US menaces companies with ties to Huawei and China Mobile – report

The position of the US state towards Chinese telecoms companies seems to be hardening by the day.

Reuters reports that Huawei’s abortive attempt to do a handset deal with AT&T was scuppered by members of Congress lobbying regulators to put a stop to it. On top of that, we’re told, the US government has also blocked a bunch of attempted acquisitions by Chinese companies.

Most ominously of all, Reuters reports that lawmakers are also telling US firms that even if they have ties to Huawei and China Mobile it could hamper their ability to do business with the US state, according to an anonymous insider. Included under ‘ties’ seems to be collaboration over the development of the 5G standard.

At least one member of Congress has put his hand up and moved to pass formal legislation preventing the US state doing business with Huawei and ZTE but this imposition of pressure from the government on private enterprise to treat Chinese companies as pariahs, and to threaten punishment if they don’t, is a significant escalation.

Partly due to the opaque nature of Chinese government and society it’s pretty much impossible to gauge the extent of the relationship between Chinese companies and the Chinese state. There do seem to be justifiable concerns about espionage from America’s biggest economic and political rival, so the current administration seems to be adopting a ‘better safe than sorry’ approach.

It is entirely the prerogative of the state to cherry pick who it does business with but another matter entirely to tell other private companies what to do. There is some precedent for this, with ZTE having been punished for flouting a US list of banned countries, but China is not currently on that list. Trade policy is apparently being made up on the hoof and there’s a very real danger that the resulting uncertainty will hurt all US businesses.

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