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Huawei Deputy Chairman Isn’t Optimistic Firm Will Reconcile With U.S. Anytime Soon

November 18, 2019, 3:12 PM UTC

In May, U.S. tension with Huawei boiled over, with the U.S. government putting the Chinese telecommunications giant on its so-called “entities list,” which prohibits American companies from doing business with Huawei without a specific export licenses.

Some six months later, Ken Hu, deputy chairman of Huawei Technologies Co. Ltd., says he sees no reason for optimism that the conflict will reach a quick conclusion.

“It won’t finish with this administration,” Hu said at the Fortune Global Forum in Paris on Monday.

Rather, Huawei is responding to the U.S. trade ban by increasing purchases from European suppliers by 60%, Hu said. The uptick in purchases from European firms will come at the expense of U.S. ones. Prior to the ban, Huawei had purchased $11 billion of goods annually from the U.S., he said.

The U.S.’s move has prevented U.S. semiconductor companies, such as Micron, from supplying Huawei. It has also meant Huawei, the world’s second-largest smart phone maker, has had to ship its phones, which run on Google’s open source Android operating system, without pre-installed Google applications.

President Donald Trump, under pressure from U.S. technology CEOs, has promised several times to accelerate the granting of limited export licenses, but so far none have been issued. It has, however, granted a series of temporary license reprieves that have allowed U.S. companies to continue to trade with the Chinese firm.

Earlier Monday, Reuters reported the U.S. was set to grant Huawei a further such license extension for 90 days. The news agency cited two anonymous sources familiar with the deliberations.

Behind the ban is the U.S. allegation that Huawei could help Chinese intelligence agencies penetrate foreign communications networks and represents a national security threat.

The U.S. has put pressure on allies around the world to likewise prohibit Huawei equipment from being used in sensitive government communications networks and in the development of next generation 5G networks. Some, such as Australia, have banned Huawei from key telecom infrastructure, but others, like Germany, have refused to do so.

Hu, who’s also rotating chairman of Huawei and served as rotating CEO of the company between 2011 and 2018, said the impact of the U.S. ban on sales to Huawei would hit small-and-medium sized U.S. companies the hardest. “It’s quite unfortunate and unfair to the employees of all those U.S. companies and their family members,” he said.

He also said that given the intractable nature of the dispute with the U.S., the company had no long-term plan for how to address the American market. But he asked provocatively, “without strong innovation and without open competition, what is the long-term plan for the U.S.?”

Hu also predicted that 5G networks, which have now been launched in 20 countries on a limited scale, would provide coverage for 58% of the world’s population by the end of 2025. He said that while it took four years for the first 70 million people to gain access to the earlier 4G wireless technology, 5G would reach that number of people in just two years.

Correction, Nov. 18, 2019: An earlier version of this story quoted Hu stating that the number of people used as a benchmark for the speed of network adoption was 700 million. Huawei later said he misspoke; the figure has been changed to 70 million.

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