Is Huawei a victim of trade war between US and China?

Global media has reported that the founder of Chinese telecommunications giant Huawei, Ren Zhengfei, said there is “no way the US can crush us”, in an exclusive interview with the BBC, referring to either the company or China as a major economic force. Ren spoke in his first international interview broadcast since the arrest of his daughter Meng Wanzhou, the company’s chief financial officer in Canada, in December 2018, which he described as politically motivated. The US is pursuing criminal charges against Huawei and Meng, including money laundering, bank fraud, violating US sanctions on Iran and stealing trade secrets.

Huawei denies any wrongdoing, while dismissing the pressure from the US. “The world cannot leave us because we are more advanced in technology at reasonable prices. Even if they persuade more countries not to use us temporarily, we can always scale things down a bit,” he said. However, he acknowledged that the potential loss of customs could have a significant impact.

Recently US Secretary of State Mike Pompeo warned the country’s allies against using Huawei technology, saying it would make it more difficult for Washington to “partner alongside them”. Australia, New Zealand and the US have already banned or blocked Huawei from supplying equipment for their future 5G mobile broadband networks, while Canada is reviewing whether the company’s products pose a serious security threat.

Huawei is a good example of an SME. Founded three decades ago — in 1987 — by Ren Zhengfei, the company grew from a small company valued at $6,600 (RO 2,547) to become one of the largest companies in the world, making its founder one of the world’s richest at an estimated personal fortune of $1.7 billion. Moreover, the company managed to attract a major workforce from different nationalities, exceeding 180,000 employees worldwide.

Huawei has been under scrutiny by the US due to security concerns for its role in building 5G networks and its links to the Chinese government.

The company’s annual profit for this year is expected to increase to $125 billion. Ren denies allegations that Huawei follows a certain ideology because the company is not involved in politics and its only goal is to develop communications and other devices relevant to this industry.

Some experts believe this issue ignited amidst the ongoing trade war between the US and China, both of whom have imposed mutual custom tariffs on commodities worth billions of dollars. Although the founder’s daughter was released on a $7.4 million bail by a Vancouver court in January, the possibility of her being extradited to the US for fraud charges and links to alleged violations of sanctions against Iran.

This issue has led to the intervention of the Chinese authorities, with intervention from the Chinese deputy foreign minister who called upon the Canadian authorities to immediately release Meng and protect her rights, or risk facing dire consequences.

Meng faces a 30-year prison sentence if convicted of the charges in the US, while some Congressmen have expressed concern Huawei technology could be used by China’s security services in espionage and threat US national security.

So are these charges real or just part of the trade war against China? Time will reveal more facts on this issue.

Huawei has been under scrutiny by the US due to security concerns for its role in building 5G networks. Some experts believe this issue ignited amidst the ongoing trade war between the US and China