'Survival is at stake’: Chinese telecom giant Huawei after US tightens noose on exports

One of the leading manufacturers of critical telecom gear in the world and a pioneer in 5G technology, Chinese giant Huawei has warned its survival is at stake following the latest US pledges to cut it off from semiconductor suppliers."Survival will be our first priority," said the company’s chairman, Eric Xu, in a new year’s message addressed to employees, which painted a gloomy future for 2020.

The company has become the poster boy of the intense and cut-throat nature of the US-China rivalry in advanced technologies like 5G and artificial intelligence. America, under President Donald Trump, has tightened the noose around the Shenzhen-headquartered company in an effort to deal with what it alleges to be China's tactics of 'stealing' intellectual property of US tech firms and State-backed corporate espionage.

Washington has been ringing its allies to shun Huawei, fearing the company's closeness to China's ruling Communist Party (CCP) may give Beijing backdoor access to data of foreign countries and institutions, a charge both the company and the CCP denies.

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2020 will be a difficult year

In the letter, Eric Xu said the external environment for Huawei is becoming more complicated than ever, and downward pressure on the global economy has intensified. "In the long term, the US government will continue to suppress the development of leading technology – a challenging environment for Huawei to survive and thrive," Eric Xu wrote. 

"In 2020, we will continue to remain on the US Entity List... It's going to be a difficult year for us. We will have nothing to rely on but the hard work of our people, as well as the ongoing trust and support of our customers and partners. Survival will be our first priority," the chief added.

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US announces new curbs

The US’s latest move, announced by the Commerce Department on Friday, requires foreign manufacturers using American chipmaking gear to get a license before being allowed to sell semiconductors to Huawei. In its first official reaction to the new planned U.S. restrictions, Huawei says it is undertaking a comprehensive examination of this new rule.

"We expect that our business will inevitably be affected," Huawei said in a statement.

Washington has already banned US companies from selling equipment to Huawei, locking out the smartphone giant from access to Google’s Android operating system. Several European and Asian countries have also indicated that they will scrutinize Huawei gear and investments in their telecommunications network more closely. 

The US on Tuesday included the India unit of Huawei along with its other foreign subsidiaries in its Entity List, because they pose a significant risk of involvement in activities contrary to the national security or foreign policy interests of the United States.

(With inputs from agencies) (AP Photo)

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