May 16, 2022

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Huawei, escape from Moscow. Chinese plans and US sanctions

According to rumors, the Chinese tech giant Huawei plans to give up part of its business in Russia as long as the war in Ukraine continues. With the western withdrawal, the Moscow market is tempting Beijing companies. But US sanctions are scary

The Russian war in Ukraine is also costing Huawei. Among the many Chinese companies that have ended up in the whirlwind of the crisis between Russia and the West, giant Shenzen, one of the world’s first mobile operators, is now facing a real crisis.

to me Forbes Russia The Chinese technology company is considering suspending operations in Russia and transferring part of its business and employees. Crocci confirmed by sources close to Huawei a Formiche.net: Continuing to do business in the Russian tech market while the bombs continue to fall in Ukraine risks turning into a throwback, and not just in terms of image.

Recoil from Huawei, founded by a former Chinese army officer Ren ZhengfeiHe already lived on his skin. In fact, it has been at the center of international controversy for years. United States, first with Barack Obamathen with Donald Trump And now with Joe Biden At the White House, they accused the Chinese giant of establishing a symbiotic relationship with the Beijing government and installing back doors in the 5G network for espionage purposes, and demanded that allies and partners exclude its products from structures sensitive to national security.

Today Huawei wants to avoid being seen. With the US threat of secondary sanctions looming, continuing to operate in Russia as if nothing had happened could deliver a huge bill for the company, which has already had to review plans and turn around US isolation.

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Hence the ideas of recent weeks: According to the Russian newspaper Izvestia Since the end of March, Huawei has suspended new contracts with Russian operators and required some of its Moscow employees to work in smart mode. To confirm the frequency two weeks ago was the same company vice president, Guo Bingspeaks of an “accurate assessment” of risks.

On paper, the war in Ukraine could be a godsend for China’s tech pioneer. Its main European competitors, Finland’s Nokia and Sweden’s Ericsson, have announced their desire to withdraw from the Russian market as long as the invasion continues. Thus opening up a real highway for Chinese business: according to the analysis company Dell’Oro, the two European companies respectively control 60% and 40% of the radio equipment market in Russia, which is a near-monopoly. What’s more: in the first two weeks of March, at the height of the invasion, sales of Huawei smartphones in Russia tripled, he explains financial timesThanks to the withdrawal of the world’s number one competitor in the sector, Apple from Russia.

All is well, or almost. Yes, because filling the gaps left by Western multinational corporations is not as easy as it seems. A provision remains pending for Huawei, dropped by Trump three years ago, that prevents it from using US components to assemble any of its products. A guillotine has forced Huawei to drastically scale back its ambitions in markets that rely largely on American technology, from microchips to other branches of electronics.

Washington’s pressure did not diminish, but on the contrary. More than one has left the Department of Treasury and Commerce in the Biden administration in the past few weeks friendly reminder Chinese companies tempted by the decline in the Russian market. In early April imposed sanctions on the Treasury led Janet Yellen Against 21 chip companies, including one in Singapore, it sounded like a warning in Beijing. It is no coincidence that the chorus of diplomacy against secondary US sanctions, aimed at forcing China to choose an area it does not seem prepared to undertake, is growing.

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