markets.
Smaller companies are being forced to re-think too.
"What we are experiencing now is unprecedented," said a Chinese startup founder who has operations in the United States and India but asked not to be identified as he is now considering walking away. "My entrepreneurial spirit has been dampened due to all this, let alone global ambitions."
It's a big shift from even a year ago, when the U.S.-led trade war with China and security concerns about Huawei were having little impact on most Chinese tech champions.
SenseTime and Megvii, backed by U.S. investors, were eyeing big IPOs. ByteDance's TikTok unit was enjoying unfettered global growth. Alibaba was touting the global prospects for its cloud business, and DJI was consolidating domination of the drone business.
But then came new U.S. sanctions against Chinese tech firms last October, prompted in part by repression of the Muslim Uighur population in the Western province of Xinjiang.
U.S. President Donald Trump has ratcheted up anti-China rhetoric as he seeks re-election and Chinese President Xi Jinping has taken a tough line. Tensions have also risen between Beijing and other countries over new security laws passed for Hong Kong, and a border skirmish with Indian troops led to an India government ban on 59 Chinese apps.
Now China's top tech players are having contracts cancelled, products banned and investments blocked, with more restrictions on the horizon.
ALSO READ: Explained: How India's making TikTok alternatives for users in Bharat
ByteDance could be forced to sell TikTok as Washington considers following India in banning the short video app, a global product that analysts say is worth at least $20 billion.
Huawei is set to lose billions of dollars a year in revenue from bans on its network equipment, and more countries could follow the United States, Britain and others in blocking the company's gear.
The U.S. Interior Department has grounded the privately held DJI's fleet and halted additional purchases because of data security risks, and more restrictions could be in the offing.
Alibaba Group is cutting staff at its UC Web subsidiary in India after its popular mobile Web browser was banned by the government. DJI has put IPO plans on ice.
The companies are watching geopolitical developments "with white knuckles," said Daniel Ives, managing director of equity research at Wedbush Securities.
Huawei, Alibaba, SenseTime and Megvii declined to comment. ByteDance and Tencent did not respond to requests for comment.
China's foreign ministry said it encourages and directs the country's "strong, reputable companies" to invest overseas in a compliant manner, and hopes other countries will safeguard the legitimate rights and interests of Chinese companies.
"International investment is an important engine driver for economic growth. As the global economy is under tremendous downward pressure, all parties should take strong measures to jointly further liberalise and facilitate trade and investment, and create a fair, transparent, and predictable investment environment," it said in a fax.
Bright spots
Investors said some less sensitive sectors such as gaming are still open to Chinese players.
Tencent Holdings has had some of its apps in India banned, but not popular games such as PlayerUnknown's Battlegrounds. The company recently launched a new California-based gaming studio and plans more such operations.
A huge domestic market is by far the biggest profit centre for China's tech firms, and some countries remain keen to accept Chinese investment.
"Global markets are big and Southeast Asia and Europe should still be open to Chinese companies," said one Beijing-based, internet-focussed hedge fund investor.
But some startups in Southeast Asia that were previously open to taking Chinese money are becoming more reluctant, said David Chang, managing director of Hong Kong-based MindWorks Capital.
"For example, if I take ByteDance on my (equity) capitalization table and then ByteDance gets blocked and blacklisted in the U.S., my dream of listing on the Nasdaq is limited," he said, referring to the U.S. stock exchange popular with tech firms.

ALSO READ: US, China clash to impair global trade vital for India's reopening: Rajan
Efforts by Chinese companies to change the minds of the foreign regulators have had little effect in the absence of policy changes by Beijing.
ByteDance says it has ring-fenced TikTok from its China operations and poached a Disney executive to head the unit. That has failed to assuage Washington.
"That's about all you can do," said Mark Natkin, managing director at Beijing-based Marbridge Consulting. "Push the public relations as hard as you can, hire managers that give you more of a foreign feel, and keep your fingers crossed that there isn't another geopolitical flashpoint."

US to restrict visas for Huawei, says it has 'business with rights abusers'

Secretary of State Mike Pompeo took fresh aim at China on Wednesday, saying the United States would impose visa restrictions on Chinese firms like Huawei Technologies Co Ltd that he accused of facilitating human-rights violations.
Pompeo also said telecommunications companies around the world "should consider themselves on notice" that if they do business with Huawei, "they are doing business with human-rights abusers."

Pompeo said Washington hoped to have another set of decisions shortly on Chinese telecoms firms that would reflect the need to protect U.S. citizens' data from Beijing.
Pompeo told a news conference the State Department would "impose visa restrictions on certain employees of Chinese technology companies like Huawei that provide material support to regimes engaging in human-rights violations and abuses globally."
He also said that "faster is always better" in terms of getting Huawei out of telecoms infrastructure when asked about British Prime Minister Boris Johnson's order that Huawei equipment be purged completely from Britain's 5G network by the end of 2027.
When asked in a later live-streamed interview with political website the Hill about his recent remarks that Washington was looking at banning Chinese social media app TikTok, Pompeo said:
"Whether it is TikTok or any of the other Chinese communications platforms, apps, infrastructure, this administration is taking seriously the requirement to protect the American people from having their information end up in the hands of the Chinese Communist Party."
In a separate statement referring to alleged abuses against China's minority Muslim population, Pompeo charged that Huawei was "an arm of the Chinese Communist Party's surveillance state that censors political dissidents and enables mass internment camps in Xinjiang and the indentured servitude of its population shipped all over China."
Huawei denies it spies for China and says Washington wants to frustrate its growth because no U.S. company offers the same technology at a competitive price.
A Huawei spokeswoman rejected Pompeo's comments.
"Huawei operates independent of the Chinese government. We are a private, employee-owned firm. We are disappointed by this unfair and arbitrary action to restrict visas of our employees," she said.
Pompeo's latest announcement targeting China comes after President Donald Trump on Tuesday ordered an end to Hong Kong's special status under U.S. law to punish Beijing for "oppressive actions" against the former British colony, prompting Beijing to warn of retaliatory sanctions.
U.S.-China ties are at the lowest ebb in decades with relations strained over the global coronavirus pandemic, China's military buildup in the South China Sea, its treatment of Uighur Muslims and Beijing's massive trade surpluses.
Even so, Pompeo said Washington remained "hopeful" China would complete its requirements under Phase 1 of a trade deal it reached with Trump in January and that "we will see changes in the behavior across the entire spectrum where they have unfairly treated America for far too long."
Pompeo told the news briefing he would leave for a short visit to Britain and Denmark on Monday and China's "threat to free peoples around the world" would be high on the agenda. He said he also expected to discuss Huawei.

US says Huawei, Hikvision backed by Chinese military; sanctions may follow

The Trump administration has determined that top Chinese firms, including telecoms equipment giant Huawei Technologies and video surveillance company Hikvision, are owned or controlled by the Chinese military, laying the groundwork for new US financial sanctions, according to a document seen by Reuters on Wednesday.
A US defense official, speaking on condition of anonymity, confirmed the authenticity of the document and said it had been sent to Congress. Washington placed Huawei on a trade blacklist last year over national security concerns and has led an international campaign to convince allies to exclude it from their 5G networks.

The list of 20 companies that Washington alleges are backed by the Chinese military and operate in the United States was first reported by Reuters. It also includes China Mobile Communications Group and China Telecommunications Corp as well as aircraft manufacturer Aviation Industry Corp of China.
The designations were drawn up by the Defense Department, which was mandated by a 1999 law to compile a list of Chinese military companies operating in the United States, including those "owned or controlled" by the People's Liberation Army that provide commercial services, manufacture, produce or export.
The Pentagon's designations do not trigger penalties, but the law says the president may impose sanctions that could include blocking all property of the listed parties.
ALSO READ: Pompeo declares Reliance Jio 'clean' for spurning Huawei telecom gear
Huawei, Hikvision, China Mobile, China Telecom, AVIC and the Chinese Embassy in Washington did not respond to requests for comment.
The Pentagon has come under pressure from lawmakers of both US political parties to publish the list, amid rising tensions between Washington and Beijing over technology, trade and foreign policy.
Last September, top US Senate Democrat Chuck Schumer, Republican Senator Tom Cotton and Republican Representative Mike Gallagher penned a letter to Defense Secretary Mark Esper raising concerns about Beijing's enlisting of Chinese corporations to harness emerging civilian technologies for military purposes.
"Will you commit to updating and publicly releasing this list as soon as possible?" they asked in the letter.
On Wednesday, Cotton and Gallagher praised DOD for releasing the list and urging the president to impose economic penalties against the firms.
ALSO READ: US to allow companies to work with Huawei on non-sensitive 5G tech
The White House did not comment on whether it would sanction the companies on the list, but said it saw it as "a useful tool for the U.S. Government, companies, investors, academic institutions, and likeminded partners to conduct due diligence with regard to partnerships with these entities, particularly as the list grows."
The list will likely add to tensions between the world's two largest economies, which have been at loggerheads over the handling of the coronavirus pandemic and China's move to impose security legislation on Hong Kong, among multiple points of friction that have worsened this year.
Last week, China threatened retaliation after President Donald Trump signed legislation calling for sanctions over the repression of China's Uighurs.
The list "is a start, but woefully inadequate to warn the American people about the state-owned and -directed companies that support the Chinese government and Communist Party's activities threatening U.S. economic and national security," Republican Senator Marco Rubio, who sponsored the Uighur bill, said in a statement.
SPOTLIGHT ON US TIES
The list will also turn a spotlight on U.S. companies' ties to the Chinese firms as well as their operations in the United States.
In 2012, U.S.-based General Electric Co set up a 50/50 avionics joint venture with AVIC, known as Aviage Systems, to supply equipment for China's C919 passenger jet.
The Defense Department list also includes China Railway Construction Corp, China Aerospace Science and Industry Corp (CASIC), as well as CRRC, the world's largest maker of passenger trains, which has clinched contracts in Boston, Philadelphia, Chicago and Los Angeles by underbidding rivals.
The companies did not immediately respond to requests for comment.
Many of the companies listed are already in the crosshairs of U.S. regulators. Both Huawei and Hikvision were added to a Commerce Department blacklist last year, which forces their U.S. suppliers to seek licenses before selling to them.
In April, the U.S. Justice Department and other federal agencies called on the Federal Communications Commission to revoke China Telecom (Americas) Corp's authorization to provide international telecommunications services to and from the United States. The telecoms regulator rejected a similar request by China Mobile last year that had been pending for years.

Govt shouldn't allow Huawei for trials of 5G, SJM tells Narendra Modi

Urging Prime Minister Narendra Modi to intervene, the RSS-affiliated Swadeshi Jagran Manch (SJM) said that Huaweishould not be allocated airwaves for 5G network trials to ensure that India’s security interests are not compromised. In a letter to Modi, the outfit claimed that there are evidences that lead to suspicion of Chinese firms indulging in exfiltrating sensitive information from, devices and equipment that it exports. SJM’s co-convener Ashwani Mahajan said the organisation has made representations to the DoT cautioning and alerting it of “various threats Huawei brings in”.

Huawei gets govt's approval to participate in 5G trials in the country

The wait may be finally over for Chinese telecom gear maker Huaweias the government has allowed all equipment manufacturers to conduct 5G trials in the country, without making any distinction.
“We have taken a decision to give 5G spectrum for trials to all players,” Telecom Minister Ravi Shankar Prasad said on Monday. “5G is future, it is speed. We will encourage new innovation in 5G.”
The decision provides a breather to the Chinese firm, which is battling security issues not just in India but worldwide.
“We have read the news in media and we thank the Indian government for their continued faith in Huawei. We firmly believe that only technology innovations and high-quality networks will be the key to rejuvenating the Indian telecom industry. We have full confidence in the Indian government and industry to partner with best technology for India’s own long-term benefit and also for cross-industry development. Huawei is committed to India,” said Jay Chen, chief executive officer, Huawei India.
The second half of the calendar year saw Huawei battling to reserve its space in India’s 5G footprint. The government had constituted a panel, headed by its principal scientific advisor, to decide on Huawei’s participation in the 5G trials. The trials would establish used cases in the country as a precursor to the full-fledged launch of the 5G services.
Huawei came under a cloud after allegations that the firm’s electronic and telecom devices helped China spy on US corporations and agencies. Huawei has been barred in Australia, and Japan. Russia, Turkey, and Saudi Arabia have welcomed it.
The Huawei India CEO had earlier said the company wants to tap India, which proposes to be the second-biggest 5G market. He had also said India is a very unique market. “You need to deeply understand it and have a long-term strategy,”he had said.
Bharti Airtel Chairman Sunil Bharti Mittal had also come out in support of Huawei. Speaking at the World Economic Forum, Mittal had said the company, in over the last decade, had become very good with its products.
"To a point where I can safely say their products in 3G and 4G that we have experienced, are significantly superior to Ericsson and Nokia. I use all three of them," Mittal had said. Huawei has been trying to compete with its rivals such as Nokia, Ericsson, and Samsung to become the top player in 5G. It has so far secured 50 commercial 5G contracts — 28 in Europe, 11 in central Asia, six in Asia-Pacific, four in South America and one in Africa. The government has begun the process of auctioning the next-generation 5G spectrum with the aim of improving data speed and bringing in Internet of Things, which will enable robotic surgeries and driverless cars among a host of other things.
On December 20, the Digital Communications Commission, the apex decision-making body, at the telecom department approved the auctions across 22 circles. A lion's share, 6050 MHz, has been set aside for 5G spectrum.
Huawei gets govt's approval to participate in 5G trials in the country

Will give 5G spectrum for trials to all players, including Huawei: Prasad

India will not bar any equipment suppliers, such as China's Huawei, in the upcoming trials for 5G, with Telecom Minister Ravi Shankar Prasad on Monday saying the government will allocate airwaves to all telecom service providers for conducting trials of super-fast speed 5G networks.
Huawei rivals western equipment makers, such as Ericsson, and is banned in the US. Many countries, however, have allowed telecom service providers to use Chinese gears. And now, India has also indicated its unwillingness to keep any company out of 5G trials.

The government has decided to give 5G spectrum for trials to all operators in the country, Prasad said on Monday on the sidelines of a telecom event.
This implies that all operators, backed by equipment vendors they have decided to partner with, will be able to participate in the upcoming 5G trials in the country, and the stance is expected to spell a relief for Chinese gear maker Huawei.
"The age of 5G is coming... We have taken a decision to give 5G spectrum for trials to all the players," Prasad said.
An in-principle decision has been taken in this regard, Prasad said adding that the telecom department will work out the details.
"I would like new innovations by Indian players in 5G. 5G is future, it is speed. Therefore, we will encourage new innovations in 5G," the minister said.
Asked specifically about the status of Huawei as the government has decided to allow all telecom operators and equipment makers for 5G trials, the minister said, "All players mean all players".
When contacted, Huawei India CEO Jay Chen said in a e-mail statement that the company firmly believes that only technology innovations and high-quality networks will be the key to rejuvenating the Indian telecom industry.
Thanking the Indian government for their continued faith in the company, Chen said, "We have our full confidence in the Modi government to drive 5G in India. We have our full confidence in Indian government and industry to partner with best technology for India's own long-term benefit and also for cross-industry development." Huawei is committed to India, the company said.
The 5G trials are widely-expected to begin in the last quarter of the current financial year. Sources had recently said the government has received seven applications for 5G trials and added that all operators and vendors (including Nokia, Ericsson, Huawei, ZTE and Samsung) are keen to participate.
In September this year, Huawei had said it is hopeful that the Indian government will treat all foreign investments "fairly" and had urged the world's largest democracy to make an "independent decision" on permitting 5G trials in the country.
At that time, the Chinese firm had also sought to assure the Indian government that the company is fully compliant with regulations in India, and of addressing concerns around cybersecurity.
Earlier this year, the US had banned Huawei, the world's leader in telecom equipment and the number two smartphone producer, over concerns of security and Washington had been pressuring other countries to restrict the operations of the Chinese telecom firm.
The US President Donald Trump-led administration had placed Huawei and its affiliates on a blacklist, a move that banned the Chinese telecom equipment company from purchasing parts and components from American firms without the US government approval. However, it had subsequently relaxed some of the restrictions, to reduce disruption for its customers.

Keeping us out of 5G will be a loss to industry, users: Huawei India CEO

Chinese telecom equipment maker Huawei has asserted that keeping the company out of the 5G play in India will be a "loss" to telecom operators, end consumers and vertical industries that could be potential beneficiaries of the futuristic technology.
Huawei India CEO Jay Chen told PTI that that the company does not wish to get caught in geopolitical crossfire, and that it remains fully committed to complying with the laws of the land, riding on the strength of its technology.

The comments assume significance as the US has blacklisted Huawei and is now persuading its allies to block the world's largest provider of networking gear and No.2 smartphone maker from their new mobile networks.
Chen said it is now an "accepted fact that Huawei's technology is much ahead of the industry", and that the company is a "frontrunner in 5G".
"So keeping us out will be loss to Indian operators, vertical industries as well as the end consumer. We are confident of the Indian government taking an independent and unbiased decision that provides level-playing-field for all players of the country, one that is guided by policy, standards and procedure and not based on the country of origin or speculative allegations lacking evidence," Chen said.
Chinese telecom gear makers Huawei and ZTE have recently been granted permission by the Telecom Department to proceed with 5G 'use cases' demos at upcoming the India Mobile Congress (IMC).
Huawei on Thursday had welcomed the nod for IMC, and said the green signal sends a "positive message" and will bolster industry's confidence to work with the company.
The company has exuded confidence that it will be given permission to participate in 5G trials in India.
Amid a US push for a global ban on Huawei over "security issues" ahead of 5G adoption, Indian telecom tycoon Sunil Bharti Mittal earlier this month threw his weight behind the Chinese firm, saying its products are "leading edge" and "superior" to rivals, and asserted that the firm "should be in play" in India.
Mittal's strong endorsement for the telecom equipment manufacturer came even as US Secretary of Commerce Wilbur Ross, speaking at a World Economic Forum event in New Delhi, had said the Trump administration's opposition to the Chinese company was not about protectionism but "genuine security risks" that go beyond the front-end equipment, percolating to even areas such as upgrades and maintenance.
Huawei had recently offered to exclusively license its 5G technology to a US player to ensure a level playing field for rivals.
Asked if Huawei is open to a similar arrangement for India (a point that Mittal too had alluded to), Chen said, "For India there have been no discussions with any company on this subject. So we cannot really comment on a future speculation."
India is yet to take a call on whether it intends to place curbs on Huawei or allow the firm to participate in upcoming 5G trials. The central government has made it clear that it will keep national interest in mind while deciding on the issue.

Huawei founder asks employees to brace for company's 'live-or-die moment'

China's Huawei  will spend more on production equipment this year to ensure supply continuity, cut redundant roles and demote inefficient managers as it grapples with a "live-or-die moment" in the wake of US export curbs, founder Ren Zhengfei said.
His remarks come as the United States said this week it will extend by 90 days a reprieve that permits Huawei Technologies to buy components from US companies to supply existing customers, but it also moved to add more than 40 of Huawei's units to its economic blacklist.

In a memo sent to employees on Monday loaded with military metaphors, 74-year-old Ren asked staff to work aggressively towards sales targets as the firm goes into "battle mode" to survive the crisis.
"The company is facing a live-or-die moment," Ren, a former Chinese army officer, said in the memo, which was seen by Reuters. Huawei confirmed the contents of the memo.
"If you cannot do the job, then make way for our tank to roll; And if you want to come on the battlefield, you can tie a rope around the 'tank' to pull it along, everyone needs this sort of determination!"
Huawei is a key theme in a broader, year-long US-China trade war, with Washington slapping it with the trade ban in May citing national security risks. Huawei, however, posted a 23% revenue jump in the first half, helped by strong smartphone sales in its home market.
Ren said in the memo, "In the first half, our results looked good, it is likely because our Chinese clients were sympathetic and made payments in time, the big volume made cash flow look good, this doesn't represent the real situation." But he expressed confidence in Huawei's full-year results and said it needs to "spend the money and solve the production continuity issue" by ramping up strategic investment on things including production equipment.
According to the memo, Huawei, which employs nearly 190,000 people around the world, is reforming its operation globally by granting more power to the frontline, cutting out reporting layers and eliminating inefficient posts.
"In 3-5 years time, Huawei will be flowing with new blood," Ren said. "After we survive the most critical moment in history, a new army would be born. To do what? Dominate the world," Ren said.
While Ren said in June the ban was worse than expected and that Huawei's revenue may stay flat in the next two years, in the memo he called on staff to try their best in meeting the sales target outlined at the start of the year before the ban - which was to grow its revenue to around $125 billion from more than $100 billion in 2018.
He also warned of cash flow risk if receivables are not paid in time. He asked staff to be conservative in ensuring dues were paid in time by clients, because otherwise the lack of liquidity could be fatal to the company.

US to extend Huawei's partial reprieve on supply curbs for 90 days

The U.S. Commerce Department is expected to extend a reprieve given to Huawei Technologies that permits the Chinese firm to buy supplies from U.S. companies so that it can service existing customers, sources familiar with the situation said.
The "temporary general license" will be extended for Huawei for 90 days, the sources said.

The extension renews an agreement set to lapse on August 19, continuing the Chinese company's ability to maintain existing telecommunications networks and provide software updates to Huawei handsets.
The situation surrounding the license, which has become a key bargaining chip for the United States in its trade negotiations with China, remains fluid and the decision to continue the Huawei reprieve could change ahead of the Monday deadline, the sources said.
U.S. President Donald Trump and Chinese President Xi Jinping are expected to discuss Huawei in a call this weekend, one of the sources said.
The world's largest telecommunications equipment maker is still prohibited from buying American parts and components to manufacture new products without additional license approvals.
The U.S. government blacklisted Huawei alleging the Chinese company is involved in activities contrary to national security or foreign policy interests.
The United States says Huawei's smartphones and network equipment could be used by China to spy on Americans, allegations the company has repeatedly denied.
The Commerce Department late on Friday declined to comment, referring to Commerce Secretary Wilbur Ross's comments to CNBC television earlier this week in which he said the existing licenses were in effect until Monday.
Asked if they would be extended he said: "On Monday I'll be happy to update you."

China warns of 'consequences' to Indian firms if Huawei is blocked: Sources

China has told India not to block its Huawei Technologies from doing business in the country, warning there could be consequences for Indian firms operating in China, sources with knowledge of the matter said.
India is due to hold trials for installing a next-generation 5G cellular network in the next few months, but has not yet taken a call on whether it would invite the Chinese telecoms equipment maker to take part, telecoms minister Ravi Shankar Prasad has said.

Huawei, the world's biggest maker of such gear, is at the centre of a geopolitical tug-of-war between China and the United States. US President Donald Trump's administration put the company on a blacklist in May, citing national security concerns. It has asked its allies not to use Huawei equipment, which it says China could exploit for spying.
Two sources privy to internal discussions in New Delhi said India's ambassador in Beijing, Vikram Misri, was called to the Chinese foreign ministry on July 10 to hear China's concerns about the US campaign to keep Huawei out of 5G mobile infrastructure worldwide.
During the meeting, Chinese officials said there could be "reverse sanctions" on Indian firms engaged in business in China should India block Huawei because of pressure from Washington, one of the sources said, citing a readout of the ambassador's meeting.
The Indian foreign ministry did not respond to a request for comment. China's foreign ministry also did not respond to a Reuters request for comment on the matter.
Tensions over trade, territory
Indian companies have a far smaller presence in China than other major economies. But firms including Infosys, TCS, Dr Reddy's Laboratories Reliance
Industries and Mahindra & Mahindra have a foothold there in manufacturing, healthcare, financial services and outsourcing.
A potential row over Huawei could revive tensions in the broader India and China relationship just as the two sides have been making high-level efforts to ensure their long standing territorial disputes do not escalate.
In October, Prime Minister Narendra Modi will host Chinese President Xi Jinping in the sacred Hindu city of Varanasi, his parliamentary constituency in northern India, where the two are expected to address trade issues including a $53 billion trade deficit in 2018/19 that India is concerned about.
The main group tied to Modi's ruling alliance, which has a long-standing distrust of China and promotes self- reliance in the economy, has stepped up criticism of Huawei.
In a letter written to Modi last week, Ashwani Mahajan, the head of the economic wing of the Rashtriya Swayamsevak Sangh, said there were concerns about the operations of Huawei in India.
"We as a country are not yet sure of relying on Huawei. Globally, the Chinese companies, including Huawei, are facing allegations that they 'underbid' projects, and position themselves and their establishment back home to snoop and enable them to shut remotely, if required be," he wrote.
Secuirty Concerns Allayed
Minister Prasad told parliament that six proposals have been received for 5G technology trials, including from Huawei. He did not name the others, but firms such as Sweden's Ericsson Finland's Nokia and South Korea's Samsung Electronics are expected to participate.
A high-level group of officials, led by the Principal Scientific Advisor to the Indian government Dr. K Vijay Raghavan and including representatives from the departments of telecoms, information technology and the intelligence services, has been looking into whether to open the 5G trials to Huawei.
The committee has found no evidence to suggest Huawei has used "back-door" programmes or malware to collect data in its current operations in India, the first source and another official in the federal telecoms ministry said.
The interior ministry, which is responsible for the security of the infrastructure, had issued no directive to curtail Huawei's entry, the telecoms official said.
"We can't simply reject them just because they are Chinese," said the official.
One option that a tech expert at the government's National Security Advisory Board (NSAB) has suggested is to ensure the hardware and software for the proposed fifth-generation network are not both sourced from Huawei.
The government should get wireless carriers who will be rolling out 5G services to use Indian-made software to drive equipment supplied by gearmakers such as Huawei, NSAB expert V.Kamakoti said in a recent internal presentation reviewed by Reuters.

Huawei secretly helped N Korea build commercial wireless network: Report

Huawei Technologies Co Ltd , the Chinese company put on a U.S. black list because of national security concerns, secretly helped North Korea build and maintain its commercial wireless network, the Washington Post reported on Monday, citing sources and internal documents.
The Chinese telecommunications giant partnered with a state-owned Chinese firm, Panda International Information Technology Co Ltd., on a number of projects in North Korea over at least eight years, the Post reported.

Such a move would raise questions of whether Huawei, which has used U.S. technology in its components, violated American export controls to furnish North Korea with equipment, according to the Post.
The United States put Huawei on a blacklist in May, citing national security concerns. The move banned U.S. companies from selling most U.S. parts and components to Huawei without special licenses but President Donald Trump said last month American firms could resume sales in a bid to restart trade talks with Beijing.
Huawei did not immediately respond to a request for comment, but said in a statement to the Washington Post it had "no business presence" in North Korea. It was not immediately possible to reach the Panda Group.
The Commerce Department, which also did not immediately respond to a request for comment, has investigated possible links between Huawei and North Korea since 2016 but has not publicly connected the two, the Post said.
Huawei and Panda vacated their Pyongyang office in the first half of 2016, the newspaper reported.

Huawei's latest salvo against US govt: files lawsuit over seized equipment

Huawei Technologies Co Inc filed a lawsuit against the US Commerce Department on Friday challenging whether telecommunications equipment it sent from China to the United States, and then back to China, is covered by Export Administration Regulations, according to a court filing.
The lawsuit is the latest salvo in a battle between the US government and Huawei. Washington says the Chinese company's telecommunications gear could be used by Beijing to spy. Huawei denies that is the case.

In the lawsuit, Huawei said that it shipped telecommunications equipment from China, including a computer server and Ethernet switch, to a testing laboratory in California. After the testing was done, the equipment was shipped back to China. No application for a license was made because none was needed, the lawsuit claims.
But the equipment was seized in Alaska by the US government, and no decision has been made about whether a license is required to ship it, the filing said.
"The equipment, to the best of Huawei Technologies USA's knowledge, remains in a bureaucratic limbo in an Alaskan warehouse," Huawei said in its lawsuit.
The Commerce Department did not immediately respond to a request for comment.
Huawei contends that the equipment did not require a license because it did not fall into a controlled category and because it was made outside the United States and was being returned to the same country from which it came.
Huawei asked for the equipment to be either released for shipment or for the Commerce Department to decide that it was shipped illegally.
In May, the Trump administration added Huawei to the entity list, barring it from buying needed US parts and components without US government approval. US President Donald Trump has said the United States could resolve complaints about Huawei as part of a trade deal.
Huawei Chief Financial Officer Meng Wanzhou, daughter of the company's founder, has been detained in Canada since December on a US warrant. She is fighting extradition on charges that she misled global banks about Huawei's relationship with a company operating in Iran.
Shortly after her detention, Chinese authorities detained two Canadians citizens, charging them with espionage.

Huawei obtains 46 commercial 5G contracts from 30 countries despite US ban

Chinese telecom giant Huawei said it has obtained 46 commercial 5G contracts so far in 30 countries and shipped more than one lakh 5G stations globally, emerging as a top player in the race for setting up the super-fast telecommunications system despite the US ban on use of its 5G services.
The Shenzhen-headquartered firm, which is under immense pressure after the US issued the ban warning that Huawei systems could be manipulated by Beijing to spy on other countries and disrupt critical communications, made the announcement on Thursday in a press statement.

China's Ministry of Industry and Information Technology on Thursday granted commercial-use 5G licenses to four state-owned telecom giants to start rolling out 5G services, signalling Beijing's determination to be the global leader in setting up superfast wireless networks.
It issued licences to China Broadcasting Network and the country's top three telecom operators -- China Telecom, China Mobile and China Unicom.
The company said it was well prepared for China's 5G commercial use. In February last year, it made the world's first 5G call and launched the first 5G terminal device.

Huawei is caught in the intensifying trade war between China and the US after President Donald Trump imposed tariffs on USD 200 billion on Chinese goods, prompting Beijing to hike duties on USD 60 billion in American products. The dispute has snowballed into a tech war with the US urging nations to shun the company in 5G networks.
The concerns have escalated as Huawei has risen to become the world leader in telecom networking equipment and one of the top smartphone manufacturers alongside Samsung and Apple.
However, details of the countries where the company has managed to obtain the contracts have not been revealed, official media here reported.
5G is the next generation cellular technology with download speeds stated to be 10 to 100 times faster than the current 4G LTE networks. Apart from much faster data download and upload speeds, 5G technology promises wider coverage and more stable connections.
The 5G technology will establish a high-speed, mobile, safe and widespread new-generation information infrastructure, MIIT Minister Miao Wei said at the licence presentation
Some countries, including Australia and New Zealand, have blocked Huawei from supplying equipment for 5G mobile networks.
However, Russian President Vladimir Putin backed Huawei saying that action against by western countries led by the US is an attempt to push it out of the global market which is beginning of the of a technological war.
The firm's proactive battles in US courts signal it is willing to use all means, including national courts, to prevent exclusion from a race to the 5G market -- the future of high-speed telecommunications.

Telecom companies begin dropping Huawei phones as US crackdown bites

Wireless operators are scrapping plans to sell Huawei mobile phones as the Chinese equipment giant reels from a supply ban imposed by U.S. President Donald Trump.
Carriers in Japan, Taiwan and Britain stopped taking early orders for newer smartphone models from Huawei Technologies Co. on Wednesday or shelved plans to offer its handsets equipped for new fifth-generation wireless networks.
Trump’s move last week to put Huawei on an export blacklist amid a trade war with Beijing threatens to cut the tech company off from U.S. software and component suppliers. Telecom operators fear that could affect the functioning of its newest handsets as Huawei won’t get access to the most popular version of the Android mobile operating system developed by Alphabet Inc.’s Google.
If the boycotts multiply, it would be a major blow to Shenzhen-based Huawei, which is trying to overtake Korea’s Samsung Electronics Co. as the world’s No.1 handset supplier this year after already leapfrogging Apple Inc. Mobile phones and other devices in Huawei’s consumer business account for almost half of its revenue.
Over a billion smartphones are sold annually worldwide and many are bought wholesale by telecom operators who include them in their wireless subscription plans for a monthly fee, making them a vital sales channel.
ALSO READ: Huawei's Honor will continue to grow in the industry, says top official
Britain’s BT Group Plc decided not to include Huawei phones in Britain’s first 5G network because of uncertainty over whether they could use Android, a spokesman for the carrier said.
“We’ve put the Huawei devices on pause until we’ve got a bit more information on that,” the head of BT’s consumer division Marc Allera told reporters ahead of the start of 5G services next week.
Rival Vodafone Group Plc paused pre-orders for the Huawei Mate 20X (5G) in the U.K. as “a temporary measure while uncertainty exists regarding new Huawei 5G devices,” a spokesman said.
NTT Docomo Inc., Japan’s largest operator, said it stopped taking pre-orders for Huawei’s new P30 handset and KDDI Corp. delayed the introduction of the phone indefinitely, without elaborating. SoftBank Corp.’s YMobile announced a similar move, citing concerns over the availability of software updates. Taiwanese carrier Chunghwa Telecom Co. said it won’t procure new Huawei models.
Anxious consumers
Huawei phones developed and certified by Google before May 16 will still get access to Google’s Play app store and its pre-loaded apps and services. Updates from Google will continue as they are transactions between Google and end users, not Google and Huawei.
However, Google won’t be allowed to work with Huawei on software bugs and other technical fixes. Instead, the Chinese firm will have to do this on its own, using the open-source version of Android.

ALSO READ: Huawei's India journey hits a wall as US tech giants up the ante
Some owners of Huawei phones around the world took to social media to express concern over the potential impact on their handsets. Huawei’s marketing team assured customers their phones would continue to be safe and usable.
Should Google’s system no longer be available, “then the alternative option will naturally come out -- either from Huawei or someone else,” Abraham Liu, Huawei’s representative to the European Union institutions, said at an event in Brussels on Tuesday.
Europe is a vital market for Huawei’s consumer business because of its appetite for high-end phones. The company is also the region’s biggest supplier of mobile network equipment and has staked out a core role in rolling out 5G networks worth billions of euros. Huawei is already effectively barred from the U.S.
With U.S. allies under growing pressure to restrict Huawei, carriers have been reviewing their ties to the company and devising back-up plans in case of bans or supply disruption.
In the U.K., BT plans to remove Huawei from the core of its EE unit’s 4G network, while giving it a major role supplying 5G infrastructure.
The Trump blacklist “affects the devices more than it does the radio access network,” said BT’s Chief Technology Officer, Howard Watson. “There are also U.S. suppliers to Huawei radio access equipment. That’s something we’re monitoring very closely as well.”
A spokesman for Huawei in the U.K., commenting on the smartphone decision by BT’s mobile unit EE, said: “Our priority remains focusing on our customers and their requirements. We look forward to continuing our successful collaboration with EE.”

Huawei extradition case begins, widening rift between China and Canada

Canada has officially ordered the start of extradition hearings against Huawei Technologies Co. Chief Financial Officer Meng Wanzhou, in a proceeding that promises to be long and politically explosive.
Canada’s Department of Justice issued a formal “authority to proceed” after reviewing the U.S. request that Meng be handed over to face fraud charges, according to a statement Friday. The US alleges she lied to banks to trick them into processing transactions for Huawei that potentially violated Iran trade sanctions.
“The decision follows a thorough and diligent review of the evidence in this case,” according to the statement. “The Department is satisfied that the requirements set out by the Extradition Act for the issuance of an Authority to Proceed have been met and there is sufficient evidence to be put before an extradition judge for decision.”
The decision, while expected, fuels a diplomatic crisis with China, which has demanded Canada release Meng, who was detained in December while on a stopover in Vancouver. It also clouds the prospects for two Canadians detained there on national security grounds and a third fighting a death sentence for drug trafficking.
In a statement from Ottawa, the Chinese Embassy said in a statement that it was “utterly dissatisfied” with the decision. “This is not a merely judicial case, but a political persecution against a Chinese high-tech enterprise,” the embassy said. It demanded Meng’s release.
Canada’s decision to proceed “in the face of the political nature of the US charges” was disappointing, Meng’s defense lawyers, led by David Martin, said in an email, citing US President Donald Trump’s earlier comments saying he might intervene in the case.
Rule of law
They also said the US charges don’t constitute a crime in Canada. Meng maintains her innocence and believes the U.S. prosecution and extradition constitute “an abuse of the processes of law,” they said. “Our client looks forward to having her rights vindicated in the judicial phase of the extradition process.”
China’s Ministry of Foreign Affairs said in a statement on its website that “the abuse of bilateral extradition treaties by the U.S. and Canada that imposes compulsory measures” on Chinese citizens are “serious violations” of their legal rights.
China has called on Canadian Prime Minister Justin Trudeau to intervene. Trudeau has said he can’t do that, though his justice minister will ultimately sign off on any extradition, after the next step, which is a hearing. “Canada is a country governed by the rule of law,” the justice department statement said. Canada’s former ambassador to China, John McCallum, has said he thinks Meng has a strong case. Trudeau demanded, and got, his resignation shortly after.
For Meng, the daughter of Huawei’s billionaire founder Ren Zhengfei, the decision sets in motion a process that could drag on for months and possibly years. If history is any guide, the odds are high that she will be extradited in the end. Meng’s case is next due in court on March 6 when the date of her first extradition hearing will be set, according to the statement.
Extradition tilt
Canadian judges end up approving about 90 percent of extradition requests because the system makes it nearly impossible to mount a defense, says Gary Botting, a Vancouver-based lawyer who’s been involved in hundreds of extradition cases.
That tilt toward extradition has led to baffling outcomes. In 2011, when Ontario Superior Court Justice Robert Maranger approved the extradition of Canadian sociology professor Hassan Diab to face murder charges, he said the French case was weak, problematic, and that Diab was “unlikely” to be convicted if given a fair trial. Nonetheless, he ordered Diab to be handed over, saying Canada’s extradition law left him no choice.
“Most cases are effectively rubber stamped by the judges because they must accept the evidence of the prosecutor,” says Botting. “It’s very, very difficult for the person that’s been accused to raise a defense because their evidence is not allowed unless it goes to the question of whether or not a crime has been committed.”
Face trial
Under the Canada-U.S. extradition treaty, the judge has to determine whether Meng’s crime alleged by the U.S. would also constitute a crime in Canada -- if so, she will be handed over to face trial.
In Meng’s case, U.S. prosecutors have probably deliberately framed Meng’s crime as fraud, says Botting. “That covers the waterfront because fraud is criminal -- that’s a low test that Canada has to meet,” he says.
Meng will have multiple chances to appeal, and her lawyers have vowed to put up a vigorous fight.
As a final step, Canada’s Justice Minister, David Lametti, will need to determine whether to extradite Meng. He must weigh the law and any submissions made by Meng. Canadian law sets out a “series of mandatory and discretionary grounds for refusal to surrender,” the country’s justice department has said.

Huawei Technologies breaks price ceiling with $2,600 folding 5G smartphone

Huawei Technologies unveiled a $2,600 folding smartphone on Sunday which it said was primed for next generation 5G mobile connections, even as the United States campaigns to bar the Chinese company from such networks over security concerns.
Huawei, the world's second-largest smartphone vendor after Samsung, said it had taken the lead on developing phones for 5G - which promise super fast internet speeds for consumers and businesses - because it was also involved in developing the networks.

"This phone is not only for today for 5G but also for future 5G. On all the benchmarks you can see the performance, the speed is the fastest for 5G in the world," said Richard Yu, head of Huawei's consumer business group.
Speaking ahead of the mobile industry's biggest global event, which kicks of on Monday in Barcelona, Yu said the Huawei Mate X will have two back-to-back screens which unfold to become an eight-inch tablet display.
ALSO READ: Huawei to showcase a 5G-ready foldable device at MWC 2019: Watch livestream
Yu said the Mate X would be able to download a 1 gigabyte movie in three seconds but also be priced at 2,299 euros ($2,607) when it goes on sale later this year, setting a new upper limit for consumer smartphones.
Samsung Electronics Co Ltd last week unveiled its own folding smartphone, priced at nearly $2,000, in a bid to top the technology of Apple Inc and Chinese rivals and reignite consumer interest amid slumping sales.
Huawei, which is also the world's biggest producer of telecoms equipment, is under intense scrutiny in the West over U.S.-led allegations of enabling Chinese state espionage, accusations which the company denies.
Huawei's chairman said on Sunday recent comments by U.S. President Donald Trump that the U.S. needed to get ahead in mobile communications through competition rather than seeking to block technology was "clear and correct".

Huawei hits back, accuses western govts of 'slander, discrimination'

China's envoy to the EU on Monday said Huawei was the victim of slander as western governments try to hamper the Chinese telecommunications giant's effort to deploy its technology worldwide.
"It is not helpful to make slander, discrimination, pressure, coercion or speculation against anyone else," Ambassador Zhang Ming said in an interview with the Financial Times.
"Now someone is sparing no effort to fabricate a security story about Huawei," he said.
Beijing's criticism follows similar words by Foreign Minister Wang Yi who said the campaign against Huawei was "unfair and immoral".
The United States, France and other western nations have voiced fears that using Huawei base stations and other gear could give Beijing access to critical network infrastructure worldwide, possibly allowing it to spy on foreign governments.
ALSO READ: Trudeau sacks envoy to China after comments on Huawei CFO's extradition
In an interview with Bloomberg, European Commission Vice-President Andrus Ansip said the EU was especially worried given China's National Intelligence Law, passed in 2017.
This law compels companies and individual citizens to actively assist China's spy organisations in investigations.
"When it's written in the law, then we have to understand those risks are higher. We cannot be naive anymore," Ansip told Bloomberg.
The worries circle around 5G technology, in which Huawei has invested billions of dollars, competing mainly against Sweden's Ericsson and Finland's Nokia.
ALSO READ: Besides security, another reason US fears Huawei: Its gear actually work
The United States, Britain and other countries have warned of potential Huawei security risks, not least since its founder Ren Zhengfei is a former People's Liberation Army engineer.
Huawei officials bristled at the claims, and chairman Liang Hua warned this week that it would pull out of partnerships in countries where it is not welcome.
"We do not pose a threat to a future digital society," Liang said at the World Economic Forum in Davos, Switzerland last week.
Adding to the tensions, Canadian police arrested in December Huawei's chief financial officer Meng Wanzhou -- a daughter of the company's founder -- on a US warrant over suspected Iran sanctions violations.
China on Wednesday accused Washington of "bullying behaviour" after US authorities confirmed plans to seek Meng's extradition.

Huawei's founder denies US spying claims, says he won't harm the world

Ren Zhengfei, the billionaire founder of Huawei Technologies Co., broke a years-long silence to dismiss US accusations the telecoms giant helps Beijing spy on Western governments.
Ren denied suggestions that Huawei aids the Chinese government in espionage, saying it has no regular contact with Beijing as his technology empire faces its biggest crisis in its three decades of existence. He also called Donald Trump “a great president” and said he’ll take a wait-and-see approach as to whether the US leader will intervene on behalf of Huawei finance chief Meng Wanzhou. Meng--Ren’s eldest daughter--is in Canada facing extradition to the US on allegations of helping defraud banks to avoid sanctions on Iran.
ALSO READ: China sentences Canadian to death on smuggling charges amid Huawei CFO row
The emergence of the reclusive Ren, who last spoke with foreign media in 2015, underscores the depth of the attacks on Huawei, the largest symbol of China’s growing technological might. Meng’s arrest helped crystallize fears about its growing clout in areas from cutting-edge wireless infrastructure and semiconductors to consumer gadgets. Washington has since convinced a growing list of allies to blacklist Huawei networking equipment.
“I love my country, I support the Communist Party. But I will not do anything to harm the world,” the 74-year-old said in a roundtable briefing, only his third formal chat with foreign reporters. “I don’t see a close connection between my personal political beliefs and the businesses of Huawei.”
Ren said he would decline any request from Beijing for sensitive information on its clients and stressed the potential for cooperation with the U.S. and Trump’s administration. And he played down Huawei’s role in current tensions between Washington and Beijing, which have rattled investors and corporations worldwide.

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“Huawei is only a sesame seed in the trade conflict between China and the U.S.,” Ren said from the company’s campus in Shenzhen. “Trump is a great president. He dares to massively cut taxes, which will benefit business. But you have to treat well the companies and countries so that they are willing to invest in the US and the government will be able to collect enough tax.”
Ren, a legendary figure in Chinese business circles, is a uniquely placed voice in a conflict that will help define the global landscape in coming years.
A string of Huawei executives -- all the way up to rotating chairman Ken Hu --- have taken to media in recent weeks to deny allegations of espionage and challenge its accusers to provide proof of shady dealings. But the arrest in Poland last week of a sales executive accused of spying may have helped prompt the reclusive CEO to personally marshal Huawei’s global response. The employee in Poland was fired over the weekend.
Despite the potential impact on his business, Ren said he was confident Huawei’s revenue would grow to $125 billion in 2019 from more than $100 billion last year.
“Huawei is not a public company, we don’t need a beautiful earnings report,” Ren said. “If they don’t want Huawei to be in some markets, we can scale down a bit. As long as we can survive and feed our employees, there’s a future for us.”
Ren built a company that generates more sales than Alibaba Group Holding Ltd. and Tencent Holdings Ltd. combined. In 2018, Huawei overtook Apple Inc. in smartphone sales, a triumph that only served to burnish his tech credentials. His quotes adorn the walls of the food court at Huawei’s sprawling campus on the outskirts of the southern metropolis of Shenzhen, and employees still speak of him in reverent tones.
But it’s perhaps Huawei’s newest and splashiest campus in neighboring Dongguan that better encapsulates its ambitions. Overseen by Ren himself, the Chinese company has built a clutch of faux European towns modeled after the likes of Paris and Verona, complete with a lake, castles and bell towers. The complex is so massive employees have to get around by train -- and it’s still expanding.
Yet Huawei has now become a target of scrutiny around the world. While the company is owned by its employees, the founder’s earlier career with the People’s Liberation Army has constantly bred suspicion that it poses a security threat, an accusation it has always denied. Still, several carriers are shunning its equipment over concerns the products may leave a backdoor for Chinese intelligence agencies.
Within China, the US-led effort to exclude Huawei as the world prepares to adopt revolutionary fifth-generation wireless is tantamount to a national affront. The company remains a linchpin in Beijing’s effort to dominate future technologies by 2025 and a 2018 document from the Department of the Treasury showed that Huawei had about a 10th of the essential patents for 5G wireless networks. That would put it in a prime position to capitalize on the billions that will be spent rolling out the technology.
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“I’m a strong supporter of the world building a unified technology standard,” Ren said. Ren, who survived Mao Zedong’s great famine to found Huawei with four partners in 1987 with 21,000 yuan, said Huawei will continue to engage with governments so they can better understand his business.
He stepped back from daily operations in 2011 by introducing a unique rotation system that allows younger executives to run the company for about six months at a time. But he remained the face of the company on major occasions, such as when he accompanied President Xi Jinping to a Huawei office in the UK in 2015.
The company’s 2017 report shows he has a 1.4 percent stake, giving him a net worth of $2 billion, according to the Bloomberg Billionaires Index.
Over the past year the accusations have intensified, compounded by his daughter’s arrest as well as the blocking or limiting of Huawei gear in the US, Australia, New Zealand and other countries.
“Huawei firmly stands on the side of customers when it comes to cyber security and privacy,” Ren said.