China hits back after US increases sanctions on Huawei

China’s commerce ministry says it will take ‘all necessary measures’ in response to new US restrictions on Chinese tech giant Huawei’s ability to use American technology.

A statement on the ministry’s website said the regulations also threatened the security of the ‘global industrial and supply chain’.

‘The US uses state power, under the so-called excuse of national security, and abuses export control measures to continuously oppress and contain specific enterprises of other countries,’ the statement said.

China will ‘take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises,’ it said.

Under the new rules, foreign semiconductor makers who use American technology must obtain a US license to ship Huawei-designed semiconductors to the Chinese company.

Chip design and manufacturing equipment used in the world’s semiconductor plants is mostly US-made, so the new rule affects foreign producers that sell to Huawei and its affiliates.

The US Commerce Department said foreign foundries would be granted a 120-day grace period for chips already in production.

US Commerce Secretary Wilbur Ross said on Friday that Washington wants to prevent Huawei from evading sanctions imposed earlier on its use of American technology to design and produce semiconductors abroad.

What is the trade controversy over Huawei?

Huawei Technologies Ltd is China’s first global tech brand and a maker of network equipment and smartphones.

It is at the centre of a US-Chinese conflict over Beijing’s technological ambitions.

American officials say Huawei is a security risk, which the company has repeatedly denied.

It was not clear what form China’s response would take, but the sides are already deep in conflict over US accusations of copyright theft and unfair trading by firms in China’s heavily state-controlled economy.

Canada arrested Huawei’s chief financial officer, Meng Wanzhou, the daughter of Huawei’s founder, in December 2018 in a case that sparked a diplomatic furore among the three countries and complicated high-stakes US-China trade talks.

China detained two Canadians in apparent retaliation for Meng’s arrest.

What does Huawei say?

The company has issued a statement condemning the latest actions by the US government.

It reads: ‘In its relentless pursuit to tighten its stranglehold on our company, the US government has decided to proceed and completely ignore the concerns of many companies and industry associations.’ 

‘This decision was arbitrary and pernicious, and threatens to undermine the entire industry worldwide. This new rule will impact the expansion, maintenance, and continuous operations of networks worth hundreds of billions of dollars that we have rolled out in more than 170 countries.  

‘It will also impact communications services for the more than 3 billion people who use Huawei products and services worldwide.

‘To attack a leading company from another country, the US government has intentionally turned its back on the interests of Huawei’s customers and consumers. This goes against the US government’s claim that it is motivated by network security.’

What is the UK doing about Huawei?

The US has warned allies not to allow the Chinese firm to play a part in their 5G networks, arguing that it is a security risk due to its close links to the Beijing government, something denied by Huawei.

The firm’s activities in the UK have been overseen by arrangements including the Huawei Cyber Security Evaluation Centre (HCSEC) – nicknamed the Cell.

The UK’s National Cyber Security Centre (NCSC) said: ‘Due to the UK’s mitigation strategy, which includes HCSEC as an essential component, our assessment is that the risk of trojan functionality in Huawei equipment remains manageable.

‘Placing “backdoors” in any Huawei equipment supplied into the UK is not the lowest risk, easiest to perform or most effective means for the Chinese state to perform a major cyber attack on UK telecoms networks today.’

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