There will be conflict…US has underestimated Huawei, says founder

The founder of Huawei has said the US “underestimates” the Chinese telecom makers’s strength and that conflict with the US is inevitable in the quest to “stand on top of the world”.

Ren Zhengfei said his company was fully prepared to face US bans on key components following new trade restrictions caused by Donald Trump’s declaration of a national economic emergency last week

“The current practice of US politicians underestimates our strength,” Ren told Chinese media on Tuesday. “Huawei’s 5G will absolutely not be affected. In terms of 5G technologies, others won’t be able to catch up with Huawei in two or three years. We have sacrificed ourselves and our families for our ideal, to stand on top of the world. To reach this ideal, sooner or later there will be conflict with the US.”

Huawei, the world’s largest telecommunications equipment maker, has become a focal point in a protracted trade war with the US. The US has been working to thwart the company’s global 5G ambitions, which it sees as a national security threat to other nations.

US officials added the company to a trade blacklist on Thursday, after Trump issued an executive order to ban the technology and services of “foreign adversaries”.

It has resulted in new restrictions that will make it extremely difficult for the company to do business with US companies. Google confirmed on Monday it was restricting Huawei’s access to the Android operating system on which the Chinese company’s mobile devices depend.

Reuters reported on Sunday that Google had suspended all business with Huawei that required the transfer of hardware, software and technical services, except those publicly available.

Ren’s defiant tone was in contrast to his company’s restrained statement on Monday following reports that Google had pulled the company’s access to Android updates for its phones and tablets. It promised to continue providing security updates and other after-sales services for Huawei devices using Android.

On Monday, the US temporarily eased some of the restrictions, a sign of how the prohibitions on Huawei may have far-reaching and unintended consequences for the telecommunications sector at large.

For the next 90 days, the US Department of Commerce will allow Huawei to purchase US-made goods in order to maintain existing networks and provide software updates to existing Huawei handsets.

“It appears the intention is to limit unintended impacts on third parties who use Huawei equipment or systems,” said the Washington lawyer Kevin Wolf, a former commerce department official. “It seems they’re trying to prevent network blackouts.”

Ren dismissed the gesture from the department, saying on Tuesday: “The US 90-day temporary licence does not have much impact on us. We are ready.”

Half of chips used in Huawei equipment come from the US and the other half are made by the Chinese company, according to Ren. “We cannot be isolated from the world,” he said. “We can also make the same chips as the US chips, but it doesn’t mean we won’t buy them.”

The Chinese company’s top executive in the UK, Jeremy Thompson, said the US move against Huawei was a “cynically timed” blow in the escalating trade war. “The timing of this is to inflict maximum hurt on our organisation. We’re a football in between this trade war,” he told the BBC.

The Huawei confrontation has been building for years, as the company has raced to establish an advantage over rivals in next-generation 5G mobile technology.

The US intelligence services believe Huawei is backed by the Chinese military and that its equipment could provide Beijing with a backdoor into the communications networks of rival countries. Chinese law requires companies to cooperate with the government on national security issues. As a result, Washington has pushed its closest allies to reject Huawei technology.

The battle over Huawei has added to tensions in a trade war that has escalated between the world’s top two economies, with both sides exchanging steep increases in tariffs as negotiations have faltered.

Asked how long Huawei might face difficulties, Ren said: “You may need to ask Trump about this question, not me.”