Hello again Global Impact readers,
This week, John Artman, the SCMP’s technology editor, is in charge of the newsletter. He looks at how Huawei has fared in the two years since their CFO was arrested in Canada.
Best,
John Carter
Senior Editor
Political EconomyAs Meng case continues, Huawei’s future still uncertain
When Meng Wanzhou, CFO of Huawei Technologies Co. and daughter to founder Ren Zhengfei, stepped off her plane in Vancouver on December 1, 2018 for a regular stopover, little did she know that she would quickly become a piece in a much larger chess game between the Trump administration and China.
Two years and a new incoming president later, things could be looking up for Meng. Last week, the US Justice Department began negotiations that could see her freed. To do so, she would need to admit to some of the bank and wire fraud charges she faces in the US in connection to alleged violations of US sanctions on Iran. Both Meng and Huawei deny any wrongdoing.
Justin Trudeau, prime minister of Canada, has not commented on the negotiations, opting instead to emphasise that the release of two Canadian citizens held in China for more than two years is his "top priority”.
Meng's story, however, is just one part of a much larger one.
In May 2019, US President Donald Trump signed an executive order that, while not naming Huawei directly, effectively cut them off from doing business with American companies. Days later, Google announced that Huawei could no longer carry Android on its new devices. Huawei, however, was prepared, saying “All companies have business continuity plans … [it is the] only responsible way to do business”.
Even though the Shenzhen-based company has been forced to make constant changes to its products and borrow money from its employees, they claim to have enough chips for all their businesses... except smartphones.
In order to cope, the company in November sold its budget smartphone brand, Honor, to a consortium of over 30 agents and dealers. Huawei said the sale will help Honor’s channel sellers and suppliers “make it through this difficult time” and the move was made by Honor’s industry chain to “ensure its own survival”.
Less than 10 days later, Ren, at a farewell party for Honor, told his company that he hopes Honor will be ". . .the strongest competitor of Huawei in the world, surpass Huawei, and even use defeating Huawei as your motivation”.
On top of that, Huawei has repurposed its internet of things operating system (OS), Harmony OS, for smartphones, saying it will be on its latest phones in 2021.
While any short-term relief for the company doesn't seem likely, many are optimistic that if not softer, the incoming Joe Biden presidency will at least have a more coherent strategy.
- South China Morning Post, SCMP -
Hello again Global Impact readers,
This week, John Artman, the SCMP’s technology editor, is in charge of the newsletter. He looks at how Huawei has fared in the two years since their CFO was arrested in Canada.
Best,
John Carter
Senior Editor
Political EconomyAs Meng case continues, Huawei’s future still uncertain
When Meng Wanzhou, CFO of Huawei Technologies Co. and daughter to founder Ren Zhengfei, stepped off her plane in Vancouver on December 1, 2018 for a regular stopover, little did she know that she would quickly become a piece in a much larger chess game between the Trump administration and China.
Two years and a new incoming president later, things could be looking up for Meng. Last week, the US Justice Department began negotiations that could see her freed. To do so, she would need to admit to some of the bank and wire fraud charges she faces in the US in connection to alleged violations of US sanctions on Iran. Both Meng and Huawei deny any wrongdoing.
Justin Trudeau, prime minister of Canada, has not commented on the negotiations, opting instead to emphasise that the release of two Canadian citizens held in China for more than two years is his "top priority”.
Meng's story, however, is just one part of a much larger one.
In May 2019, US President Donald Trump signed an executive order that, while not naming Huawei directly, effectively cut them off from doing business with American companies. Days later, Google announced that Huawei could no longer carry Android on its new devices. Huawei, however, was prepared, saying “All companies have business continuity plans … [it is the] only responsible way to do business”.
Even though the Shenzhen-based company has been forced to make constant changes to its products and borrow money from its employees, they claim to have enough chips for all their businesses... except smartphones.
In order to cope, the company in November sold its budget smartphone brand, Honor, to a consortium of over 30 agents and dealers. Huawei said the sale will help Honor’s channel sellers and suppliers “make it through this difficult time” and the move was made by Honor’s industry chain to “ensure its own survival”.
Less than 10 days later, Ren, at a farewell party for Honor, told his company that he hopes Honor will be ". . .the strongest competitor of Huawei in the world, surpass Huawei, and even use defeating Huawei as your motivation”.
On top of that, Huawei has repurposed its internet of things operating system (OS), Harmony OS, for smartphones, saying it will be on its latest phones in 2021.
While any short-term relief for the company doesn't seem likely, many are optimistic that if not softer, the incoming Joe Biden presidency will at least have a more coherent strategy.
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12 December 2020 |
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Hello again Global Impact readers,
This week, John Artman, the SCMP’s technology editor, is in charge of the newsletter. He looks at how Huawei has fared in the two years since their CFO was arrested in Canada.
Best,
John Carter
Senior Editor
Political Economy
As Meng case continues, Huawei’s future still uncertain
When Meng Wanzhou, CFO of Huawei Technologies Co. and daughter to founder Ren Zhengfei, stepped off her plane in Vancouver on December 1, 2018 for a regular stopover, little did she know that she would quickly become a piece in a much larger chess game between the Trump administration and China.
Two years and a new incoming president later, things could be looking up for Meng. Last week, the US Justice Department began negotiations that could see her freed. To do so, she would need to admit to some of the bank and wire fraud charges she faces in the US in connection to alleged violations of US sanctions on Iran. Both Meng and Huawei deny any wrongdoing.
Justin Trudeau, prime minister of Canada, has not commented on the negotiations, opting instead to emphasise that the release of two Canadian citizens held in China for more than two years is his "top priority”.
Meng's story, however, is just one part of a much larger one.
In May 2019, US President Donald Trump signed an executive order that, while not naming Huawei directly, effectively cut them off from doing business with American companies. Days later, Google announced that Huawei could no longer carry Android on its new devices. Huawei, however, was prepared, saying “All companies have business continuity plans … [it is the] only responsible way to do business”.
Even though the Shenzhen-based company has been forced to make constant changes to its products and borrow money from its employees, they claim to have enough chips for all their businesses... except smartphones.
In order to cope, the company in November sold its budget smartphone brand, Honor, to a consortium of over 30 agents and dealers. Huawei said the sale will help Honor’s channel sellers and suppliers “make it through this difficult time” and the move was made by Honor’s industry chain to “ensure its own survival”.
Less than 10 days later, Ren, at a farewell party for Honor, told his company that he hopes Honor will be ". . .the strongest competitor of Huawei in the world, surpass Huawei, and even use defeating Huawei as your motivation”.
On top of that, Huawei has repurposed its internet of things operating system (OS), Harmony OS, for smartphones, saying it will be on its latest phones in 2021.
While any short-term relief for the company doesn't seem likely, many are optimistic that if not softer, the incoming Joe Biden presidency will at least have a more coherent strategy.
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Two years on, Huawei still fighting for survival as CFO extradition ongoing
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Meng Wanzhou’s arrest two years ago today focused international attention on Huawei but the company had been on Washington’s radar for many years before | | | • | The hammer blow came in May 2020 when Washington required foreign chip makers that use US technology to apply for a license to sell chips to Huawei
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On December 1, 2018 Meng Wanzhou, Huawei Technologies’ CFO and daughter to founder Ren Zhengfei, was arrested at Vancouver airport as she changed planes en route to Mexico. Infuriating Beijing, which retaliated by arresting two Canadian nationals, the arrest also marked a turning point in Huawei’s fortunes. Two years on, the Shenzhen-based company has been cut off from the advanced US technology it desperately needs to stay at the forefront of its 5G and smartphone ambitions. To cope, the company last month “divorced” from its budget smartphone brand Honor and has refocused on less vulnerable business lines. Read more
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Will Joe Biden fix Canada’s broken relations with China? It’s about more than Meng Wanzhou
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Arrest of Huawei’s Meng blighted Sino-Canada relations during the Trump presidency – but even if she is freed, US policy will still affect Ottawa | | | • | Next US president may be less hostile than Donald Trump, but he promises a multilateral approach to China that may be hard for Canada to resist, observers say
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As the Biden administration takes the reins in Washington, the stakes have never been higher for the US relationship with China and the rest of Asia. In the fifth part of a post-US-election series, Ian Young explores how Beijing may face a more united front from Washington and Ottawa, and how detained Huawei Technologies CFO Meng Wanzhou figures into the equation. From his first white-knuckle handshakes with Prime Minister Justin Trudeau, US President Donald Trump has strained the conventions of Canada’s relationship with its neighbour and most important ally. Read more
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US sanctions on Huawei spell trouble for Shenzhen
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Huawei’s success has been a major factor in Shenzhen’s transformation from a fishing village to an international tech hub | | | • | Analysts say US sanctions on the company will be a blow not just to the city, but the broader Chinese economy
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When Ren Zhengfei, a former officer in the People’s Liberation Army, established Huawei in the Shenzhen special economic zone in 1987, the boomtown was still struggling to gain a meaningful spot in China’s economic landscape. It was dwarfed not only by neighbouring Hong Kong, but by other mainland Chinese cities. Few could have imagined then that four decades later the one-time fishing village would emerge as the poster child for Chinese economic development. Fewer still would have predicted that Huawei, now a key part of the city’s economy, would become a global telecommunications equipment giant that Washington sees as a security threat and potential challenger to the US-led world order. Read more
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No clear end to China-Canada relations slide which began with Huawei arrest
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Economists and global affairs experts find no way forward as 50 years of friendship continues to sour on many fronts | | | • | All agree Ottawa is caught up in the increasingly bitter rivalry between Beijing and Washington
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Relations between Ottawa and Beijing plunged dramatically in the two years after 2016 when Chinese Premier Li Keqiang hailed “a new golden decade” between the two countries – a warm echo of his predecessor Zhu Rongji who in 1998 described Canada as “China’s best friend in the world”. All that changed in December 2018 when China and Canada became locked in a prolonged political and judicial struggle, with Ottawa caught in the middle of an increasingly bitter tug of war between Beijing and Washington, to which experts who gathered online for a webinar on Tuesday could see no quick solution. Read more
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China unleashed ‘wolf warrior’ diplomacy on Canada. It may have backfired
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Ambassador Cong Peiwu’s remarks on the safety of 300,000 Canadians in Hong Kong may have stiffened the Trudeau government’s stance, and emboldened China hawks | | | • | The contentious comments ‘make it far less likely that Canada will do China’s bidding’ said a former ambassador to Beijing
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Canada’s foreign minister started last week by hailing the 50th anniversary of diplomatic ties with China, and the importance of dialogue. But by Thursday, Francois-Philippe Champagne was delivering a dressing down to Beijing’s ambassador, Cong Peiwu, for “unacceptable and disturbing” remarks about Canadians in Hong Kong, in which Cong accused Canada of encouraging “violent criminals” by reportedly granting refugee status to Hong Kong pro-democracy protesters. Read more
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US-China tech war fuels battle over semiconductors, Taiwan
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Semiconductors are the cornerstone technology of the information age and key to the US-China tech war, as well as both nations’ relationship with Taiwan | | | • | China trails the US, South Korea and Taiwan in the production of chips but is rolling out a suite of measures to bolster research and financing for the sector
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As voters in the United States prepare for the presidential election on November 3, the South China Morning Post is exploring the potential ramifications for China. The 12th part in the series looks at the importance of semiconductors in the deteriorating US-China relationship. Read the entire series here. A spiralling tech war between the United States and China has reinvigorated Beijing’s ambitions for semiconductor independence in recent months and turbocharged efforts in Washington to thwart its plans, leaving chip-making powerhouse Taiwan caught in the crossfire. Read more
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To keep track of the latest developments on the outlook for Huawei, follow our daily coverage on our website or focus on Huawei.
In our next newsletter, we’ll take a look at the biggest issues of the year: coronavirus, US-China tensions, and Hong Kong’s National Security Law.
We’d welcome your feedback. Email us at globalimpact@scmp.com or tweet us at @scmptech. Plus, be sure to check out our Tech news feed for the latest news and analysis.
All the best,
John and John
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John Artman
Editor, Technology
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This newsletter is created and catered for the global news reader. Each issue will feature a news story originating from China that carries a significant macro impact on the rest of the world.
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