“Finance” reporter Xie Lirong Zhou Yuan’s special correspondent in Washington, D.C.
Mark / Edit
Late on the night of April 25, Beijing time, the Wall Street Journal reported that the U.S. Department of Justice investigated whether China’s largest telecom equipment company Huawei violated the ban on Iran’s exports. This has made it more difficult for Huawei, which has already been restricted, to conduct business in the United States.
The US Department of Justice, the Ministry of Commerce, and the Ministry of Finance declined to comment on the issue to the Wall Street Journal.
When responding to the “Finance” inquiries, Huawei stated that: Huawei will strictly abide by applicable laws and regulations in the markets it operates, as well as international export control laws and sanctions including the United Nations, the United States, and the European Union.
Caijing did not find out about the agency’s launch of an investigation into Huawei’s investigation on the US Department of Justice’s website. However, when “Financials” searched the history of the US Department of Justice’s website, it found that the agency did not make public practice during the investigation stage. Only publish the final decision document and related news.
On April 16, the U.S. Department of Commerce banned U.S. companies from engaging in any transactions with China’s second-largest telecom equipment company ZTE, triggering ZTE’s survival crisis.
Four days after the incident occurred, on April 19, the US-China Economic and Security Review Committee of the US Congress released the report "Analysis of Vulnerability of China's Federal Information and Communication Technology (ICT) Supply Chain against China" (Supply Chain Vulnerabilities from China in US Federal Information and Communications Technology, hereinafter "US ICT Supply Chain Risk Report".
The report said that the Chinese government may support certain Chinese companies to conduct commercial espionage activities' in order to increase the competitiveness of Chinese enterprises and promote the interests of the government. ZTE, Huawei, Lenovo, Inspur, BOE, Chinese Academy of Sciences, China Electronics Technology Group (CECT), Beijing Huasheng Tiancheng and other 19 companies were named.
These 19 companies are all state-owned holdings, and the country's leading enterprises may have a national defense background.
The original intention of this report was to analyze and study how the U.S. government should manage the risks associated with products and services from China, as well as the degree of participation of Chinese companies in its ICT supply chain. However, they chose to publish and clearly name the list at this sensitive node. The company on the shudder.
The "US ICT Supply Chain Risk Report" stated that BOE and TPV provide display screens for Dell companies in the United States; Lenovo and Huawei provide various hardware products for U.S. companies, with the risk of 'network spying'.
On April 20, Chinese Foreign Ministry spokesperson Hua Chunying responded to the report and stated that the US frequently sets limits on Sino-U.S. trade and investment activities in the high-tech field on the grounds of national security. It is apparently in the name of national security that it protects trade. The actualism revealed that the United States can't allow you to have the hegemony mentality only if I can.
A company executive on the list told the Caijing reporter that if the new round of China-US trade negotiations went smoothly, it might not be a material risk to be included in the list. However, choosing to explode the list at this time could be regarded as an 'effective threat'.
According to a report in The Wall Street Journal, the Trump administration believes that it is competing with China for control of this rapidly growing digital world. The Chinese government can completely order Huawei and ZTE to control the telecommunications equipment produced by them and make their equipment perform such interruptions. Communication, espionage or launching cyber attacks.
According to the “Wall Street Journal” report, a Huawei spokesperson stated that the company is owned by employees and that no government requires it to monitor or destroy another country. He said that since Huawei has a global supply chain, it poses no more risk than competition. The opponent is bigger.
According to the latest report from market research firm IHS Markit, in 2017, Huawei became the only telecom equipment vendor whose share increased, its share increased from 25% in 2016 to 28%, replacing Ericsson as the world's largest; ZTE Corporation won last year With a global market share of 13%, Huawei ZTE collectively takes 41% of the global telecom equipment market share.
However, China Telecom’s telecommunications equipment company’s market share in the US telecommunications market is less than 1%. In contrast, Finland’s Nokia and Sweden’s Ericsson’s market share in the US telecommunications market is 48%.
The U.S. Congress issued a report in 2012 that Huawei and ZTE may become China’s official funded espionage or vandalism.
Since then, almost every year, relevant investigative agencies have provided the US Congress with a report on the risk of Chinese companies in the US ICT supply chain.
The U.S. Department of Commerce sanctioned ZTE and the U.S. Department of Justice investigated Huawei as the legal basis for U.S. export control laws.
All major countries in the world have export control policies. This is a kind of trade control method adopted in the interest of national security.
U.S. export control laws restrict the export of several types of products: military or defense products, dual-use products and technologies, certain nuclear materials and technologies, and the development of nuclear weapons, chemical weapons, biological weapons, or missile technology used to launch these weapons. product.
Related to China and criticized mainly is the second category of military and civilian dual-use products and technologies, which involves many high-tech products and technologies.
In particular, it is worth noting that the U.S. export control system is also used to enforce U.S. economic sanctions against specific countries, such as Cuba, Iran, Syria, North Korea, and Sudan.
According to the U.S. Export Control Law, any company must apply for export licenses to the above-mentioned five embargoed countries directly or indirectly. If U.S. regulations are violated, the related company may be subject to three penalties: 1. High civil compensation; 2 3. Criminal custodial executives; 3. Companies are blacklisted and cannot purchase US products directly or indirectly for a period of time.
ZTE is subject to a third type of punishment.
ZTE is not a U.S. company or a U.S. listed company. Therefore, the U.S. Department of Commerce has adopted a third way of sanctioning: It issued a ban on ZTE’s U.S. suppliers and prohibited them from continuing to provide U.S.-made U.S.-made products.
That is, when U.S. equipment or parts suppliers supply ZTE, they must first apply for export permits, and such permit applications are usually rejected.
Judging from past cases of sanctions for violation of U.S. export control laws, there are mostly cases of fines.
In 2005, Boeing was fined $615 million by the U.S. government for illegally using military chips for the export of civilian aircraft, unauthorized use of patent documents, and bribery of government officials.
In 2012, Ericsson sold telecommunications equipment to Cuba. Afterwards, Ericsson received penalties from the US government and paid a fine of US$1.75 million.
On issues such as Iran, Cuba, and Sudan, the U.S. government also imposed a fine of up to 1.921 billion U.S. dollars on HSBC and a fine of 330 million U.S. Agricultural Credit Bank. Credit Suisse and the German Commercial Bank also paid similar fines.
It is generally believed that with the start of a new round of trade negotiations between China and the United States, the U.S. government will no longer use Chinese technology companies. President of the United States, Trump, said on April 24th that U.S. Secretary of the Treasury Mukhinchin and trade representative Lettzelze Will lead the delegation to China to negotiate trade issues in the next few days.
Trump told the media before a bilateral meeting with French President Mark Long that China and the United States were serious about the consultation.