No olive branch for Huawei, ZTE from Biden’s team
- US authorities reportedly continuing with tough line against Chinese vendors
- Older trade licenses updated with tougher restrictions, according to reports
- Meanwhile, India looks set to add to Chinese vendors’ misery
Any prospects of a softer line on US sales to Chinese technology firms under new President Joe Biden look to have vanished with reports of further clampdowns on the business engagements between US companies and the likes of Huawei and ZTE.
According to Reuters, the Biden administration has further tightened the restrictions of what can be sold by US firms to companies named in the US Commerce Department’s Entity List by updating older, multi-year export licenses, issued between 2019 and 2020, with tougher restrictions imposed during the latter stages of President Trump’s tenure.
Documents seen by Reuters suggest license conditions are being widened to cover ever-greater numbers of components that could be shipped to Huawei by US companies, while new restrictions are being imposed on the maximum data memory size of products that could be exported to companies on the Entity List, which includes multiple Chinese companies deemed to be a security risk by the US authorities.
That Huawei’s CFO Meng Wanzhou, the daughter of Huawei’s founder Ren Zhengfei, is still embroiled in a convoluted extradition process to face charges in the US is likely not helping the Chinese vendor’s cause.
Few people, if any, were expecting the Biden administration to soften its stance on exports to Huawei – such a move would cause political uproar at a time when multiple US groups and companies are attempting to promote alternative (preferably domestic) 5G and 6G technologies, and while China is still regarded as a global trade threat – but the Reuters report suggests the screw may be tightening even further.
Meanwhile, that leaves multiple US companies with lower sales and scrambling to find other revenue streams.
Huawei, meanwhile, still managed to source plenty of business in 2020, particularly (as ever) in its domestic market, though 2021 could be the start of much tougher times.
The US isn’t the only market where the Chinese vendors are facing an increasingly tough time. New rules issued this week by India’s Department of Telecommunications (DoT) notes that from 15 June this year, only “trusted products” can be deployed in the networks of licensed operators and must seek permission to upgrade existing networks with tech not “designated as trusted products.”
“National security” is the stated reason for the move, with India’s National Cyber Security Coordinator designated as the authority that will decide which technology is trusted, and which not. According to reports citing government officials, the move will result in the barring of Huawei and ZTE from the country’s 5G networks and severely restrict further involvement in 4G rollouts.
The DoT move comes amid ongoing political tensions between India and China and follows a ban imposed last year on the use in India of Chinese mobile applications.
Huawei has already been feeling the heat in India: Gary Smith, CEO at transport network infrastructure vendor Ciena, noted during a recent earnings announcement that his company has won new business in India as a result of Huawei swap-outs, adding that he expects many more such opportunities in Europe. (See Ciena boasts Huawei swap-out deals, spies better days ahead.)
- Ray Le Maistre, Editorial Director, TelecomTV
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