US-China Trade Relations (Huawei) A selection of interesting articles on this topic by Victoria Palamar

№ 1. United States: ZTE and Huawei are listed as US national security threats for fear of the rise of China’s technology

U.S. lists Huawei and ZTE as “U.S. national security threats”, Ministry of Foreign Affairs responds.

On July 1st, according to foreign media reports, the Federal Council formally ruled on June 30, local time that China’s Huawei and ZTE are listed as «national security» and prohibit the operating companies from purchasing government funds from these two Chinese companies.

In response, Chinese Foreign Ministry spokesperson Zhao Lijian said at a regular press conference of the Ministry of Foreign Affairs on the 1st that China has repeatedly stated its position on this matter. State forces suppress specific countries and specific enterprises.

This kind of economic bullying by the US is a blatant denial of the market economy principles that the US has always advertised. Zhao Lijian said that we once again urge the United States to stop generalizing the concept of national security, stop deliberately discrediting China, stop unreasonably suppressing Chinese companies, and provide a fair, just and non-discriminatory environment for Chinese companies to operate in the United States. (World Wide Web)

Since Huawei was targeted by the United States, the patriotic enthusiasm of our people has been thoroughly aroused. I can’t wait to start a war with the American emperor right away, a battle and a shame. Even if there is no war, at least the corresponding countermeasures will be introduced, such as sanctions on US-related companies, in order to let the United States know that it should not make an inch of it.

Mainly discuss a question, why the United States should impose sanctions on Huawei and ZTE.

The most common voice now is: In order to protect its hegemony and for its own interests, the United States will not hesitate to pool the power of the whole country to target Chinese companies. Its purpose is to protect its position and suppress China’s technological development.

The changes in Sino-US relations began after Trump became president. Launching a trade war against our country makes us feel targeted. However, the US trade war targets the whole world, including the European Union, and its strategic purpose is to reduce the trade deficit and collect more tariffs. The trade war is not just against China.

No one knows the specific content and conditions of the Sino-US trade negotiations. But can the sanctions on Huawei be understood as the United States wants to do business in China, but China does not allow it, so it sanctions Huawei?

Translated by Victoria Palamar, a 3rd-year student of the faculty of oriental studies and history, a member of the APIR CENTER.



№ 2. America-China conflict

Since the U.S. Department of Defense and the Department of Commerce announced in 2019 that U.S. contractors are prohibited from purchasing equipment and technology from several companies such as Huawei, ZTE, Hikvision, Dahua Technology, the U.S. government departments have revised the federal government in accordance with the U.S. National Defense Authorization Act. Temporary restrictions were imposed on the procurement conditions, and many companies such as Huawei and ZTE were included in the “list of entities” in the United States.

On the evening of May 15, 2020, the U.S. Department of Commerce once again escalated its sanctions against Huawei, requiring that chips produced using U.S. technology and equipment must also be approved by the U.S. before they can be sold to Huawei. This means that the U.S. is trying To cut off Huawei’s global chip supply, the Trump administration decided to list 20 top Chinese companies including Huawei and Hikvision as “owned or controlled” by the Chinese military. This may impose new financial sanctions on the US paving.

The U.S. sanctions on Chinese companies will make it quite uncomfortable for the time being, because the basic structure of domestic technology companies is based on the underlying structure of U.S. technology companies for research and development. U.S. sanctions have a huge impact on them. For example, the U.S. prohibits Harbin Institute of Technology. Using the American software MATLAB for scientific research is equivalent to a sharpshooter without a gun. No matter how superb your skills are, you will not be able to use the least ability.

Similarly, at present, Huawei HiSilicon is only realizing independent research and development of chip design, and chip manufacturing is entirely dependent on partners. Among them, TSMC Semiconductor Manufacturing Co., as the world’s largest chip processing manufacturer, is also Huawei’s most important chip manufacturing partner.

If TSMC Semiconductor Manufacturing Company does not accept orders in accordance with US regulations, Huawei’s mobile phones and communication equipment will be greatly affected. The sanctions imposed by the United States have made domestic companies accustomed to using the results of foreign technology companies miserable. Companies with their own technology can still survive in the opposite direction. Although they have an impact, they are not fatal.

However, companies that are not competitive can only be soft, rectify their companies according to the requirements of the United States, and pay huge fines and deposits. For example, when ZTE was sanctioned by the United States, it lacked a backup plan and was required by the United States to send security consultants to supervise. The fines made ZTE Corporation’s vitality seriously injured.

Translated by Victoria Palamar, a 3rd-year student of the faculty of oriental studies and history, a member of the APIR CENTER.



№ 3. US sanctions

Huawei: Will not become a target of US sanctions and still buy US chips this year

Netease Technology News, July 8, according to foreign media reports, a Huawei co-chairman told a French media that the company believes that it will not become a target of US sanctions and that it will still buy US chips this year.

Currently, Huawei is the world’s largest manufacturer of telecommunications network equipment and the third largest smartphone manufacturer in the world. The company is a private company, and Huawei has repeatedly denied that it has an internal relationship with the Chinese government.

Several U.S. congressmen claimed last month that Huawei’s research funding for American universities posed a “major threat” to U.S. national security. This has become the latest difficulty facing Huawei’s operations in the US.

When asked if he was worried that his company would also be sanctioned, Ken Hu, one of Huawei’s rotating chairmen, told the French media LeJournal Du Dimanche, “It’s hard to imagine. Ten years ago, we had Established a system to control our exports, which has become very effective. Our policy is to strictly enforce all laws and regulations proposed by Europe, the United Nations and the United States.

«When asked whether Huawei could not use American components, Hu Houkun said that the company’s logistics chain is international. “We must be open and choose the best technology and the best products. Therefore, this year we will continue to buy American chips»

Earlier this year, U.S. Congressmen asked Alphabet’s Google to reconsider its cooperation with Huawei. They called Huawei a security threat. In addition, the company’s transaction with US telecom operator AT&T regarding the sale of Huawei smartphones in the United States was also blocked due to so-called security concerns. (Tianmen Mountain)

Translated by Victoria Palamar, a 3rd-year student of the faculty of oriental studies and history, a member of the APIR CENTER.



№ 4. China competitor

Trump administration: China is the only biggest competitor that may pose a threat in the future of science and technology!

Following the report in April this year that “Huawei is about to withdraw from the US market” from foreign research institutions, there have been rumors in the industry that “Huawei has decided to abolish all its bases and withdraw from the US market” recently.

Recently, Jean Baptiste Su, a writer for Forbes, vice president and chief analyst of a global technology consulting and intelligence company, wrote that from the recent statements of Huawei’s executives, the United States is no longer part of Huawei’s global strategy, so Huawei will The U.S. business has been rapidly reduced, and it is expected that it will completely withdraw from the U.S. market by the end of 2018.

Huawei responded to this news. Huawei said: “The news about the withdrawal from the U.S. market is not true. Thank you for your attention to Huawei.” However, for Huawei’s refutation of rumors, some people in the industry believe that “Huawei’s development in the U.S. It is getting more and more difficult, and it is not impossible to temporarily abandon the US market.

Translated by Victoria Palamar, a 3rd-year student of the faculty of oriental studies and history, a member of the APIR CENTER.



№ 5. Behind the U.S. Sanctions on Huawei – An in-depth interpretation of the pain of China’s «chip»

On May 15, 2020, after the U.S. government threatened TSMC to cut off Huawei’s supply, the U.S. Department of Commerce officially issued an announcement confirming that it would restrict global manufacturers that use U.S. technology to supply Huawei. All manufacturers must obtain advance notice from the U.S. government. Only then can we continue to supply to Huawei.

Prior to this, the United States only included Huawei on the list of entities on May 16, 2019. U.S. companies would not be able to supply products to Huawei without the permission of the U.S. Department of Commerce. The physical inventory incident has dealt a huge blow to Huawei. For example, Huawei’s mobile phones cannot use Qualcomm chips, and Google stopped cooperating with Huawei. As a result, Huawei lost access to Android system updates. Later, Huawei also disclosed the well-known “Hongmeng” system and Huawei HiSilicon.

However, after a year, the US sanctions on Huawei have been upgraded again, requiring foreign companies that use US chip technology and equipment to obtain US licenses before they can supply chips to Huawei and its affiliates.

In this new round of crackdowns, I will give you a few key points: this restriction is only aimed at one Huawei company, not all Chinese companies; the restricted targets are not only US companies, but global Huawei supply chain companies; not completely The supply is prohibited, but the US government license is required before the supply can be supplied; there is no restriction on the proportion of US technology used, and even the previously exposed low threshold of 10% is gone.

To put it simply, this new rule is to use the power of the United States and its global allies to mobilize the global technology industry to attack a Chinese Huawei company in all directions without dead ends. The cheeky side of the United States can be described as vivid and vivid.

The United States has seized the weakness of China’s semiconductor industry. From the ZTE incident to the complete blockade of Huawei, it directly reflects the most real situation of China’s IC industry. In the field of semiconductors, what China needs to challenge is the industrial system accumulated in the West for hundreds of years. China Semiconductor has been creeping forward under the enemy’s artillery fire. Today, the enemy’s artillery fire is getting more and more fierce.

Translated by Victoria Palamar, a 3rd-year student of the faculty of oriental studies and history, a member of the APIR CENTER.



№ 6. Sanctions on Huawei: Harm to the telecommunications industry, the global semiconductor industry and the US economy

The US’s new trade policy against Huawei has disrupted the network of relations between the electronics industry and global trade, posing a threat to the leadership of the US semiconductor industry.

The impact of this policy far exceeds the 5%-15% sales loss that many US companies have already suffered (the loss may even reach more than 40%), weakening R&D expenditure and the competitiveness of US semiconductor companies.

China is likely to retaliate, and has determined to reduce its dependence on imported semiconductors by increasing investment in the country’s semiconductor industry.

At the same time, the new trade policy has caused chaos in the industry, forcing Huawei to start stocking chips and looking for alternative suppliers of chips, and it has also made the wireless telecommunications industry, especially the 5G field, feel chills.

The United States should not demonize China, Huawei, and other Chinese companies. Instead, it should formulate a comprehensive trade policy that recognizes and considers China’s own interests, and develop long-term strategies to maintain and enhance the United States’ innovation capabilities.

On May 15, 2020, Sino-US relations deteriorated again. The Trump administration announced that it would suspend all semiconductor sales of US companies to Huawei. Out of dissatisfaction with semiconductor transactions outside the control of the United States, the Trump administration stated that it will prohibit any manufacturer in the world that uses American semiconductor equipment from selling semiconductors to Huawei and impose sanctions on any countries that do not cooperate. Before the new semiconductor sales policy takes effect, manufacturers have a 120-day buffer period to make adjustments.

Senator Ben Sasse of Nebraska (Republican) said, “The United States needs to kill Huawei.” In the 2016 election, most Nebraska voters were Trump supporters. Secretary of State Mike Pompeo appointed by Trump recently stated that “Huawei equipment is a Trojan horse”, implying that malware and backdoors are hidden in Huawei equipment.

Why does the U.S. government oppose Huawei so strongly?

Since World War II, countries have achieved reconstruction and modernization one after another, and have benefited from the ever-expanding global trade. Relatively speaking, this reduces the importance of the United States. Some American workers and communities had to face the situation of shifting production overseas, while some Americans accused China of being the chief culprit.

American “hawks” toward China have pushed Trump to the throne of the presidency. They blame China and sometimes even blame China for problems that have nothing to do with China.

At first, Trump seemed to use the threat to Huawei as a bargaining chip in trade negotiations, but this time the new policy on Huawei is much more than that. At a time when the Sino-US trade agreement seems to have completely broken down, we believe that Huawei, as a symbol of China’s modernization and technological progress, especially due to its advantages in the 5G field, has caused the company to be attacked by the United States. As we all know, 5G can help enterprises all over the world realize transformation by improving communication efficiency.

Attacking Huawei and China is in line with the wishes of Trump voters and helped Trump divert the public’s attention from the US government’s ineffective response to the new crown pneumonia. As of press time, the number of deaths from new coronary pneumonia in the United States has exceeded 100,000.

The whole story of the escalating trade war between China and the United States and the analysis of the accusations against Huawei are beyond the scope of this article. It can be said that Huawei’s opponents have produced almost or no evidence to prove Huawei’s illegal acts.

Short-term impact

TSMC and other fabs that use US semiconductor equipment to produce chips have increased their chip production capacity before the end of the 120-day buffer period, especially for mobile phone chips using 7nm CMOS process technology. These chips are mainly flowed to Huawei and Qualcomm’s mobile phone customers. These chips include HiSilicon’s Kirin 810, Kirin 980 and Qualcomm’s Snapdragon 855 processors, which are mainly used in 4G and 5G smartphones. Before the introduction of the new US policy, the demand for 7nm chips was too large, causing TSMC’s production capacity to be tight.

More than 60% of the world’s semiconductors are designed by fabless chip companies such as Qualcomm, and produced by foundry companies such as TSMC, GF, UMC, SMIC, Powerchip and Samsung. Mobile phone chips, especially processors, almost all come from fabless fabs. All these foundries use American semiconductor equipment.

Huawei cannot simply switch from HiSilicon chip to MediaTek or even Ziguang Zhanrui chip without violating the new US policy, because these companies are fabless, and the fabs that help its foundries use American semiconductors. Equipment production chip:

-US semiconductor equipment manufacturers include Applied Materials, KLA, Teradyne, Fanlin Group and Cohu. The total share of these companies in the semiconductor production equipment market is approximately 50%.

  • Semiconductor equipment made in the United States includes equipment used by service providers for chip packaging and testing, such as ASE Semiconductor, Amkor Technology, Silicon Precision Industries, STATS ChipPAC, Licheng Technology, CORWIL Technology, and Qibang Technology.
  • Although there is no exact data, Strategy Analytics estimates that more than 90% of semiconductors use US semiconductor equipment more or less.

Although many semiconductor equipment companies are established in the United States and are still headquartered in the United States, they are all global companies with global offices and production bases, and all semiconductor equipment parts come from all over the world.

Create chaos: This new policy in the United States forces executives in the semiconductor industry to re-examine their product lines, production partnerships, customers and distributors, and many lawyers have to re-examine the consequences of different responses to this policy. Many semiconductor companies told us that they are looking for loopholes and solutions in the new policy, so as to continue to supply Huawei in some way. The chaos caused by this policy alone has inhibited the entire electronics industry.

We doubt whether the United States can ban the sale of semiconductors produced abroad using American semiconductor equipment. When the United States announced a new policy against Huawei, China’s semiconductor stocks soared. What is unexpected is that Trump’s new policy will help China achieve self-sufficiency in semiconductors, which is clearly recognized by investors in Chinese semiconductor companies.

Translated by Victoria Palamar, a 3rd-year student of the faculty of oriental studies and history, a member of the APIR CENTER.


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