US blocks export license renewals for China’s Huawei
BEIJING (AP) – China’s government on Tuesday accused Washington of pursuing “technology hegemony” as the United States has begun increasing pressure on tech giant Huawei by blocking access to American suppliers.
According to two people familiar with the matter, the Biden administration has stopped approving renewals of licenses for some US companies that have sold essential components to the Chinese company. Neither of them were authorized to comment publicly on the sensitive matter and they spoke on condition of anonymity.
The company, which makes networking equipment and smartphones, has been on the U.S. Department of Commerce’s list of licensed companies since 2019. It was allowed to buy some less advanced components. But the new restrictions could bar Huawei’s access to processor chips and other technology, as major US companies like Intel and Qualcomm are forced to go out of business.
Bloomberg News and the Financial Times were the first to report the change in government.
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, an accusation the company denies.
“China is deeply concerned by 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 contradict the principles of the market economy” and are “blatant technological hegemony,” said Mao.
The White House and the Commerce Department declined to comment on specific Huawei considerations.
“Working closely with our cross-agency export control partners in the Departments of Energy, Defense and State, we continuously evaluate our policies and regulations and communicate regularly with external stakeholders,” the Commerce Department said in a statement. “We do not comment on discussions with or consultations about specific companies.”
The move to halt licensing for 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 will. McCaul said he ordered the review because the agency failed to respond to two-year-old requests for information on export control licenses that the agency issued to China.
In a letter to Trade Secretary Gina Raimondo this month, McCaul said the agency had “failed to meet its legal obligation to produce requested documents and information.” McCaul on Tuesday called reports that the trade was halting exports “a positive step” and urged the department to make it a permanent decision.
Mao said Beijing will defend “the legitimate rights” of its companies, but gave no indication of how the government might respond. Beijing has made similar statements following previous US actions against its companies, but often does nothing.
The ban on selling advanced US processor chips and music, maps and other services by Alphabet Inc.’s Google division crippled Huawei’s smartphone business. The company sold its low-end smartphone brand, Honor, to revive sales by separating it from sanctions against its parent company.
The Commerce Department agreed to issue export licenses to US companies so they can sell less advanced chips and other technologies to Huawei that don’t pose a security risk. This was followed by complaints that suppliers were losing billions of dollars in annual sales.
Huawei has made efforts to remove US components from its network and other products, and has introduced new business areas for factories, self-driving cars and other industrial customers. The company hopes these will be less vulnerable to US pressure.
According to Huawei, business is starting to recover.
“In 2020, we successfully pulled ourselves out of crisis mode,” said Eric Xu, one of three Huawei executives who alternate as chairman, in a December letter to employees. “US restrictions are now our new normal and we’re back to business as usual.”
Last year’s revenue was little changed from 2021’s 636.9 billion yuan ($91.6 billion), Xu said.
The tightening of export controls for Huawei comes just days after Japan and the Netherlands struck a deal with the US 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 by a Biden administration cabinet official to China.
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Madhani reported from Washington.
