Business and financial analysis research

Huawei 5G Crisis


The rise of China, the subsequent shift of the world economic center to the east, the relative decline of US competitiveness, and the Chinese Belt and Road attempt to expand the global map. Trump took office and decided to use the US economic power to contain China's rise, pursue the American first, and begin to fight back.

Trade War has been going on for more than a year, it has not yet reached a satisfactory agreement between two sides.  Trump turned the trade war into a technological war, and Huawei became a bargaining chip among them.  Huawei, the world's largest manufacturer of telecommunications equipment and has the ambition to become the world's number one mobile phone brand.  Last year, Huawei's turnover reached $105 billion, even surpassing IBM.  However, Huawei has repeatedly plagiarism included both theft and misappropriation of intellectual property rights, and substantial unattributed textual copying of another’s work.  From the lawsuit disputes, former employees, cooperation and competition, the company depicts Huawei's corporate culture that is not ethical because of competition.

The United States believes that Huawei seems to be involved in activities that block US homeland security, such as providing financial services to Iran.

Beginning in 2018, US intelligence agencies said that Huawei's network equipment may open a "back door", and being funded by Chinese state security which used for espionage.

Countries and Enterprises that have Banned Huawei

US Government:

The US government also took specific action against Huawei away from national security threats.  National Defense Authorization Act (NDAA) for fiscal year 2019, maintain a provision banning the federal government from purchasing equipment from certain Chinese vendors due to security concerns, including Huawei and ZTE, and surveillance equipment for the purposes of national security from Dahua Technology, Hytera, and Hikvision.  International Emergency Economic Powers Act (IEEPA)  is a United States federal law authorizing the President to regulate international commerce after declaring a national emergency in response to any unusual and extraordinary threat to the United States which has its source in whole or substantial part outside the United States.

Other Countries:

Several countries have rejected Chinese telecoms Huawei over national security fears.

Australian government banned Huawei from providing 5G network technology for national security reasons.  Australia has been worried about foreign forces' involvement, mainly because of China's influence on Australia at different levels.

New Zealand, Japan and Taiwan blocked Huawei from participating in a major 5G network.

Enterprises Response

Google's service is not available and Android support is suspended. Google originally decided to suspend cooperation with Huawei's business.  Huawei's next-generation smartphones will not be able to use apps such as Google Play Store, Gmail and YouTube, and will not be able to update the Android operating system.

Facebook blocking pre-installation all of its apps on Huawei products, including the most popular Facebook, Instagram and WhatsApp.

Optical components suppliers Lumentum, Intel, Qualcomm and other US hardware and software companies have cooperated with US policy to discontinue supply key software and components to Huawei.

The evolution of trade wars in the world's two leading countries is difficult to predict. Should enterprises pay attention to the economic interests of enterprises or the safety of national sovereignty?

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