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Tuesday 20th March 2018

China's Huawei Poses No Threat

Business

7Dnews London

Thu, 22 Aug 2019 13:20 GMT

Chinese tech giant Huawei does not have so-called backdoors in their equipment and only bring benefits to American enterprises and the people, according to two experts in an interview with China Global Television Network (CGTN) on Monday.

The comment came in relation to the announcement by the US Department of Commerce on Monday that it will extend a temporary license loosening restrictions on business deals with Chinese tech giant Huawei for another 90 days.

The extended Temporary General License allows "specific, limited engagement in transactions involving the export, re-export, and transfer of items" to Huawei and its non-US affiliates, according to the department's statement.

Jay Huang, the founder partner of Jadestone Capital, said that the extension might have been as a result of the negative reaction that the US government's business restrictions on Huawei has generated.

"Huawei sends their products and services to the United States, especially in the rural area are quite critical for farmers who are the constituencies for Trump's administration. I think that has some impact on his decision. It also says that then they gave another extension for 90 days. I think it also seems to suggest that it may have an impact or link to the trade war decision," he said.

With regard to the US’s previous accusation about Huawei's backdoor in its exported equipment, experts said it is groundless.

"Number one, Snowden disclosed that US intelligence agencies have broken into Huawei's company's network, trying to find the so-called backdoors. And then they couldn't find anything. Number two is, in Europe Huawei has a lab. It's an open lab and lets everybody check on their equipment. They even went open source, their source code, so everybody can take a look at that whether there is a backdoor. Thirdly, if there was a case you worried about Huawei's equipment has some backdoors, Huawei said in telecommunication equipment, we have core networks which connect to the network, and access which connects to the core network. Huawei says, 'Look, I'm willing to sell only the access network, you maintain your core network if security really is your real concern, you can always buy US confident equipment for your core network. They have a zero chance of any backdoors," said Huang.

Roger Entner, founder of Recon Analytics and Research and longtime telecom analyst, said that the US government's ban on the Chinese tech company will not effectively reverse its trade deficit, but will only get American companies to lose more in terms of cooperation and financial benefits.

"Of course American companies would like to continue doing business with Huawei. 11 billion dollars is almost 10% of the semi-conductor exports in a given year. Losing that business would significantly hurt them. For some companies, it's as high as 50%. So, a significant, very growing and strong part of the US economy would be hurt by such an embargo," he said.

Entner added that although American businesses would like to continue to do business with Huawei, they just cannot afford to do it as there are high costs and risks involved.

"We always would like also to do business with Huawei from a vendor perspective if the security concerns that the American government is raising would be alleviated. American business has to listen to what the government says, especially because you are not allowed to sell to the US government if you have Huawei equipment in your network and that's billions of dollars in business. So that's a major consideration here," he said.

The telecom analyst also stated that "business hates nothing more than uncertainty" and calls for the two sides to find an agreement.

"Business hates nothing more than uncertainty. And there is so much uncertainty in the world now. We need to find a solution between the Chinese and the American positions so that we have a stable foundation on which both countries can prosper and the companies with it," said Roger.

Huang also said that both countries and their companies will lose rather than gain with the sanctions.

"For the Chinese high-tech start-ups which we have invested quite a lot in them, the short-term solution is when and if previously they planned to build a factory inside of China, now they are considering they have to build another one outside China to cope with the tariffs. Secondly, previously if they had a lab in the United States, now they are worried and then this one may (be) subject to the sanctions by this duo-politics. So now they have to think about moving that lab from the United States to another country, maybe back to China. As you can see, this does not really help (full) for both countries," he said.


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