Beijing summons foreign tech firms after Huawei ban

Huawei has denied that its equipment poses a security threat.
Huawei has denied that its equipment poses a security threat.PHOTO: REUTERS

BEIJING • China summoned global technology companies for talks last week following last month's US ban on selling technology to China's Huawei Technologies, two sources familiar with the matter said yesterday.

The blacklisting of Huawei - the world's largest maker of telecommunications network equipment - bars American companies from supplying it with many goods and services because of what Washington said were national security issues. This resulted in a potentially crippling blow that sharply escalated US-China trade tensions. Huawei denies that its equipment poses a security threat.

Soon afterwards, Beijing announced that it would release its own list of unreliable foreign entities. It has also hinted that it would limit its supply of rare earths to the United States.

A source at US software giant Microsoft said the company's session with Chinese officials was not a direct warning, but it was made clear to the firm that complying with US bans would likely lead to further complications for all sector participants.

The company was asked not to make hasty or ill-considered moves before the situation was fully understood, the source said, adding that the tone was conciliatory.

The New York Times first reported on the meetings led by the National Development and Reform Commission, saying that major foreign technology companies were warned against complying with a US ban on selling American technology to Chinese firms or potentially face what the newspaper described as dire consequences.

It is not unusual for China to summon representatives of foreign and domestic companies, sometimes in groups, to make its views heard.

It is not unusual for China to summon representatives of foreign and domestic companies, sometimes in groups, to make its views heard.

 
 

One source with another US technology company in China who was briefed by colleagues on the firm's meeting said that the tone was "much softer" than expected.

"No mentioning of Huawei. No ultimatums. Just asked to stay in the country, contribute to the win-win negotiation," the source said, declining to be identified by name or company given the sensitivity of the matter.

"I think they realise they still need US tech and products for now; self-sufficiency will take a long time, and only after then they can kick us out," the source said.

The New York Times reported that other companies summoned for meetings last Tuesday and Wednesday included US computer maker Dell Technologies, South Korea's Samsung Electronics and SK Hynix, and British chip designer ARM, which last month halted supplies to Huawei.

REUTERS

A version of this article appeared in the print edition of The Straits Times on June 10, 2019, with the headline 'Beijing summons foreign tech firms after Huawei ban'. Print Edition | Subscribe