TECH

Chinese Communist Regime Attempts to Intimid American Technological Giants

Chinese government officials have summoned representatives of major technology companies from the US and other countries this week to warn them of "dire consequences" if they agree to the Trump government's ban on selling certain technologies to various Chinese companies. The information is from the New York Times and was published on Saturday, citing two "people familiar with the encounters."
The White House has taken steps in recent weeks to effectively ban US companies from doing business with Huawei because of concerns over national security and allegations of commercial theft. The company was added to the so-called "entity list".
This was the latest decision after months of other efforts to effectively prevent Huawei from working on US telecoms projects. It also targets Chinese companies in the midst of a US-China trade war that seems to be escalating rapidly. Several companies, including Google, Intel and Qualcomm, have ceased to act as Huawei's suppliers.
In response, the Chinese government responded with a threat of retaliatory measures, such as creating a "list of unreliable entities" with companies that Beijing be acting anti-competitive. Huawei also argued that national security and commercial theft complaints are a pretext to prevent the company from becoming more powerful and sabotage Chinese initiatives to rapidly implement 5G technology.
According to the Times, the meetings earlier this week involved China's economic planning agency, the National Development and Reform Commission, as well as members of the Ministry of Commerce and the Ministry of Industry and Information Technology.
A specific list of participants has not been published, but there are mentions to US companies Dell and Microsoft and South Korean Samsung. But the statements were directed at a "wide range of companies exporting products to China," including "several semiconductor companies that are among the most important in the world, as well as other technology giants," the Times wrote.
Chinese officials allegedly warned US companies not to move their supply chains out of China and not comply with orders prohibiting trade ties with specific companies, and also encouraged companies to press against the efforts of the Trump government to restricting trade:
At this week's meetings, Chinese officials explicitly warned companies that any move to withdraw their production from China that appears to go beyond standard diversification for security purposes could lead to punishment, according to the two people Chinese officials appeared to have different messages for companies depending on whether they were American or not, people added.
For the Americans, they warned that the Trump government's decision to stop Chinese companies from using American technology had disrupted the global supply chain, adding that companies that followed the policy could face permanent consequences. Chinese officials also suggested that companies should lobby to put pressure on government actions.
Authorities have said that if this does not happen, there may be "permanent" problems for the companies involved, according to the Times. Huawei was not mentioned, but obviously it was in everybody's head. Officials also told non-US companies that they would face no consequences while maintaining normal business relations with their Chinese counterparts, the paper added.
China is one of the world's largest suppliers of an incredible variety of materials and components used in the technology industry. In addition, the country builds numerous products (such as the iPhone) for foreign companies. As the Times has noted, the prospect of permanent disruption of these supply chains could be disastrous, but even so, it is unlikely that US companies would choose to break the law rather than meet Chinese requirements.
According to CNBC, trade disputes triggered a major wave of chip maker stock sales in May as Huawei is estimated to buy about $ 20 billion in semiconductors annually. The Times notes that KPMG consultancy estimates that about 60% of all semiconductors are in some way connected to China. The US has granted 90-day licenses to some broadband mobile and internet providers to continue working with Huawei. Wall Street analysts predict stocks will not recover, according to CNBC. Mundophone via Gizmodo