by BEIJING (AP) — The Chinese government on Tuesday accused Washington of pursuing “tech hegemony,” as the United States began to step up pressure on tech giant Huawei. by blocking access to US suppliers.
The Biden Administration stopped approving license renewals for some US companies that sold key components to the Chinese company, according to two people familiar with the matter. Neither was authorized to comment publicly on the sensitive issue and they spoke on condition of anonymity.
The company, which makes networking equipment and smartphones, has been on the U.S. Commerce Department’s Entity List since 2019, which includes those subject to licensing requirements. She was allowed to purchase less advanced components. But the new restrictions could cut off Huawei’s access to processor chips and other technologies, as major US-based companies such as Intel and Qualcomm are forced to cease their activities with it.
Bloomberg News and the Financial Times first reported the administration’s decision.
Huawei Technologies Ltd., China’s top global tech brand, is at the center of a dispute between Washington and Beijing over technology and security. US officials say Huawei poses a security risk and could facilitate Chinese espionage, a charge the company denies.
“China is seriously concerned about this information,” Foreign Ministry spokeswoman Mao Ning said. She accused Washington of “exaggerating the concept of national security and abusing state power” to crack down on Chinese competitors.
“Such practices run counter to the principles of market economy” and constitute “blatant technological hegemony,” Mao said.
The White House and Commerce Department declined to comment on specific deliberations regarding Huawei.
“Working closely with our interagency export control partners from the Departments of Energy, Defense and State, we continuously evaluate our policies and regulations and communicate regularly with external stakeholders,” said the Commerce Department in a statement. “We do not comment on conversations or deliberations about specific companies.”
The decision to suspend licenses for Huawei comes after GOP Rep. Mike McCaul, chairman of the House Foreign Affairs Committee, announced earlier this month that the committee would conduct a 90-day review of the Office of Department of Commerce Industry Security. McCaul said he was ordering the review because the agency had failed to respond to two-year-old requests for information about export control licenses the agency had granted to China.
In a letter to Commerce Secretary Gina Raimondo this month, McCaul said the agency had “failed to comply with its legal obligation to produce requested documents and information.” McCaul on Tuesday called reports that Commerce was suspending exports a “not positive” and called on the department to declare it a permanent decision.
Mao said Beijing would “defend the legitimate rights” of its companies but gave no indication of how the government might respond. Beijing has made similar statements after past US action against its companies, but often does nothing.
A ban on sales of advanced US processor chips and music, maps and other services from Alphabet Inc.’s Google unit has crippled Huawei’s smartphone business. The company sold its low-end smartphone brand Honor to boost sales by separating it from sanctions imposed on its parent company.
The Commerce Department has agreed to grant export licenses to U.S. companies to allow them to sell less advanced chips and other technology deemed to pose no security risk to Huawei. This followed complaints from suppliers who would lose billions of dollars in annual sales.
Huawei rushed to remove US components from its network and other products and launched new business lines serving factories, self-driving cars and other industrial customers. The company hopes that these will be less vulnerable to American pressure.
Huawei says its business is starting to rebound.
“In 2020, we have successfully emerged from crisis mode,” Eric Xu, one of Huawei’s three executives who rotate as chairman, said in a December letter to employees. “US restrictions are now our new normal, and we are back to business as usual.”
Last year’s revenue is expected to be little changed from 2021 at 636.9 billion yuan ($91.6 billion), Xu said.
The tightening of export controls on Huawei comes just days after Japan and the Netherlands reached an agreement with the United States to restrict China’s access to materials used to make advanced computer chips.
Secretary of State Antony Blinken is due to visit China next week. This will be the first visit to China by a senior Biden administration official.
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Madhani reported from Washington.
