The US blocks the renewal of export licenses for China’s Huawei
BEIJING (AP) – China’s government accused Washington on Tuesday of pursuing “technological hegemony” as the United States began increasing pressure on the tech giant Huawei by blocking access to American suppliers.
The Biden administration has stopped approving license renewals for some U.S. companies that have sold essential components to the Chinese firm, according to two people familiar with the matter. Neither was authorized to comment publicly on the sensitive issue, and they spoke on condition of anonymity.
The company, which makes networking equipment and smartphones, has been on the US Commerce Department’s list of entities since 2019, which includes those subject to licensing requirements. It has been allowed to buy some less advanced components. But the new restrictions may cut off Huawei’s access to processor chips and other technology, as large US-based companies such as Intel and Qualcomm is forced to settle the business with it.
Bloomberg News and the Financial Times first reported the management move.
Huawei Technologies Ltd., China’s first global technology brand, is at the center of a conflict between Washington and Beijing over technology and security. US officials say Huawei is a security risk and could facilitate Chinese espionage, a charge the company denies.
“China is deeply concerned about the reports,” said Foreign Ministry spokeswoman Mao Ning. She accused Washington of “extending the concept of national security and abusing state power” to suppress Chinese competitors.
“Such practices are contrary to the principles of the market economy” and are “obviously technological hegemony,” Mao said.
The White House and Commerce Department declined to comment on specific considerations regarding Huawei.
“Working closely with our cross-agency export control partners in the Departments of Energy, Defense and State, we continually assess our policies and regulations and regularly communicate with external stakeholders,” the Commerce Department said in a statement. “We do not comment on conversations with or considerations about specific companies.”
The move to suspend licenses to Huawei comes after GOP Rep. Mike McCaul, chairman of the House Foreign Affairs Committee, announced earlier this month that the committee would conduct a 90-day review of the Commerce Department’s Bureau of Industry Security. McCaul said he ordered the review because the agency had not responded to two-year-old requests for information about export control licenses the agency has granted to China.
In a letter to Commerce Secretary Gina Raimondo this month, McCaul said the agency had “failed to uphold its legal obligation to produce requested documents and information.” McCaul on Tuesday called reports that Commerce is halting exports “a positive step” and urged the department to declare it a permanent decision.
Mao said Beijing would “defend the legitimate rights” of its companies, but gave no indication of how the government might respond. Beijing has made similar statements after previous US actions against its companies, but often does nothing.
The ban on sales of high-end U.S. processor chips and music, maps and other services from Alphabet Inc.’s Google unit crippled Huawei’s smartphone business. The company sold its low-end Honor smartphone brand to revive sales by separating it from the sanctions against its parent company.
The Commerce Department agreed to grant export licenses to US companies to allow them to sell less advanced chips and other technology to Huawei that were not considered a security risk. Complaints followed, suppliers would lose billions of dollars in annual sales.
Huawei struggled to remove American components from its network and other products and has launched new business lines serving factories, self-driving cars and other industrial customers. The company hopes that they are less vulnerable to American pressure.
Huawei says its business is starting to pick up.
“In 2020, we pulled ourselves out of crisis mode,” Eric Xu, one of three Huawei executives who are rotating to be chairman, said in a letter to employees in December. “US restrictions are now our new normal and we are back to business as usual.”
Last year’s revenue was expected to be little changed from 2021 to 636.9 billion yuan ($91.6 billion), Xu said.
The tightening of export controls on Huawei comes a few days after Japan and the Netherlands agreed to an agreement with the United States to limit China’s access to materials used to make advanced computer chips.
Foreign Minister Antony Blinken will visit China next week. It will be the first visit to China by a Cabinet-level official in the Biden administration.
Madhani reported from Washington.