The US blocks the renewal of export licenses for China’s Huawei
BEIJING (AP) — China’s government accused Washington on Tuesday of pursuing “technology hegemony,” as the United States has begun increasing pressure on 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 key components to the Chinese company, according to two people familiar with the matter. None 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 US Commerce Department̵[ads1]7;s entity list, which includes those subject to licensing requirements, since 2019. It has been allowed to buy some less advanced components. But the new restrictions could cut off Huawei’s access to processor chips and other technology, as major US-based companies such as Intel and Qualcomm are forced out of business with it.
Bloomberg News and the Financial Times first reported on the administration.
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 seriously 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 market economy” and are “obvious technological hegemony,” Mao said.
The White House and Commerce Department declined to comment on specific deliberations regarding Huawei.
“Working closely with our interagency export control partners at the Departments of Energy, Defense and State, we continually review 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 deliberations about specific companies.”
The move to freeze Huawei licenses 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 been responsive to two-year-old requests for information about export control licenses the agency has issued for 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 declarations following previous US actions against its companies, but often does nothing.
The ban on sales of advanced 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-cost Honor smartphone brand to revive sales by separating it from the sanctions against the company’s 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 was not considered a security risk. Complaints followed that suppliers would lose billions of dollars in annual sales.
Huawei has been fighting to remove US 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 they are less vulnerable to American pressure.
Huawei says business is starting to pick up again.
“In 2020, we brought ourselves out of crisis mode,” Eric Xu, one of three Huawei executives who are rotating as 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 forecast to be little changed from 2021 at 636.9 billion yuan ($91.6 billion), Xu said.
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Madhani reported from Washington.
