Sanctions accelerate Huawei’s growth and cost US tech giants dearly

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BEIJING – Huawei is increasingly introducing new technology-based products and services amid arbitrary US repression. The Chinese giant is gearing up for future barriers in western markets.

As the company accelerates the construction of its own ecosystem and invests in key technologies, efforts to reduce dependence on US technology will also be a blow to some of North American technology companies, said an article published in the Global Times newspaper.

US justice has attacked Huawei. In one of the most recent cases, a Chinese professor was accused by prosecutors of ‘stealing’ technology from a California-based company to benefit Huawei, according to Reuters.

Although Huawei has not been charged, the company considers the case as an example of the US government’s selection process.

Huawei reported on Tuesday that the US government returned a batch of telecommunications equipment seized two years ago, and the company has dropped its lawsuit against the US government.

Commenting on the return of Huawei’s products, a spokesman for China’s Foreign Ministry said on Tuesday that the US had indeed admitted the illegality and arbitrariness of its action, which was shameful and unethical.

In May, the US Department of Commerce blacklisted Huawei that could prevent Google from providing Android system services.

Microsoft backed Huawei, arguing that the current sanctions against the Chinese technology giant are “anti-American,” according to local media reports. Microsoft’s president said US government actions should not be taken without “grounded in logic and the dictates of the law.”

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Since Huawei’s blacklist, the US Department of Commerce has received more than 130 license applications to sell to Huawei, Reuters reported, citing privileged sources. Analysts said Huawei is prepared if the US decides against easing its restrictions, but suggested that US companies may not be prepared for the worst case scenario.

While Huawei will soon launch an application-free smartphone from Google, the company is accelerating the development of its own Map Kit, equivalent to Google Maps. The service is being launched for foreign developers, allowing them to develop new applications and expand map features. The Map Kit will be released in October.

US companies lose out

The company has been putting its technologies, including chipsets and operating system (OS) into practice, reflecting a strong determination to move forward despite the US blacklist.

Canalys analyst Jia Mo told the Global Times on Tuesday that, given Huawei’s market share in China and abroad, its intensified efforts to build its own ecosystem will pose a major challenge to its current US suppliers, such as Google.

An ITIF analysis of potential emerging technology export limits shows that, depending on the severity of controls, US companies could lose $14 to $56 billion in export sales in five years, threatening between 18,000 and 74,000 jobs.

Blacklisting Huawei will have significant ramifications for US suppliers, which provide about one-seventh of the Chinese company’s components.

Of the $70 billion that Huawei spent on purchasing components in 2018, about $11 billion went to US companies such as Qualcomm, Intel Corp and Micron Technology, according to the Chinese company itself.

Huawei does not plan to surrender to US repression from the start. It will only move faster, Jiang Junmu, a senior industry analyst, told the Global Times.

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