Translated by
2019/08/21 13:08:47

Sanctions against Huawei

Content

Main article: Huawei

2019

Head of Huawei: the company is on the verge of life and death

On August 20, 2019 the founder and the actual head of Huawei Ren Zhengfei sent to employees the e-mail in which reported that the company is "between life and death" and starts "the fighting mode" to cope with crisis.

Ren Zhengfei wrote the motivating message next day after the U.S. Administration prolonged  the license of Huawei allowing it to buy the equipment from  the American enterprises for 90 days.

Ren Zhengfei advised the underloaded workers to concentrate on new projects of the company, otherwise they will lose the jobs
Ren Zhengfei advised the underloaded workers to concentrate on new projects of the company, otherwise they will lose the jobs

The head of the company advised the employees underloaded at  the main work to rally in "groups of a special purpose" on  development of new projects. That who  will not be able to bring to the company more benefit each several months can reduce salary   and even dismiss.

«
If you cannot perform this work, then make room for a tank. If you want to leave in the field of fight, you can tie a rope around "tank" to pull it. Everyone needs such determination! — Ren Zhengfei said.
»

He called personnel for "worthy practical fulfillments". To the management the task "is set in the fastest way to advance on service of the caused a stir workers and to inhale new life" in Huawei. The company endures the most difficult stage which it should overcome "by all means", the founder noted it.

It expressed confidence that its Huawei will prosper, and the American export restrictions will not cause it a considerable loss. The company can do without cooperation with the American partners, the founder of the Chinese corporation completed.

He also considers that the American sanctions cause damage only to local developers of chips and components to the equipment of Huawei. At the same time Ren Zhengfei said that the company would like to buy further technologies of the companies from the USA as only this way it is possible "to make the contribution to shared prosperity of society".[1]

The partner refused to deliver to Huawei already made electronics for $100 million because of sanctions and paid

On July 25, 2019 it became known that the contract producer of Flex electronics held more than a month in the warehouses already assembled devices of Huawei after the declaration of sanctions of Washington against the Chinese company. Read more here.

Reduction of 70% of the staff in American "subsidiary" because of sanctions

On July 22, 2019 it was announced reduction of 70% of number of staff in the American research company Futurewei Technologies which is included into Huawei. Liquidation of jobs turned out to be consequence of sanctions which U.S. authorities inflicted on the Chinese producer of telecommunication equipment and mobile devices. Read more here.

Trump permitted Huawei to buy the American technologies, but granted incomplete amnesty

At the end of June, 2019 the U.S. President Donald Trump during the press conference according to the results of a meeting with the leader of the People's Republic of China Xi Jinping on a G20 summit said that the American companies will be able to sell to Huawei the technologies further. However, about complete recovery of business of the Chinese smartphone manufacturer and telecommunication equipment the speech does not go.

Donald Trump reported that business contacts of Huawei and the American business will be possible only if they do not threaten national security of the USA.

The solution of the U.S. President Donald Trump to remove sanctions from the Chinese company Huawei does not mean a complete amnesty
The solution of the U.S. President Donald Trump to remove sanctions from the Chinese company Huawei does not mean a complete amnesty

As the economic adviser of the White House Larry Kudlou on air of Fox News TV channel specified, the decision of administration of Trump will extend only to the goods made in many other countries. 

According to Kudlou, the Ministry of Commerce of the USA  is going to grant additional temporary licenses for widespread goods.

«
For example, chipmakers in the USA sell products which  are available also from other countries, and we do not think that there is a threat of national security  — he emphasized.
»

Larry Kudlou added that Huawei will remain in  the list of the organizations representing concern to  whom serious export control extends.

Commenting on the proposal of senator from the State of Florida Marco Rubio to achieve resuming of all sanctions against Huawei, Kudlou told that he appreciates concern of the senate concerning national security and once again reminded that the temporary indulgences entered by Trump are not "general amnesty".

According to Donald Trump, the profit of the American companies on sale of products of Huawei annually was tens of billions of dollars.

Trump and  Xi Jinping agreed to resume trade negotiations between the countries. The USA undertook not to introduce new duties on goods from China. Specific questions will be settled during the meeting of trade and economic delegations of two countries. [2]

The American technical companies found a method to bypass prohibition on deliveries of Huawei

Some American producers of processors continue to cooperate with the Chinese telecommunication company Huawei, despite the ban imposed by administration of U.S. President of Donald Trump. The building of The New York Times with reference to the informed sources reported about it[3].

According to interlocutors of the newspaper, among such companies there are in particular Intel and Micron Technology which for the last three weeks continued deliveries of the products made outside the USA. The companies use that products made abroad are not always considered "manufactured in the USA", explained one of sources. The prohibition bypass will help Huawei to continue by the American companies assembly and sale of the equipment, such as smartphones and servers, NYT notes.

It is authorized to American companies to sell component parts for the devices of Huawei which are already present at the market to the middle of August of this year, however prohibition on deliveries of components for new products of the Chinese company works already now. Interlocutors of the newspaper did not specify what share of deliverable Huawei of products is made by component parts for future developments, but, by some estimates, the volume of transactions of the American producers with the Chinese company is calculated by millions of dollars.

As Kevin Wolf explained the former employee of Ministry of Commerce of the USA, prohibition can be bypassed if products were made outside the USA, and its sale does not pose threat for national security of the country.

Promise to return money if smartphones do not support Gmail and Facebook

On June 19, 2019 it became known that Huawei Technologies promises to return to users all money spent for purchase of mobile devices of the company if those are not able to support popular applications of Google and Facebook.

Such program of full compensation of purchase of smartphones and Huawei tablets is announced on Philippines. The Chinese producer implements this initiative jointly more than with 30 local partners among retailers and distributors.

Huawei says that the company completely will return money for the purchased smartphones if those do not support Gmail and Facebook
Huawei says that the company completely will return money for the purchased smartphones if those do not support Gmail and Facebook

According to the Philippine Revu portal, users will be able within two years after purchase of gadgets of Huawei to calculate acquisition values on a full recovery if such services as Gmail, YouTube, Facebook, Instagram and WhatsApp, do not work on these devices.

Huawei confirmed to the South China Morning Post edition  existence of such program, but refrained from further comments. In particular, it is unknown whether this initiative will be extended to other markets.

According to sources of news agency Bloomberg, Huawei prepares for reduction of deliveries of smartphones outside China for 40-60% in 2019 concerning the 2018th. The founder and the actual head of Huawei Ren Zhengfei confirmed on June 17, 2019 that sales of phones of the company were abroad reduced by 40%. At the same time it did not specify about what comparison of terms it there is a speech.

Interlocutors of Bloomberg say that for recession compensation abroad Huawei will focus on the Chinese market of smartphones and is going to occupy it to 50%.

Huawei considers several options of development of the telephone business abroad. The company intends to begin on June 21, 2019 sales of the new device Honor 20 in the European market. The management is going to monitor the product demand and in case of a failure will interrupt deliveries.[4]

Huawei counted losses from the American sanctions — $30 billion

On June 17, 2019 Huawei for the first time estimated losses from the American sanctions. The founder and the actual head of Huawei Ren Zhengfei at a meeting with journalists in the company headquarters Shenzhen reported that the Chinese mobile device manufacturer and telecommunication equipment will not get $30 billion revenue in two years.

«
We did not expect that U.S. authorities so resolutely attack Huawei. We did not expect that the States will strike so large-scale blow to our supply chain - not only will block deliveries of components, but also access to the international organizations... We cannot achieve deliveries of components, we cannot participate in many international organizations, we cannot closely cooperate with many universities, we cannot use anything with the American component parts and we cannot even set connections with networks which use such components — Ren Zhengfeya quotes  Reuters agency.
»

Revenue of Huawei will remain at the level of 2018 - about $100 billion, both in 2019, and in 2020
Revenue of Huawei will remain at the level of 2018 - about $100 billion, both in 2019, and in 2020

2018 Huawei completed with revenue in the amount of 721.2 billion yuans (about $104.16 billion). The company planned that in 2019 revenue will make $125 billion. However after the conflict with the American authorities of Huawei reviewed the forecast — in 2019 and 2020 of sale of vendor will fall to $100 billion, the head reported.

He recognized that the solution of U.S. authorities to blacklist the company will lead to decrease in production. "nobody will come out in the launched war between the company and the American government the winner", Ren Zhengfei is sure.

On a question of when Huawei is able to recover business in the conditions of sanctions, the founder called 2021.

Saying about as far as the company  was ready to such succession of events, he drew an analogy to airplane.

«
We protected only the engine and the fuel tanks and could not protect other parts — he told.
»

Ren Zhengfei emphasized that Huawei intends to activate release of own chips and also to look for alternative opportunities for preserving of the competitive advantages both in the field of smartphones, and in segment 5G.[5]

The USA for a long time postponed prohibition on Huawei. The technology dependence is too high

Administrative and budget management of the White House (Office of Management and Budget, OMB) determined failure terms from use of technologies of Huawei company in the territory of the USA. Department filed the corresponding petition to the U. S. Congress. Prohibition, we will remind, concerns the American companies cooperating with the government of the country or obtaining from it federal loans and grants[6].

According to Reuters agency, OMB delayed the introduction of sanctions in force for two years – prohibition will begin to work since 2021. Four-year term was initially planned, but on a result it was cut by half.

New sanctions have a direct bearing on the law of the USA on allocations for national defense. In it it is told that federal money cannot be used for purchase of devices of Huawei for reasons of national security – U.S. authorities are convinced that they are used for the purpose of espionage for benefit of the government and intelligence agencies of China. As of June 14, 2019 proofs of it were not submitted.

The two-year delay, according to OMB, is necessary for the American companies for search of new partners with whom they will be able to cooperate and who will take Huawei place. In other words, in a year of the introduction of the mentioned law in force, these companies were not ready to a total failure from partnership with Huawei.

Defective thaw

The solution of administrative and budget management of the White House can mean for Huawei an opportunity within two years to solve all disputes with the American side which launched trade war with China and made the company one of the main levers of pressure. However "thaw" concerns not all spheres of its activity, and exclusively telecommunication equipment which the U.S. President Donald Trump in 2018 also required to refuse Union States.

S&P: sanctions against Huawei will do much harm the USA and will help China

In the middle of June, 2019 the international rating agency Standard & Poor's (S&P) warned that sanctions of the USA against Huawei more likely will do much harm to the American suppliers, than the most telecommunication company.

In the report S&P it is said that prohibition can push Beijing to increase in investments into the Chinese technologies and decrease in dependence on foreign suppliers. In turn, this solution can strengthen the competition in the technology sector and potentially lower long-term perspectives of growth of the American technology companies. S&P notes that revenue share from components of Huawei at such suppliers as Micron, Qorvo and Lumentum, makes about 15%, and at Qualcomm — from 5% to 10%.

Experts consider that China will be able to make technology breakthrough thanks to sanctions against Huawei
Experts consider that China will be able to make technology breakthrough thanks to sanctions against Huawei

As for a role of Huawei in development of a 5G networks, analytics S&P consider that even if initially Huawei was in the lead, other Asian and European suppliers make up for lost time so it is still unknown in what degree of Huawei implements the present advantage. If reports are right, operators of those countries that imposed sanctions on products of Huawei, can face higher equipment expenses or delays at implementation of a 5G. But, considering lack of applications with added value, ready to use 5G, S&P consider that the predicted delays and increase in prices will be insignificant for ratings.

Even in the markets where Huawei takes the worthy place, such as Europe and Africa, the imposed sanctions will have the minimum value, analysts consider. Because of slower implementation of consumer technologies and weaker perspectives of the fixed mobile communication large-scale deployment of a 5G in Europe will lag behind the Pacific Rim and the USA, and i.e. deployment of new network will be performed by reserved rates, monetized scenarios of use will not appear yet. Such approach minimizes the costs and delays connected with sanctions on the equipment of Huawei.[7]

Huawei stopped development of new notebooks because of sanctions of the USA

On June 10, 2019 it became known that Huawei stopped development of new notebooks and also asked the partners to suspend deliveries of devices. Such solution is connected with sanctions which the American authorities inflicted on the Chinese company.

About temporary or, perhaps, final leaving of Huawei from the market of portable computers wrote the DigiTimes edition with reference to sources in a supply chain. The company did not specify time frames of resuming of development and production of the PC as it has no alternative to processors Intel and to the operating system Windows. As Huawei was included in the black list of the Ministry of Trade USA, for deliveries of products the Chinese vendor to the American companies needs to get special permissions. By June 10, 2019 also Microsoft limited to Intel cooperation with Huawei and abstain from informative comments about future deliveries.

Huawei stopped development of new notebooks and also asked the partners to suspend deliveries of devices
Huawei stopped development of new notebooks and also asked the partners to suspend deliveries of devices

Huawei ceased to release both the laptops MateBook, and models of the Honor subbrand (they are on sale under the name of MagicBook). The company stocked up with mobile processors after in 2018 U.S. authorities limited business of other Chinese producer — ZTE. In a case with notebooks it was impossible to buy chips for the future as in the market without that deficit of chips of Intel was observed.

To the American sanctions computer business of Huawei grew promptly. At the end of 2019 the company expected increase in supplies of equipment by 277.3%, but to achieve such result it will not turn out owing to the conflict with the authorities.

Notebooks of Huawei well were on sale, especially in China. For example, after an exit of the MateBook X Pro model in Celestial Empire it was bought up in 10 minutes in official online store Huawei, and the producer earned 10 million yuans (nearly $1.5 million).[8]

Intel and Qualcomm prohibited any communication with the staff of Huawei

On June 10, 2019 it became known that several large technology companies prohibited the employees any communication with workers of Huawei Technologies because of the sanctions inflicted by the American government on the Chinese producer of telecommunication equipment and mobile devices.

According to Reuters news agency with reference to the people familiar with a situation, all informal contacts with the people working in Huawei were limited in Intel and Qualcomm and also in InterDigital Wireless research company  and South Korean mobile operator LG Uplus.

The Reuters agency announced prohibition of contacts of personnel of the leading technology companies with Huawei
The Reuters agency announced prohibition of contacts of personnel of the leading technology companies with Huawei

In the publication it is specified that communication of staff of the technology companies is considered very customary practice during the international meetings and meetings when engineers are engaged in discussion of standards for communication technologies. Partners of Huawei, being afraid of possible discontent from the American government and the corresponding problems though such Washington did not introduce any restrictions for contacts.

The representative of LG Uplus told journalists that the company "voluntarily abstains from  interaction with  employees of Huawei,  except for meetings on  issues of installation of network equipment or  maintenance".

According to industry experts, new restrictions can slow down construction of a 5G networks. At a conference on standards 5G which at the beginning of June, 2019 took place in the city of Newport Beach (California, the USA) participants a conversation with Reuters noted that old cooperation between engineers can suffer because of "technology war" between the USA and China.

The representative of the unnamed European company which introduced rules against interaction with Huawei called the people involved in development of a 5G, "shaken".

«
It can push all to the corners. We need to work together to pass to a 5G.  This market should be global — emphasized the interlocutor of the agency.[9]
»

Facebook prohibited Huawei to install the applications in smartphones from the plant

On June 7, 2019 it became known that applications Facebook will cease to be installed previously on smartphones Huawei because of sanctions which the American authorities inflicted on the Chinese company.

According to Reuters news agency with reference to representatives of Facebook, Facebook application of Messenger, WhatsApp and Instagram will not be established on devices of Huawei from the plant. Owners of already released gadgets will be able to use further programs and to receive updates for them.

Applications of Facebook company will not be pre-installed on the Huawei smartphones any more
Applications of Facebook company will not be pre-installed on the Huawei smartphones any more

In the publication it is noted that smartphone manufacturers often sign with the large companies agreements on preset of applications in tubes. In addition to Facebook, Huawei has such arrangements with social network Twitter and service of lease of housing Booking.com. Whether are going these services to boycott Huawei on an equal basis with Facebook, it is not reported.

Facebook filled up the list of partners of Huawei who refused to cooperate with the Chinese company Huawei after its getting into the black list (Entity List) of the U.S. Department of Commerce. The companies from this list cannot buy from the American partners of technology without special permission.

 On June 6, 2019 the Nikkei edition with reference to informed sources reported that Huawei on a third cut off purchase orders of the sanctions completing after imposing. Besides, according to interlocutors, the company for 20-30% lowered the predicted supply rates of the devices in the second half of 2019.

Huawei claims that shipments of the equipment remain normal — are not reduced and do not increase.

According to forecasts of analysts of Strategy Analytics, because of the American sanctions of sale of the Huawei smartphones in 2019 will fall almost to a quarter and will make 156.4 million pieces, and in the 2020th decrease by 23%, up to 120.4 million units is expected.[10]

IEEE prohibited Huawei to participate in reviewing of scientific articles

Specialists in the field of computer sciences are concerned by how the Institute of engineers of electrical equipment and electronics (IEEE) executes the sanctions imposed by the U.S. Government against Huawei IEEE[11]. On May 22, 2019 IEEE published the list of what is possible for "the listed persons" (i.e. to the staff of Huawei and its branches) and what cannot be done under the auspices of IEEE. This list forced specialists to doubt independence of IEEE of the American government worldwide.

"The American politicians use power of the whole nation to attack private company"

Huawei submitted in May, 2019 the petition for the simplified legal proceedings on case within which it disputes constitutionality of Section 889 of "The law on powers in the field of national defense" (National Defense Authorization Act) of 2019. She also urged the American government to suspend the campaign authorized by the state against Huawei as these actions do not promote achievement of information security in any way.

«
"If to veto activity of Huawei, appealing to information security as an argument, it will not make network more protected. On the contrary, it will create false feeling of security and will distract attention from real problems. The American politicians use power of the whole nation to attack private company. It is abnormal. History almost does not know such examples. The American government did not provide any proofs that Huawei threatens security. They have no incontestable proofs, only conjectures", – Song Liuping, the director of Huawei of legal issues says.
»

The Huawei company specifies in the statement for the fact that Section 889 of "The law on powers in the field of national defense" especially selects Huawei and prohibits the American state bodies not only to buy the equipment and company services but also and to sign contracts or to allow grants and loans to the third parties who buy the equipment or company services – even if they are not connected with the American government in any way.

«
Sung Lyupin also mentioned entering of the company into the List of the prohibited physical persons and legal entities of Ministry of Commerce of the USA two weeks ago. "It creates a dangerous precedent. Today it is communication services and Huawei. Tomorrow it can be your industry, your company, your buyers, – the director of Huawei of legal issues says. – Huawei is sure of independence and inviolability of the American judicial system. We hope that the court, the last line of defense for justice, will correct errors in the law", - he adds.
»


Main article IEEE

FedEx redirects documents of Huawei which it was necessary to deliver to China to the USA

On May 27, 2019 it became known that FedEx redirects documents of Huawei which it was necessary to deliver to China to the USA. Read more here.

Exception of Wi-fi Alliance Association

The Huawei company was limited significantly in the rights in the Wi-fi Alliance organization which is engaged in development new and promotion of the existing standards of Wi-fi technology. The Huawei company was limited significantly in the rights in the Wi-fi Alliance organization which is engaged in development new and promotion of the existing standards of Wi-fi technology[12].

The official statement of the organization concerning discharge of Huawei sounds so: "Wi-Fi Alliance works according to the order of Ministry of Commerce of the USA. Membership of Huawei Technologies is not cancelled – the alliance temporarily limited its participation in the actions of the organization covered by the order". In spite of the fact that the place in alliance is said in the statement about preserving for Huawei, on its official site this company at the time of the publication of material did not appear in the participant list and was present only at the list of sponsors.

Along with the temporary termination of the activity as a part of developers of standards Wi-Fi the Huawei company left, according to Nikkei Asian Review, one more organization – Community of the engineers specializing in area of electronic devices (Joint Electron Device Engineering Council, JEDEC).

Smartphones with the memory cards SD prohibited to release Huawei

On May 23, 2019 it became known of an exception of Huawei of the SD Association organization therefore the company lost the right to release computers and mobile devices with connectors for the memory cards SD or microSD. Read more here.

"The American government underestimates our forces"

Основатель <!--LINK 0:99--> Ren Zhengfei at a round table answered in May, 2019 questions of the Chinese media. During the press conference Ren Zhengfei commented on the latest events around Huawei concerning including restrictions from <!--LINK 132:100-->, options of replacement of chips, developments in <!--LINK 0:101-->. Also he expressed the opinion about public image of the company and told about the relations with family.
Основатель Huawei Ren Zhengfei at a round table answered in May, 2019 questions of the Chinese media. During the press conference Ren Zhengfei commented on the latest events around Huawei concerning including restrictions from the USA, options of replacement of chips, developments in area 5G. Also he expressed the opinion about public image of the company and told about the relations with family.

About influence of restrictions from the USA: The American government underestimates our forces.

Ren Zhengfei said: "the 90-day license does not bear any sense for Huawei. We are already ready. The most important for us – properly to do the part. We cannot control what does the American government". He noted that entering of Huawei into the List of the organizations of Ministry of Commerce of the USA strongly will not be reflected in a company performance. "We will undoubtedly continue to serve our clients, we have huge opportunities for serial production. We still successfully participate in competitive bidding around the world. Growth rates can will slow down, but is not as strong as assume. In the first quarter our operating income in comparison with the same period of last year grew by 39%, in April there was a decrease to 25%, decrease will be possible by the end of the year again, but case will not reach negative growth. And the industry will not suffer from it".

About plans of substitution of processors

Ren Zhengfei emphasized that Huawei will always need chips of the American production. He noted that the American companies submit applications for the license of Bureau of the industry and security of the USA now. If to provide the license, then Huawei will continue to buy their semiconductors or to sell them the (it is necessary not only to buy, but also to sell to stimulate their progress). According to Ren Zhengfeya Huawei is not going to force out the USA and it is short-sighted to think only of own development. It is necessary to provide the general development. If deliveries as a result are blocked, then nothing terrible will occur as Huawei can make all hi-tech semiconductors independently.

Ren Zhengfei explained that in "peace" time of Huawei always adhered to policy 1+1: bought a half of chips in the USA, made other half independently. According to him in spite of the fact that own chips are cheaper in production, Huawei all the same purchased more expensive American semiconductors as Huawei should not be discharged of the outside world. On the contrary, Huawei supports integration.

"Our friendship with the American companies formed for several decades, and it cannot be broken off as the sheet of paper. If the American companies manage to catch licenses, we will continue to buy their component parts in large volumes. Now a situation unclear, but we can wait. If to them grant licenses, then we will continue normal trade relations with the American companies and we will build jointly information society. In this case we do not want to be isolated from others".

About a 5G: the 5G is not an atomic bomb, but the technology designed to serve for the benefit of society.

According to Ren Zhengfeya, the USA should not snatch on Huawei only because we gained the lead because the 5G is not an atomic bomb, but the technology designed to serve for the benefit of society.

He explained that the capacity of networks of new generation is 20 times higher, than at 4G and 10000 times above, than at 2G, besides, that energy consumption in comparison with 4G is 10 times lower, and the sizes of the equipment are 70% less. The base station of a 5G differs in special compactness and only 20 kg weigh, and its dimensions do not exceed the portfolio size for documents. Therefore any more metal towers are not necessary: the equipment can be placed anywhere: on columns and walls. In the equipment of Huawei materials to which corrosion is not terrible for several decades therefore it can be placed even in sewerages are applied.

Besides, the 5G has very wide channel and allows to transfer different content in very high resolution, such as video in 8K. There is an opinion that cost value will be 10 times lower. Actually, it is possible to achieve decrease by 100 times that the television in high resolution became public service. It will contribute to fast cultural development. In the development the countries should rely on culture, philosophy, education. All this forms a basis of development of the country. Therefore the 5G will change society. Thanks to extremely low delays of network of new generation will also receive wide industrial application.

About developments and specialists: Compete with the western companies for talents.

Ren Zhengfei noted that at Huawei 26 research and development centers in which on a permanent basis more than 700 scientists in the field of mathematics work, more than 800 – in the field of physics and more than 120 – in the field of chemistry are opened worldwide. Huawei also has a center of strategic researches giving support to the leading world universities and scientists in their scientific activity.

Ren Zhengfei emphasized that he in cooperation with the Huawei universities is based on the principles of the law of Bae-Dole. It means that the benefit is received by universities. All intellectual rights to theses and results of researches remain behind the universities and their scientists, but do not pass to Huawei. Before using these intellectual works, Huawei makes the commercial transaction with the owner. The principle of the law of Bae-Dole also consists in it.

Commenting on the competition to Hi-Tech by the companies for talented specialists, Ren Zhengfei noted that pupils of the Novosibirsk university at the International Olympic Games on information science for six years win gold and silver medals, however Google entices them to itself, offering salaries five-six times higher. Since this year, Huawei will enter fight for talents and will offer terms even better that young specialists remained in Russia. "Supporting scientists we do not wait for instant progress. Defeat – too success. The main thing that the command developed. Only this way we will be able constantly to move forward".

About public opinion: You should not kindle nationalist sentiments

On the Chinese Internet about patriotism level often judge by what phone of people uses: Apple or Huawei. However the founder of Huawei noted that all members of his family use the Apple phones.

Ren Zhengfei noted that now society was separated: some say that these patriots should support Huawei, others – that Huawei exploits patriotism of the Chinese citizens. "It is impossible to consider that if someone buys Huawei, then it is a patriot, and the one who does not buy – not the patriot. Huawei is a product. It is pleasant – buy, it is not pleasant – do not buy. It is not necessary to tie him to policy. It is impossible to kindle nationalist sentiments at all".

"My children, for example, like Apple. Apple has a good ecosystem. I gave them MacBooks before trips abroad. It is impossible to limit the consciousness to the fact that to love Huawei surely means to love the Huawei phones", - Ren Zhengfei told.

About an appearance of the enterprise: Improve image of the company, providing high-quality services

Ren Zhengfei said that the image needs to be built not advertizing, but rendering high-quality services to clients. For example, the Korean company LG on the equipment of Huawei unrolled LTE in the range of 300 MHz. During the visit of the Pope Francis of 300 thousand people in the territory of about 1.6 sq.km at the same time transferred through this network of a photo and video. And the network did not fall.

The second example is an ensuring communication during the hajj. Before a prayer of 40-50 Muslims switch off mobile phones, and after its end practically at the same time include back. And the Huawei network quietly maintains such loading. Such world examples it is necessary to build the image, and not just to try to improve it through media and advertizing.

Investments of Huawei into other countries answer requests of the company. "For example, in England we invested in the plant on production of optical chips. We made it generally because England should become the export center of these products. We have such plants in Germany and Japan. We constructed them proceeding from demand, but not to show some status. We do not need the status, we need demand for our products".


About family: They arrested my daughter to break my will

Commenting on arrest of the daughter Meng Wanzhou in Canada, Ren Zhengfei noted: "It they wanted to break my will, but the daughter told me that it is already morally ready to be delayed there for a long time. It has an optimistic spirit. From it it became much easier for me. I should look at problems of this world from a position above own consciousness, the family and Huawei. Only this way I can be objective".

"All of us offered ourselves and family for the sake of a uniform ideal. Now we have a conflict with the USA, but as a result we should make a joint contribution to development of humanity".

ARM will leave Huawei without processors for smartphones

The ARM company, the developer of the architecture of the same name used in the majority of modern processors for mobile devices is going to break off partnership with Huawei company. According to the Air Force, the management of ARM charged to employees to stop completely all available contracts with the Chinese vendor[13].

The order concerns, including, and uncompleted agreements both with Huawei, and with all its subsidiary companies. In this situation of Huawei can lose the right to use processors of own development of the Kirin series including the flagman Kirin 980 chip which left in the fall of 2018 in the smartphones and tablet computers. It is connected with the fact that all processors of Huawei are based on architecture of ARM – in the same Kirin 980 ARM Cortex-A76 and Cortex-A55 together with the ARM Mali-G76 video subsystem are used.

Microsoft terminates all communications with Huawei

On May 21, 2019 it became known of the termination of cooperation of Microsoft with Huawei. More and more companies refuse to do business with the Chinese mobile device manufacturer and telecommunication equipment because of sanctions of the USA.

Journalists of The Verge noticed that from Microsoft online store the Huawei MateBook X Pro notebook was gone, and search of other products of Huawei in the directory shows its absence in Microsoft Store. Microsoft retail stores sell what remained in warehouses.

On May 20, 2019 the Microosft company sent the representations letters on the termination of cooperation with Huawei
On May 20, 2019 the Microosft company sent the representations letters on the termination of cooperation with Huawei

The MateBook X Pro model was recognized by many IT editions one of the best thin and easy bonus notebooks in the market. However without the preset Windows the computer will become significantly less attractive, than the competing devices from HP or Dell, observers of The Verge consider.[14]

By May 22, 2019 Microsoft did not make official statements concerning expected break in relations with Huawei. According to Kommersant, Microsoft stops cooperation with Huawei in segments of consumer electronics and solutions for business.

One of sources in a telecom told the edition that on May 20, 2019 Microsoft sent to the representations (including the Russian) letters with the notification on a gap with Huawei. Other interlocutor of the newspaper noted that letters and informal warnings of preparation of termination of work with Huawei were received by several  Microsoft partners  in Russia.[15]

In letters Microsoft reported to the divisions that all negotiations of representations with Huawei will have to take place with the participation of the headquarters of the American corporation.

Huawei uses in the notebooks the Windows operating system from Microsoft, and for b2b-solutions — software of the American company in servers and solutions for data storage, and that number in Huawei Cloud service.

Partners refuse Huawei after getting of the company into the black list in the USA worldwide

On May 19, 2019 it became known that partners refuse cooperation with Huawei after the USA inflicted sanctions on the Chinese company.

The American semiconductor producers Qualcomm and Qorvo stopped deliveries of chips for Huawei. Suppliers from Japan and other countries also break off contracts.

Google suspended provision of services and technical support of the Chinese Huawei
Google suspended provision of services and technical support of the Chinese Huawei

The world's largest contract chipmaker of TSMC said that the company saves deliveries of products for Huawei, but estimates influence of getting of the Chinese company into the black list at the USA. The supplier of displays for devices of Huawei — Innolux — reported that he will not do without negative impact, but it is difficult to foretell whether it will be possible to save the former amount and terms of shipments of screens.

According to Reuters and Financial Times, the company Google suspended provision of services and technical support of the Chinese Huawei. As a result the Chinese company will lose access to to the operating system Android with the built-in Google services, and devices will cease to receive program updates from Google.

«
We come to compliance with the decree and we study effects. The Google Play and protection of Play Protect will continue to function for our users on the existing devices of Huawei — the representative of Google spread information about the termination of business contacts of Google with Huawei because of the decision of the American authorities to blacklist the last commented on Reuters.
»

The license of Google does not extend to AOSP — the open version of Android therefore the following Huawei smartphones outside China will be able to leave on this version of OS.

Huawei stated that the sanctions imposed against it in the USA  will not help Washington to become stronger as restrictions will strike the American consumers, but not it.[16]

Trump signed the decree prohibiting to the companies to use the equipment of Huawei in the USA

On May 15, 2019 the U.S. President Donald Trump signed the decree which imposes in the country state of emergency for protection of national information and communication infrastructure against foreign threats and prohibits the local companies to use the equipment of Huawei.

At the time of a release of the decree the large American companies do not use the structure of Huawei any more, but the innovation can concern small firms.

The U.S. President Donald Trump signed on Wednesday the decree prohibiting to the American companies to use the telecommunication equipment made by firms which are qualified by the authorities as posing a threat of national security
The U.S. President Donald Trump signed on Wednesday the decree prohibiting to the American companies to use the telecommunication equipment made by firms which are qualified by the authorities as posing a threat of national security

The order signed by Trump referred to the International law on emergency economic powers which grants to the president the right to regulate trade in response to the emergency state menacing to the United States.

In the document it is told about an opportunity to block transactions between the American companies and their foreign partners, the The Washington Post newspaper reported. In particular, it is about those foreign companies which in Washington consider under control of "opponents of the USA".

The U.S. Department of Commerce will enter Huawei and the related legal entities to the black list. The press service of the ministry noted that the similar decision was made on the basis of information testimonial of the fact that the company "is involved in the activity contradicting national security and the foreign policy interests of the USA".

For cooperation with Huawei the American producers will need the special license of U.S. authorities.

«
This step will prevent the companies belonging to foreigners to use the American technologies for undermining national security of the USA, said in the statement of the minister of trade Wilbur Rossi.
»

Huawei  called "unreasonable restrictions" from Washington "inconsiderate infringement" of its rights, but expressed readiness to keep in touch with the American government for providing security accreditations of products.

The claim on the U.S. Government for anticonstitutional trade restrictions

The Huawei company announced on March 7, 2019 TAdviser submission of the claim in federal court of the USA to dispute constitutionality of Section 889 of "The law on powers in the field of national defense" (National Defense Authorization Act, NDAA) of 2019. Thereby Huawei insists on pronouncement of the declarative resolution that it the restrictions of an antikonstitutsionna directed against it, and wants to achieve their perpetual injunction.

«
The U. S. Congress could never provide any proofs confirming legitimacy of restrictions for products of Huawei. We are forced to take legal action as a last resort — Guo Ping, the acting chairman of the board of Huawei said. — This restriction is not just illegal — it does not allow us to compete on equal terms that, eventually, harms the American clients. We look forward to court's decision and we believe that it will be accepted for benefit of Huawei and residents of the USA.
»

The acting chairman of the board of Huawei Guo Ping at a press conference of Huawei, on March 7, 2019
The acting chairman of the board of Huawei Guo Ping at a press conference of Huawei, on March 7, 2019

A claim was submitted to District court of the USA in Plano, the State of Texas. According to the document, Section 889 of "The law on powers in the field of national defense" of 2019 prohibits all American state departments not only to buy the equipment and Huawei services but also both to sign contracts and to grant grants and loans to the third parties purchasing the equipment and Huawei services bypassing executive and judicial processes. According to the statement of Huawei, it breaks the Provision Bill of Attainder Clause (prohibiting to select the particular person or a group of persons for removal of punishment without court) and Regulations on due course of law (Due Process Clause) and also the principles of differentiation of legislative, executive and judicial authority which are the cornerstone of the Constitution of the USA as the Congress creates the law and at the same time tries to pronounce on it a sentence and to perform it.

Representatives of Huawei company at a press conference
Representatives of Huawei company at a press conference
«
Section 889 is based on a set of the false, unproven and unreasonable assumptions. Despite the fact that it is written in this legal act, the government of China does not own, does not control and has no impact on activity of Huawei company. No proofs which would testify against it were provided — Song Liuping, the director of Huawei of legal issues emphasized.
»

Huawei considers that restrictions within NDAA prevent the company to provide advanced technologies of a 5G to the American clients that will slow down their implementation. In turn, it will prevent work on performance improvement of 5G networks in the USA. Besides, net surfers will be forced to select from rural and remote regions of the USA between public financing and high-quality budget products. It, in turn, will interfere with process of upgrade of networks therefore digital inequality will amplify. That it is even worse, the restrictions directed against Huawei suppress the competition therefore the American consumers should purchase products of lower quality at higher prices, emphasized in the company.

By estimates of industry sources if it was authorized to Huawei company to enter competitive struggle, it would reduce cost value of wireless infrastructure by 15-40% and would allow the countries of North America to save at least $20 billion in the next four years.

On Guo Ping's assurance, Huawei is ready to answer questions of U.S. authorities. Canceling of restrictions will give to the American government the chance to work freely with Huawei and to solve real problems in the field of security, the top manager of the company concluded.

The official statement of Huawei company in connection with charges of the U.S. Department of Justice

Huawei is disappointed with news about the charges brought against the company. After arrest of Mrs. Meng the company looked for an opportunity to discuss investigation in east district of New York with the U.S. Department of Justice, however, the request was denied without explanation. The arguments which are put forward in the indictment about a trade secret in the Western district of Washington were already a subject of the civil action and were settled by the parties after jury members in Seattle did not detect either damage, or deliberate and malicious actions in the claim for a trade secret.

The company denies that it, either its subsidiary company, or branch made any of the stated violations of the law of the USA stated in each of indictments. Huawei does not possess information on any violations from Mrs. Meng and considers that courts of the USA finally will come to the same conclusion.

Official charges of the USA of industrial espionage and fraud

On January 28, 2019 the U.S. Government brought to Huawei official charges of industrial espionage and fraud.

According to Bloomberg news agency with reference to the acting as the Attorney-General of the USA Mathew Uiteker, the Chinese producer of telecommunication equipment violated terms of agreement with the American operator T-Mobile who developed the robot for testing of the mobile phones. Huawei created the similar equipment, secretly photographing and measuring its development and having even stolen a part of the American robot, Uiteker reported.

Huawei is accused of theft of information on technologies which the American T-Mobile used for checks of smartphones.
Huawei is accused of theft of information on technologies which the American T-Mobile used for checks of smartphones.

T-Mobile in the claim submitted in 2014 stated that the staff of Huawei took control not only of information on its characteristics, but also separate elements, as a result the company could use the stolen parts of the robot for "development, improvement and troubleshooting of own robot". Huawei claimed that it settled this dispute in 2017.

Besides, according to the American Ministry of Justice, Huawei provided unreliable information to U.S. authorities and banks about the relations with the subsidiary companies for the purpose of business in Iran. Huawei announced that it left number of his owners because of sanctions, but remained the shadow beneficiary and continued to do business, declared in Ministry of Justice.

Mathew Uiteker during the press conference told that charges are brought against the company, its affiliated enterprises Huawei Device USA and Skycom and also against Meng Wanzhou — the chief financial officer of Huawei and the daughter of the founder of Huawei. In turn the head  of FBI Christopher Ray  specified that charges do not concern the leadership of the People's Republic of China.

Expressed to the Ministry of Foreign Affairs of China serious concern in the brought charges and urged the American authorities to stop "groundless oppression" of the Chinese companies, including Huawei and also to cancel the warrant for the arrest Meng Wanzhou.[17]

The Czech Republic will respond China to the declaration of the equipment of Huawei with threat to national security

In January, 2019 the president of the Czech Republic Milos Zeman criticized the statement of the IT regulator for the equipment of Huawei menacing to national security and warned about response measures of China. Read more here.

2018

Japan refused the equipment of Huawei

On December 10, 2018 the main Japanese ministries and armed forces received instructions not to use personal computers, servers and telecommunication equipment Huawei of production Technologies, ZTE and other Chinese companies.

The government commission on development of measures of cyber security formulated new rules of purchase of computer and telecommunication equipment of foreign production for government institutions and also the Japan Self-Defense Forces. Suppliers the companies which can pose a threat of national security of Japan are eliminated. Requirements become effective in 2019 after carrying out "the training period", notes the Nikkei edition.

The Japanese authorities prohibited Huawei to participate in state procurements
The Japanese authorities prohibited Huawei to participate in state procurements

According to the Kyodo agency, the Japanese government prohibited Huawei and ZTE to receive public contracts and to participate in state procurements in  the territory of the country. It explained the solution with concerns concerning possible leak of confidential information.

«
For us it is extremely important not to buy the equipment which bears in itself harmful functions and can be used to theft of information, its destruction and violation of work of information systems — the secretary general of the cabinet of Japan Yoshihide Suga said at a press conference in Tokyo, without having begun to tell at the same time the names of the specific companies about which there is a speech.
»

The Japanese state agencies, as a rule, buy telecommunication equipment within the general competitive bidding on the basis of the price, but after entry into force of the new guidelines also security will be considered.

The Embassy of China in Tokyo expressed "serious concern" concerning messages that the government of Japan prohibits state procurements of the equipment of Huawei and ZTE. Earlier some other countries, including the USA and Australia, refused to use these products for reasons of national security.[18]

The USA warned allies against use of the equipment of Huawei

In November, 2018 the American government addressed allies with prize-winning to refuse use of the equipment of Huawei company which Washington suspects of espionage for benefit of the Chinese authorities.

The corresponding warnings were brought to telecommunication operators in Germany, Italy, Japan and some other countries. According to the The Wall Street Journal (WSJ) newspaper, officials of administration of U.S. President of Donald Trump consider the possibility of providing to "the friendly countries" of financial aid for development of communication networks without use of the Chinese equipment.

The American government addressed allies with prize-winning to refuse use of the equipment of Huawei company
The American government addressed allies with prize-winning to refuse use of the equipment of Huawei company

Most of all USA interests the countries where there are their military bases. Though the Pentagon uses own satellites and means of communication, but in a case with the Internet often work goes through local private providers.

Within the campaign against Huawei and ZTE the American authorities prohibited state agencies to buy the equipment made by these vendors in the country, and on the American military bases  ceased  to sell the Huawei and ZTE smartphones. Began to boycott products of these companies in 2018 also some countries allies of USA, including Britain and Australia.

According to WSJ, the USA is afraid that the People's Republic of China can be engaged implementation of cyber attacks or electronic in espionage using telecommunication equipment of the companies.  Also in Washington consider the fact that Celestial Empire will try to hack networks.

In Huawei and the Chinese government all charges in the address reject and insist that they observe all standards of cyber security by production. The company also claims that its equipment is not inferior on cyber defense to devices from Nokia or Ericsson.

The experts polled by the edition connect actions of Washington with trade war and a technology race which are waged with China.[19]

Australia did not start up Huawei to national a 5G project

In July, 2018 it became known that Australia did not allow Huawei Technologies to the national project of construction of networks of fifth generation (5G). The authorities are afraid of possible communications of the company with the government of Celestial Empire. Read more here.

Intelligence agencies of the USA recommend to Americans not to use the Huawei smartphones

In February, 2018 intelligence agencies of the USA stated that they do not recommend to Americans to use smartphones of Huawei and ZTE companies.

«
It creates risks of pressure upon our telecommunication infrastructure. It also means danger of theft of information and espionage — the director of FBI Chris Wray said, explaining why you should not use gadgets of Huawei and ZTE.
»

According to the CNBC TV channel, FBI, CIA, the NSA and the National intelligence are afraid that ZTE and Huawei closely cooperate with the Chinese government, creating thereby threat of national security of the USA.

Intelligence agencies of the USA consider the Chinese gadgets dangerous
Intelligence agencies of the USA consider the Chinese gadgets dangerous

Affirms that using these smartphones Chinese will be able to change or steal information and also to messages "imperceptible espionage".

Are also concerned by potential Chinese impact to the USA in the senate. So, the head of committee on investigation  Richard Burr believes that China tries to get access to the American technologies and intellectual property through telecommunication companies.

The head of the NSA  Michael Rogers is sure that opposition with the Chinese companies will become complicated in the future. According to him, the USA should "watch fixedly" them.

Huawei said that products of the company "represent not bigger risk concerning cyber security, than other suppliers in the field of information and communication technologies".

«
Huawei is informed on a number of the measures of the American government directed, apparently, to interfering with business of Huawei in the American market, said in the statement of the Chinese company.
»

At the beginning of February two American senators offered bills which will prohibit government structures of the USA to buy the equipment of the Chinese vendors, and the government employee — to use the Huawei and ZTE mobile phones.[20]

2012: Australia boycotts Huawei

The Australian officials decided to prohibit Huawei to supply the equipment for a national broadband network, being afraid of the cyber attacks coming from China. In reply the management of Huawei called prohibition "the sign of regress", having noted that increased requirements are imposed to the company, considering its Chinese origin. To permit any doubts, Huawei suggests to open all source codes of the software and to give an opportunity to carry out an inspection of the equipment.

In March, 2012 the Ministry of Foreign Affairs of China also spoke against prohibition. "We hope that competent Australian authorities instead of preventing normal work of the Chinese companies for security, will take care of that they could compete on equal terms to the others" — the representative of the MFA Hong Lei[21] said[21].

However Julia Gillard, the prime minister of Australia, at a press conference in March said that the government of the country supports prohibition on participation of Huawei in the project. She refused to announce details why this decision was made, having referred to reasons of national security.

"We made the decision proceeding from the interests of the country — she said. — Any assumptions that we violate trade agreements simply are not true".

In April, 2012 it became known that the Ministry of commerce of China expressed deep concern in connection with failure of the government of Australia to allow Huawei company to be equipment supplier for the national project of a broadband wireless network. The Chinese officials called this failure "unfair". The representative of the ministry Shen Danyang emphasized that the Chinese company supplies the broadband equipment and services of support to many countries of the world. And that at the Australian office Huawei of 90% of employees — locals, and the company works in the country ten years and has impeccable reputation.

"China and Australia should support the open, constructive and directed to cooperation dialog that the companies of both countries could perform trade and investments by fair rules", said in the statement of the ministry. His representative also reminded that China and Australia signed the bilateral agreement about protection of investments.

Concerns concerning the security risks proceeding from Huawei expressed in many countries, including in the USA where the ministry of commerce in 2011 prohibited the company to participate in the project on construction of a national wireless network.

Huawei is exposed to criticism and from her largest competitor, Cisco company. It was reported that John Chambers, the CEO of Cisco, on one of actions of Wall Street Journal said what the Chinese company "not always plays by rules" in the field of protection of intellectual property and a computer security. However, the head of Cisco did not give specific examples.

Notes

  1. Huawei expects no relief from US sanctions but is confident
  2. [https://edition.cnn.com/2019/06/29/business/huawei-trump-us-goods/index.html Trump reversed course on Huawei. What happens now? ]
  3. the American technical companies found a method to bypass prohibition on deliveries of Huawei
  4. Huawei promises consumers in the Philippines a full refund if Gmail and Facebook will not work on its devices
  5. Huawei says U.S. ban hurting more than expected, to wipe of $30 billion off revenue
  6. of the USA for a long time postponed prohibition on Huawei. The technology dependence is too high
  7. S&P warns Huawei ban will hit US tech long-term
  8. Huawei halts delivery and development of new notebooks PCs
  9. Exclusive: Some big tech firms cut employees' access to Huawei, muddying 5G rollout
  10. Exclusive: Facebook suspends app pre-installs on Huawei phones
  11. prohibited Huawei to participate in reviewing of scientific articles
  12. of Huawei in a siege: the company separated from Wi-Fi
  13. of ARM will leave Huawei without processors for smartphones
  14. Microsoft removes Huawei laptop from store, remains silent on potential Windows ban
  15. System fight
  16. Exclusive: Google suspends some business with Huawei after Trump blacklist - source
  17. U.S. Authorities Unveil Sweeping Set of Charges Against China’s Huawei
  18. Japan bans Huawei and its Chinese peers from government contracts
  19. Washington Asks Allies to Drop Huawei
  20. Six top US intelligence chiefs caution against buying Huawei phones
  21. 21,0 21,1 [http://www.osp.ru/news/articles/2012/15/13014466/ Australia