Huawei CEO: Effects from U.S. trade restrictions are limited:The Asahi Shimbun

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Ren Zhengfei, chief executive officer of Huawei Technologies Co. (Photo by Keiko Yoshioka)

SHENZHEN, China–The head of major Chinese telecommunications equipment maker Huawei Technologies Co. downplayed the effects from the Trump administration’s “blacklisting” of his company.

Ren Zhengfei, chief executive officer of the firm, made the comment regarding Washington’s restrictions on U.S. companies’ exports of their products to Huawei, which took effect on May 17.

“The influences will not be big, but we are not expecting a particularly good growth,” Ren told Japanese and other media representatives at the company’s head office in Shenzhen, southern China, on May 18.

As for Washington’s decision to impose trade restrictions, Ren said, “We are not violating any laws.”

The restrictions will make it impossible for Huawei to procure high-quality parts from the United States for its products such as smartphones. However, Ren did not refer to any concrete influences from the restrictions on his firm’s production.

Meanwhile, Ren said that moves to expel Huawei had existed from 15 years ago and, therefore, he had predicted that conflict with the United States would emerge.

“We had been quietly making preparations,” Ren said.

He emphasized that Huawei had strengthened its production of parts or procurement of parts from companies in countries other than the United States.

Ren asked Japanese companies for cooperation to maintain “supply chains” for Huawei’s products, saying, “Huawei and Japanese firms have extremely strong complementary relations.”

According to Ren, Huawei’s sales in the January-March period of this year increased 39 percent from the same period last year. However, the growth rate fell to 25 percent in April due to the intensified trade friction between the United States and China.

As the Trump administration’s restrictions on exports to Huawei started in May, Ren said, “The growth rate this year will not reach 20 percent,” staying about the same level as last year.

In April 2018, Washington also imposed similar restrictions against Chinese telecommunications equipment maker ZTE Corp. The company became unable to import U.S.-made semiconductor chips and plunged into a management crisis.

Eventually, ZTE paid a huge amount of fines, replaced board members and accepted a monitoring team from the United States.

As for Huawei, Ren said, “We will not take measures like those taken by ZTE.”

He added, “We have yet to decide on whether to file a lawsuit against the United States.”

Ren criticized the Trump administration for increasing pressure on China with tariffs.

“Today, (the United States) threatens a country. The next day, it threatens a different country. Who can take the risk of making investments?” Ren said.

Amid growing pressure from the United States, Huawei’s base stations were introduced by telecommunication carriers in South Korea for the next-generation 5G service. Huawei is also receiving orders for 5G products from Europe and newly emerging countries.

Huawei is importing smartphone parts and other products worth a total of about 700 billion yen ($6.4 billion) from Japanese companies annually.

Due to the U.S. administration’s restrictions on exports to Huawei, however, Japanese firms are now thinking about whether to maintain their ties with the Chinese company.

Still, Ren hopes to strengthen Huawei’s relations with Japanese companies, saying repeatedly, “Huawei is not in competition with Japanese firms.”

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