Russian media: The grace period has been extended Why can't the United States leave Huawei?

August 23 reported that the Russian media said that the US Department of Commerce extended the ban on Huawei for another 90 days, allowing Huawei to continue to purchase parts from US suppliers. A few days ago, US President Trump still said that the United States will not cooperate with Huawei in any way. However, the US Secretary of Commerce explained that many US telecommunications companies rely on Huawei, so trade regulators give them more time to finally get rid of this dependence.

According to the Russian satellite news agency website reported on August 22, as early as May, the US Department of Commerce has listed Huawei and dozens of other companies related to China's telecom giants as "blacklisted." This means that US companies cannot sell any parts and software to companies in the “blacklist” without the permission of the US authorities.

However, the US Department of Commerce has almost immediately provided a three-month “grace period” to its domestic companies so that they can systematically reduce the scale of cooperation with Chinese partners. Now, this grace period has been extended.

The report said that while the extension of the ban on Huawei, the US Department of Commerce also expanded the "blacklist" of companies banned from cooperating with the United States, adding 46 companies related to Huawei. Therefore, in Huawei's view, this is bad news. Huawei said that these behaviors in the United States are caused by unfair competition and have nothing to do with national security issues. Huawei urged the US to wake up and stop discrimination against the company and its partners to ensure a healthy competitive environment in the US market.

According to the report, Huawei does not believe that extending the "grace period" for another three months is a sign of reconciliation by the US. On the contrary, this step of the US government is based on consideration of the domestic situation. The company that cooperates with Huawei is losing a big customer. Last year, Huawei spent $70 billion ($1 to $7) on parts purchases, and about $11 billion went to Qualcomm, Intel and Micron. Another $2 billion went into Broadcom. In addition, Commerce Minister Ross also admitted that a considerable number of telecom operators in the United States use Huawei equipment. Giving up Huawei overnight is costly, especially for small operators. Finally, many Americans use Huawei smartphones. If they suddenly disappear from the shelf, this is not the best Christmas gift for people.

Huang Weiping, a professor at the School of Economics of Renmin University of China, commented in an interview with the Russian Satellite News Agency: "I think it is hard to say that the US market will be completely shut down for Huawei in three months. First, Trump is now facing a response to Christmas. Although the addition of tariffs does have an impact on China, it will inevitably also counteract the life of the United States during Christmas. And if it completely cuts off the connection with Huawei, what should the relevant employees do? A mobile phone exported to the United States, the Chinese The value is not high, but the Americans are higher. If the mobile phone is excluded from the business, then the impact is on the United States itself. This is probably why American companies must say this to Trump."

"Secondly, the US Department of Commerce hopes that US companies will get rid of their dependence on Huawei as soon as possible and find alternatives in the world. However, it is not difficult to find Huawei's substitutes, but its manufacturing costs will inevitably increase. Huawei's cost performance is very high. During Obama, he proposed 're-industrialization', and now the Trump team is clearly trying to reshape the global supply chain, industry chain, and value chain. But reshaping is not a simple matter. If the supply chain is broken If it is dropped, it will have a greater impact on the United States."

"Third, the United States needs to know where the market for high-tech companies is. Not only the US chips, including Korean storage, Japanese electro-acoustic components, etc., where is the market?" Huang Weiping said.

Russian media said that on the contrary, for Huawei, the problem of losing the US market is not so sharp. According to data from the research institute Del Oro Group, Huawei accounted for 29% of the world telecom equipment market in 2018. This is the biggest share. The closest competitor to it, Nokia, is about 20%. Therefore, Huawei can have no US market in principle. But Huawei relies on high-value-added US products, especially software. For example, simply refusing to work with Google means that the Android operating system will not be able to use all features on Huawei mobile devices. Huawei recently launched its own Hongmeng OS, which will come or replace Android. But in the short term, the company has to go through a difficult period.

The report concludes that it is naive to assume that trade disputes between the two countries can be resolved by increasing the purchase of any product and reducing trade imbalances. Obviously the trade war is just a manifestation of large-scale technical confrontation between the two big powers. It is no accident that Huawei is under pressure. Huawei is indeed a threat to the United States – threatening the United States to lose its global technological leadership. At present, Huawei is already higher than its competitors in terms of the development level of 5G technology. For example, in terms of the number of basic patents for 5G, Huawei ranked first with 2,160; while Nokia has 1,516 patents, and Ericsson is only ranked sixth.

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