BEIJING (AP) — The Chinese government accused Washington on Tuesday of pursuing “technological dominance,” as the United States began to ratchet up pressure on tech giant Huawei by blocking access to US suppliers.
The Biden administration has stopped approving license renewals for some US companies that were selling key components to the Chinese company, according to two people familiar with the matter. Neither of them was allowed to comment publicly on the sensitive matter and spoke on condition of anonymity.
The company, which makes networking equipment and smartphones, has been on the US Commerce Department’s entity list, which includes those subject to licensing requirements, since 2019. It has been allowed to buy some less advanced components. But the new restrictions may prevent Huawei’s access to processor chips and other technologies, as large US-based companies such as Intel and Qualcomm are forced to end dealings with them.
Bloomberg News and the Financial Times first reported on the administration’s move.
Huawei Technologies Co., Ltd., China’s first global technology brand, is at the center of the conflict between Washington and Beijing over technology and security. US officials say Huawei is a security risk and may facilitate Chinese espionage, an accusation the company denies.
“China is deeply concerned about these reports,” said Foreign Ministry spokeswoman Mao Ning. Washington was accused of “broadening the concept of national security and abusing state power” to suppress Chinese competitors.
“Such practices run counter to the principles of a market economy” and “blatant technological dominance,” Mao said.
The White House and the Commerce Department declined to comment on specific Huawei-related deliberations.
“Working closely with our Interagency Export Controls partners at the Departments of Energy, Defense and State, we continually evaluate our policies and regulations and communicate regularly with external stakeholders,” the Commerce Department said in a statement. “We do not comment on conversations or deliberations about specific companies.”
The move to halt licenses to Huawei comes after Republican Representative Mike McCaul, chairman of the House Foreign Affairs Committee, announced earlier this month that the committee would conduct a 90-day review of the Commerce Department’s Office of Industry Security. McCall said he was ordering the review because the agency had not responded to two-year-old requests for information about the agency’s export control licenses to China.
In a letter to Commerce Secretary Gina Raimondo this month, McCall said the agency “failed to fulfill its legal obligation to provide the required documents and information.” McCaul on Tuesday called the reports of halting trade on exports a “positive step” and called on the department to make it a permanent decision.
Mao said Beijing would “defend the legitimate rights” of its companies, but gave no indication of how the government might respond. Beijing has issued similar statements after previous US actions against its companies but often does nothing.
The ban on sales of advanced US processor chips, music, maps and other services from the Google unit of Alphabet Inc. To paralyze Huawei’s smartphone business. The company sold its cheap smartphone brand to revive sales by decoupling it from sanctions imposed on its parent company.
The Commerce Department has agreed to grant export licenses to US companies to allow them to sell less advanced chips and other technology to Huawei that it deemed did not pose a security risk. This came after suppliers complained of losing billions of dollars in annual sales.
Huawei has scrambled to remove US components from its network and other products, and launched new business lines serving factories, self-driving cars and other industrial customers. The company hopes that these will be less vulnerable to American pressure.
Huawei says its business is starting to pick up.
“In 2020, we have successfully pulled ourselves out of crisis mode,” Eric Xu, one of the three Huawei executives who take turns as chairman, said in a letter to employees in December. “American restrictions are now our new normal, and we are back to business as usual.”
Xu said last year’s revenue was expected to change slightly from 2021 at 636.9 billion yuan ($91.6 billion).
Madani reported from Washington.
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