Beijing urges US to stop ‘baseless’ crackdown on its firms after Trump reportedly tightens supplies to Huawei

18 Jan, 2021 12:25

China has slammed the latest US move against tech giant Huawei after the outgoing Trump administration reportedly revoked the licenses of companies working with the Chinese firm.

Some companies, which had earlier been cleared to continue doing business with Huawei, now face the revocation of their licenses for exports to the Chinese firm, Reuters reported, citing sources. According to the report, a total of eight licenses from four companies were annulled, including those in respect of key chip supplier, Intel, and Japanese flash memory chip maker Kioxia Corp.

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The Commerce Department also signaled that “a significant number” of license requests for exports to Huawei, some of which were pending approval for months, are likely to be denied, Reuters said. It is believed that US government agencies were still debating whether more than 150 licenses for $120 billion worth of goods and technology should be granted, while another $280 billion of license applications for Huawei have yet to be processed. 

American suppliers to Huawei are meant to receive special approval from the US government to continue doing business with Huawei after the company was added to the US blacklist, officially known as the Entity List. 

“We urge US to repeal the decision and stop baselessly cracking down on foreign businesses,” China’s Foreign Ministry said in response to the possible ban, according to the Global Times. Beijing also vowed to continue “to safeguard legitimate rights of Chinese businesses.”

Neither US officials nor any of the affected companies have officially confirmed the license revocation so far.

Huawei’s laptop business could be hit hard if Intel is unable to continue chip supplies to the company, the Global Times reported, citing analysts. However, the firm has enough chip inventories to keep its business running for up to two months, industry analyst Ma Jihua told the state-linked newspaper.

The Trump administration has been ramping up pressure on Chinese businesses in recent months, adding more and more companies to the trade and investment blacklists over alleged security threats. Earlier this month, the Pentagon claimed that nine more Chinese firms have links to the Chinese military, including major smartphone maker Xiaomi and the Commercial Aircraft Corp of China (COMAC), meaning that US investors will be prohibited from owning their stock.

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