Huawei is trying hard to reverse US position. And what if it succeeds?

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Huawei, inevitably, now that Joe Biden is in and Donald Trump is out of the White House, is trying to persuade the US to alter its position on Chinese companies. China’s overall position supports and reflects these efforts.

Ren Zhengfei, the Founder and CEO of Huawei, has made his first public appearance since last March. During his presentation at the virtual World Economic Forum (whose strapline, amusingly, is ‘Committed to Improving the State of the World’) he urged the US to have a more open policy towards technology firms. He pointed out that the current ban on supplying chips and other equipment was hurting US companies as well.

Part of the ban has seen Huawei phone sales slide badly.

While Zhengfei was playing the diplomat and urging peace, his lawyers in Washington DC have been busy building a case against the FCC, which will attempt to prove that the US position – that Huawei and others pose a security threat – is unfounded and should be reversed.

The question is: has the damage been done?

Even if Huawei proves that the FCC ‘exceeded its statutory authority and violated Federal rules’ what will it actually achieve.

The Trump administration managed to get a ‘rip and replace’ order through before it left office, which ordered US companies to take out Huawei (and other) kit, with a fund to recompense them.

The ex-President and his team also managed to put enough pressure on its allies to adopt a similar approach. Britain, notably, caved in and has ordered telecoms companies to rip and replace Huawei equipment within five years. Australia has adopted a similar policy.

Even if Huawei wins, which will take a couple of years, it will likely be a moral victory at best. Telecoms companies will not rip and replace again, just because people are playing politics. It makes no commercial sense.

It is more likely that the Zhengfei diplomacy campaign will get more traction, and the situation and unexpected consequences of the Trump administration’s ban on chip sales will look increasingly short-sighted.

Let us hope some common sense is used in the coming months; otherwise, a childish tit-for-tat approach will lead to some serious problems, mainly in the chip shops.

China is as ready as the US for an escalating sanctions war.

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