March 28, 2023

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Washington stops licenses of American companies to export to Huawei

The Biden administration has stopped granting US companies export licenses to Huawei as it moves toward a complete ban on the sale of US technology to the Chinese telecoms equipment giant.

Several people familiar with discussions within the administration said the Commerce Department has notified some companies that it will no longer grant licenses to any group that wants to export US technology to the United States. Huawei.

The move marks the latest crack in Washington’s campaign to rein in the Shenzhen-based technology company, which US security officials believe helps China engage in espionage. Huawei denies any involvement in espionage.

Trump administration in 2019 impose strict restrictions regarding the export of US technology to Huawei by adding the group to a blacklist called the Entity List. The move was part of a strategy to eliminate Chinese companies that Washington believes pose a threat to the national security of the United States.

But the Ministry of Commerce continued to grant export licenses to some companies, including Qualcomm and Intel, to supply Huawei with technology not related to high-speed fifth-generation communications networks.

Over the past two years, President Joe Biden has taken a tougher stance on China, particularly on cutting-edge technology. In October, it is sweeping restrictions to provide advanced semiconductor and chip making equipment to Chinese groups.

Alan Estevez, chief of the Commerce Department’s Bureau of Industry and Security, is leading a review China policy To determine what steps the administration should take to make it more difficult for the Chinese military to use American technology to develop weapons.

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The latest measure was a “really important step,” said Martin Raser, a technology expert at CNAS, a think-tank.

said Rasser, the former CIA official, referring to its expansion into areas such as undersea cables and cloud computing.

Washington’s move comes as Huawei’s operations stabilize. Eric Xu, the company’s rotating chairman, said in December that 2023 will be the first year that Huawei will return to “business as usual.” According to the company, its 2022 revenue was flat at 636.9 billion renminbi ($94 billion), after a sharp decline in 2021.

The company has ensured its survival with the shift to government and enterprise businesses, especially in China, and its growing cloud business. The fact that the US still allows some exports to Huawei helped avoid a complete meltdown. Huawei is believed to be backing projects in China aimed at building a semiconductor supply chain independent of imports, efforts Washington has also begun targeting.

Industry insiders said it was too early to assess the impact of the latest measures on Huawei. “A blanket indefinite stop would of course be disastrous for Huawei, but the outcome of anything less could be very different,” said a legal expert involved in export license applications.

An executive at the semiconductor design house who has worked with Huawei said change will come when export licenses expire. He added, “Since there are no details on which licenses are granted and when they are public, it becomes difficult to predict.”

Secretary of State Antony Blinken is preparing to travel next week to China, the first visit to the country by a member of Biden’s cabinet.

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The United States is also stepping up efforts with allies to slow China’s push to develop advanced technology such as semiconductors used in artificial intelligence, modeling nuclear weapons and developing hypersonic weapons.

Washington last week They reached an agreement with Japan and the Netherlands to restrict companies in those countries from exporting certain chipmaking equipment to China. In October, the United States imposed unilateral restrictions to prevent US companies from exporting semiconductor manufacturing tools.

Estevez indicated last year that the United States was looking at a number of other areas. Asked about reports that the administration was considering restrictions on quantum and biotechnology, he told CNAS think tank: “If I were someone to bet, I would put money on that.”

No official decision has been made on implementing a comprehensive ban on the export of chips using US technology to China.

The Commerce Department declined to comment but said the agency, along with other government departments, “will continually evaluate our policies and regulations and communicate regularly with external stakeholders.”

Huawei did not immediately respond to a request for comment.

Continued Dimitri Sevastopoulou on Twitter