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Huawei CFO Arrested US-China TRADE WAR in 2019

Arresting the top executive of Huawei has roiled the business world. This incident has stopped truce between United States and China trade war. The Chief Financial Officer of the company Meng Wanzhou was arrested by Canadian on the request of United States authorities. Huawei is one of the leading company of China and it has successfully established its sources in more than 170 countries. It provides telecommunication services with the production of several smartphones. Also known for its advanced research in the field of 5g network. Meng is accused by the United States for helping to cover the violation of sanction on Iran according to Canadian prosecutor. Meng Wanzhou is the daughter of Huawei's CEO Ren Zhengfei. Huawei successfully became the largest manufacturer of Telecom communication equipments in 2012. The second largest manufacturer of smartphone in world behind Samsung Electronics. The report by US Congress concluded that "Huawei did not fully cooperate with the investigation and was unwilling to explain its relationship with the Chinese government or Chinese Communist Party while credible evidence exists that it fails to comply with US laws." The reason given for the arrest was that it pose threat to national security of United States. This is because Ren Zhengfei was a former engineer in Chinese people's liberation army. Moreover in the past years company has helped North Korea and Iran providing with Telecom equipments that can be used for spying over the population, this is two way use of technology.

Trump claims Huawei is backed by Chinese military

The top 20 Chinese firms, including Huawei, are either owned or backed by the Chinese army, as per the US Defense Department. In order to comply with the US financial sanctions against these firms for national security reasons. The Pentagon's induction do not generate penalties, but the law says the president may thrust accredit that could include blocking all property of the listed parties. The US Defense Department source told Reuters that the document had been sent to Congress, where committees could call on Washington to impose new penalty against the companies. The Defense Department must examine companies that are threat to national security of United States. Huawei has stationed its products and services in more than 170 countries, who have a overtook Ericsson in 2012 as the largest telecommunications- equipment manufacturer in the world, and over took Apple in 2018 as a second-largest manufacturer of smartphones in the world, behind Samsung Electronics. In the letter written to the Secretary of Commerce Wilbur Ross, the concerns about the risk of exporting critical US technologies to companies having Chinese cords, was highlighted by the senators. The senators pressurized for the reviews be escorted to gauge whether Chinese Communist Party had been purloining US technology with military applications, as well as whether it had been volunteering Chinese corporations to trap emerging civilian technologies for military purposes. The US government precedently took initiatives against Huawei and other Chinese firms by prohibiting US companies from selling them certain technology without consent. While, Huawei has disputed claims against it as "unsubstantiated allegations". Significantly, a trade war is set with China with the US stock market suffering a sharp decline.

US financial sanctions against Chinese firms

The Trump administration imposed sanctions on Chinese firm. The department announces that, they have received an unspecific number of Chinese official and business executive who are responsible for deputed south sea area with travel bans. The US government prohibited 11 new Chinese companies from buying American technology and products without a specific licence. As per reports, the firms were responsible for the implications in Human Rights violations in China's thrust targeting Muslim minorities in the Xinjiang region. The US government has also sanctioned Chinese shipbuilding groups which are China Shipbuilding Industry Company which is 14th in rank and China State Shipbuilding Corporation ranked 24th. The communication construction companies were also sanctioned because of their role in constructing artificial islands through operation and other activities that impacted environment of other surrounding Nations. Just after the day when sanctions were announced China accused US for violating international law by imposing penalties. The move comes amidst the revolting tensions between the United States and China. However, the blacklist only prohibits U.S companies from selling technologies to Chinese companies without a license and not from purchasing products.

UK bans Huawei from its 5G network, Impact on UK China relations

The argument that the Chinese government could use Huawei for spying, reiterated by the Trump Administration. The United Kingdom has thus banned Huawei from its 5G telecom network, reversing one of the previous decision to permit the embattled Chinese tech company a restricted role in building the country's super fast wireless infrastructure. The announcement made by the U. K. Government that the operators such as BT (BTGOF) and Vodafone(VOD) have been given until 2027 to remove existing Huawei equipments from their 5G networks. Digital and Culture Minister Oliver Dowden said, " given the uncertainty that creates around Huawei's supply chain, the UK can no longer be confident it will be able to guarantee the security of future Huawei 5G equipment." While Huawei has been consistently denying that it would help the Chinese government to spy, and says it is "100% owned by employees." The Trump administration has been recapitulating allys to exclude Huawei from their 5G networks claiming the Chinese company is a threat to National Security. But it risks a counteraction from China as Britain looks for new trading opportunities around the world after Brexit, and will delay the rollout of 5G across the country by at least a year, Dowden said.

Conclusion

On 14th September 2020 Chinese technology giant was cut off from essential supplies of semiconductors by The United States. And without chips, smartphone cannot be manufactured. America's latest sanction finalized on August 17, 2020 which prohibits the worldwide companies from selling chips to Huawei, which has been made with American domestic companies. The decision of banishment of the products of Huawei from several different countries has resulted a huge blow for the chinese company, which has operated in Britain for 20 years. Europe is a key market for the company reckoning 24% of sales last year. Recently, Huawei announced half year results prior than customary, reporting slower revenue growth. The company is sooner experiencing a decline in the smartphone sales after Washington obstructed it from retrieving popular Google apps. Significantly, the phones became less captivating in markets outside of China. Huawei said it was sanguine that the recent US sanctions would not have swayed "the resilience or security" of its products and described the UK announcement as disappointing. The US sanctions confined companies like TSMC (TSM), a Taiwan-based firm, from exporting computer chipsets and other key components to Huawei. Without them, Huawei can't build the 5G base stations and equipment. Henceforth, Huawei is likely to follow the path which involves Washington granting licences to suppliers so that they can sell chips to the firm in a confined manner. This would let Huawei stay in business. One of its main suppliers, MediaTek, a Taiwanese chipmaker, has petitioned America's Department of Commerce for such a permit. To keep Huawei's edge dull, suppliers keen to produce chips designed by the domestic semiconductor unit, HiSilicon, are unlikely to be issued such dispensation.