Will China ban US tech firms?

Huawei: China Prepares Law That May Ban US Tech Firms From Its Market − Report

Sputnik,

25 May, 2019

Beijing's new draft regulation reportedly looks to retaliate against the Trump administration's crackdown on Chinese tech giant Huawei with a ban on US tech companies.

China's Cyberspace Administration has proposed a set of cybersecurity measures which, if signed into law, would require operators of China's critical information infrastructure to "evaluate national security risk" when acquiring foreign products and services, the South China Morning Post reports. 

China's internet watchdog is said to have published the draft regulation online for public feedback until 24 June.

The measures apparently do not specify the potential security risks, instead referring to the broad terms of "leaking, lost and cross-border transfer of key data" and "supply chain security threat".

Such a law would effectively give Beijing leeway in blocking unwanted US technology from Chinese market, said Economist Intelligence Unit analyst Nick Marro.

To recap, last week the US Department of Commerce blacklisted Chinese telecom equipment maker Huawei Technologies and 68 of its affiliates, which means that they now cannot buy parts and components from partners in the US without government approval.

The move was followed by US tech giants, including Google, Intel, Qualcomm, Xilinx, and Broadcom cutting ties with Huawei.

The revocation of Huawei's Android license by Google has raised particular concerns over the future of the Chinese firm's mobile devices, which run on Android.

In this vein, reports surfaced that Huawei is developing its own, alternative operating system. The "Huawei OS" is understood to be "far from ready" for the time being and is expected to become available next spring at the latest.

Meanwhile, Huawei managers say the recent moves by Washington will cause little damage to their corporation but will harm consumers.

"In recent days, restrictions, based on ungrounded allegations, have been imposed on Huawei in order to disrupt our business operations. We believe this behavior is totally unjustified," Huawei's Deputy Chairman of the Board, Ken Hu, said at a cybersecurity conference in Germany on Thursday.

"In Europe, approximately three-quarters of smartphone users rely on an Android-based phone. Huawei accounts roughly for 20% of this market. Such reckless decisions can cause a great deal of harm to consumers and businesses in Europe," he said.

The Trump administration has been seeking to choke off Huawei over allegations that it could be spying on behalf of the Chinese government, which the firm flatly denies.

However, Donald Trump hinted that Huawei, albeit "very dangerous", could be used as a bargaining chip in broader Sino-US trade talks.

"It's possible that Huawei even would be included in some kind of trade deal," Trump stated. "If we made a deal, I can imagine Huawei being included in some form of, some part of a trade deal."

The two world powers are now engaged in negotiations to put an end to the escalating trade war. The latest round of the trade talks wrapped up in the US on Friday without a deal, but the sides agreed to meet for further negotiations in Beijing.

On 9 May, the Trump administration increased the level of tariffs from 10 to 25 per cent on some $200 billion in Chinese imports. Later that day, Trump ordered tariffs to be raised on all remaining US imports from China, which are valued at roughly $300 billion.

It all started last June, after the Trump administration slapped 25 per cent tariffs on $50 billion worth of Chinese goods in a bid to address the trade deficit, prompting Beijing to respond in time. Since then, the sides have exchanged several rounds of trade duties.