Washington halts licences for US companies to export to Huawei

The Biden administration has stopped providing US companies with licences to export to Huawei as it moves towards imposing a total ban on the sale of American technology to the Chinese telecom equipment giant.

Several people familiar with discussions inside the administration said the commerce department had notified some companies that it would no longer grant licences to any group exporting American technology to Huawei.

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

The Trump administration in 2019 imposed tough restrictions on exporting American technology to Huawei by adding the group to a blacklist called the “entity list”. The move was part of a strategy to crack down on Chinese companies that Washington believed posed a risk to US national security.

But the commerce department continued to grant export licences for some companies, including Qualcomm and Intel, to provide Huawei with technology that was not related to high-speed 5G telecom networks.

Over the past two years, President Joe Biden has taken an even tougher stance on China, particularly in the area of cutting-edge technology. In October, he imposed sweeping restrictions on providing advanced semiconductors and chipmaking equipment to Chinese groups.

Alan Estevez, head of the commerce department’s bureau of industry and security, has been leading a review of China-related policy to determine steps the administration should take to make it harder for the Chinese military to use US technology to develop weapons.

Martijn Rasser, a technology expert at CNAS, a think-tank, said the latest action was a “really significant move”.

“The actions by the commerce department are partly driven by the fact that Huawei as a company is a very different animal than it was four years ago when it was focused on 5G,” said Rasser, a former CIA official, referring to its expansion into areas such as undersea cables and cloud computing.

Washington’s move comes as Huawei’s operations have stabilised. Eric Xu, the company’s rotating chair, said in December that 2023 would be the first year in which Huawei would return to “business as usual”. According to the company, its 2022 revenues were flat at Rmb636.9bn ($94bn), after a precipitous decline in 2021.

The company secured its survival with a shift to enterprise and government business, especially in China, and its growing cloud business. The fact the US still allowed some exports to Huawei also helped avert a complete collapse. Huawei is believed to be backing projects in China aimed at building an import-independent semiconductor supply chain, efforts which Washington has also begun to target.

Industry insiders said it was too early to assess the impact of the latest measures on Huawei. “A blanket stop indefinitely would of course be catastrophic for Huawei, but the result of anything short of that could be quite different,” said a legal expert involved in export licence applications.

An executive at a semiconductor design house that has worked with Huawei…

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