US HEGEMON'S ECONOMIC WAR IS STILL WAR
U.S. stops granting export licenses for China's Huawei - sources



Hi1710 BMC management chip is seen on a Kunpeng 920 chipset designed by Huawei's Hisilicon subsidiary is on display at Huawei's headquarters in Shenzhen

Mon, January 30, 2023 
By Karen Freifeld, Alexandra Alper and Stephen Nellis

(Reuters) -The Biden administration has stopped approving licenses for U.S. companies to export most items to China's Huawei, according to three people familiar with the matter.

Huawei has faced U.S. export restrictions around items for 5G and other technologies for several years, but officials in the U.S. Department of Commerce have granted licenses for some American firms to sell certain goods and technologies to the company. Qualcomm Inc in 2020 received permission to sell 4G smartphone chips to Huawei.

A Commerce Department spokesperson said officials "continually assess our policies and regulations" but do not comment on talks with specific companies. Huawei and Qualcomm declined to comment. Bloomberg and the Financial Times earlier reported the move.

One person familiar with the matter said U.S. officials are creating a new formal policy of denial for shipping items to Huawei that would include items below the 5G level, including 4G items, Wifi 6 and 7, artificial intelligence, and high-performance computing and cloud items.

Another person said the move was expected to reflect the Biden administration's tightening of policy on Huawei over the past year. Licenses for 4G chips that could not be used for 5g, which might have been approved earlier, were being denied, the person said. Toward the end of the Trump administration and early in the Biden administration, officials had still granted licenses for items specific to 4G applications.

American officials placed Huawei on a trade blacklist in 2019 restricting most U.S. suppliers from shipping goods and technology to the company unless they were granted licenses. Officials continued to tighten the controls to cut off Huawei's ability to buy or design the semiconductor chips that power most of its products.

But U.S. officials granted licenses that allowed Huawei to receive some products. For example, suppliers to Huawei got licenses worth $61 billion to sell to the telecoms equipment giant from April through November 2021.

In December, Huawei said its overall revenue was about $91.53 billion, down only slightly from 2021 when U.S. sanctions caused its sales to fall by nearly a third.

(Reporting by Chavi Mehta in Bengaluru, Stephen Nellis in San Francisco, and Alexandra Alper and Karen Freifeld in Washington; Additional reporting by David Kirton in Shenzhen; Editing by Shailesh Kuber and Stephen Coates)


University of Technology Sydney Associate Professor Zhang on tech curbs on China

Tue, January 31, 2023 

Marina Yue Zhang, Associate Professor at the Australia-China Relations Institute of the University of Technology Sydney, says that imposing more tech restrictions on China is not the right strategy for the world, after sources say the Biden administration is considering a full Huawei ban. She speaks to Rishaad Salamat and David Ingles on "Bloomberg Markets Asia."

VIDEO

Japan's chip equipment makers in the dark about new China export restrictions

Mon, January 30, 2023 

TOKYO (Reuters) - Japanese makers of semiconductor manufacturing machinery and materials used to make chips said on Monday they had yet to hear from Japan's government about export restrictions that could directly or indirectly affect their business in China.

Reuters contacted 10 chip-related companies, of which five - Advantest Corp, Nikon Corp, Resonac Holdings Corp, Lasertec Corp and Shin-Etsu Chemical Co Ltd - said they were unaware of any contact from Japan's Ministry of Economy, Trade and Industry about any new restrictions reportedly agreed by Japan, the United States and the Netherlands last week to stymie rival China's technological advancement.

"As we do not know what the situation is, we cannot comment on what the impact is and what our response will be," said a spokesman for Advantest, which makes chip-testing machines and other chip-related equipment.

Past restrictions on advanced semiconductor shipments to China have not affected Japan because the country, which once dominated global chip manufacturing, now only makes around a 10th of the world's semiconductors, most of them less advanced than the chips made by the likes of Taiwan Semiconductor Manufacturing Co Ltd (TSMC) and South Korea's Samsung Electronics Co Ltd.

Japan, however, is a major supplier of machines used to make those leading-edge semiconductors that could come under restrictions following reports Washington and other governments had agreed on a deal to curb their exports to China.

"South Korea has constantly beaten Japan in semiconductors all these years, but one thing they don't have is steppers," which are used to project electronic circuits on to silicon plates, said Tokai Tokyo Research Institute analyst Masahiko Ishino. Without knowing the details of any new restrictions it is impossible to know their impact, he said.

Dutch company ASML Holding NV, a key supplier to chipmakers, said on Saturday it "understood" that progress had been made towards an agreement among several governments.

Its statement followed a Bloomberg report that the United States had secured a deal with the Netherlands and Japan.

The five other Japanese firms Reuters contacted did not respond when asked about the possible impact of tighter export rules and whether they were concerned China would retaliate. Among them was Tokyo Electron Ltd, Japan's biggest semiconductor manufacturing machinery maker.

Shares of Japanese semiconductor equipment makers were mostly flat on Monday, with Tokyo Electron up 0.68% while Advantest Corp fell 0.32%. Nikon Corp was up 0.16%, in line with the benchmark Nikkei average.

(Reporting by Tim Kelly, Mayu Sakoda, Kiyoshi Takenaka and Mariko Katsumura; Editing by Chang-Ran Kim and Christopher Cushing)

China accuses Washington of abusing export controls


Mon, January 30, 2023 

BEIJING (AP) — China’s government on Monday criticized U.S. controls on technology exports as a trade violation, after Japan and the Netherlands agreed to join Washington in limiting Beijing’s access to materials to make advanced processor chips they say can be used in weapons.

The Foreign Ministry didn’t mention the latest development but accused Washington of abusing export controls and organizing other governments to “maintain its hegemony” and contain China.

The United States is trying to block China from acquiring the most powerful processor chips and technology that would help its fledgling industry develop the ability to make them. Washington says they can be used to make weapons and to facilitate the ruling Communist Party’s surveillance and human rights abuses.

“This seriously violates market principles and international trade order,” said a ministry spokeswoman, Mao Ning. She said it “undermines the stability of global industrial and supply chains.”

A person familiar with the agreement told The Associated Press on Sunday that Japan and the Netherlands, important suppliers of technology and raw materials to make chips, agreed to join in U.S. controls.

Mao gave no indication how Beijing might respond to tighter export controls.

The Communist Party has invested billions of dollars to develop its own chip industry, but its vendors still need foreign manufacturing equipment, raw materials and other technology.

Industry experts say Chinese producers are improving but cannot make chips required for the most advanced smartphones and other products.

The Associated Press

Tech War: Biden moves to halt US exports to Huawei, reports say

Monica Miller - BBC News, Singapore

Mon, January 30, 2023 at 10:56 PM MST

Huawei logo on smartphone in front of US flag.

The US government has stopped approving licences for American firms to export most items to Chinese technology giant Huawei, according to reports.

It comes as the Biden administration continues to tighten its rules on exports of US technology to China.

Washington has previously accused Huawei of being a threat to US national security and of working with the Chinese Communist Party.

The company and the Chinese government have repeatedly denied the allegations.

The US Commerce Department has told some American firms that it would no longer issue licences for US technology exports to Huawei, according to the Financial Times, which first reported the story.

The move comes as Washington moves towards a total ban on the sale of US technology to the Chinese telecom equipment giant, the paper said.

"Working closely with our interagency export controls partners at the Departments of Energy, Defense and State, we continually assess our policies and regulations and communicate regularly with external stakeholders," a US Commerce Department spokesperson told the BBC.

"We do not comment on conversations with or deliberations about specific companies," they added.

Huawei declined to comment on the reports.

• The US is beating China in the battle for chips

• How the US-China chip war is playing out

The Biden Administration has continued to tighten restrictions on Huawei as political tensions between Washington and Beijing increased over Taiwan, where most of the world's computer chips are made.

In October, US Under Secretary of Commerce for Industry and Security Alan Estevez said "the threat environment is always changing."

"We are appropriately doing everything in our power to protect our national security and prevent sensitive technologies with military applications from being acquired by the People's Republic of China's military, intelligence, and security services," he added.

For several years the Shenzhen-based Huawei has faced US export restrictions on items for high-speed fifth generation (5G) telecoms equipment and artificial intelligence technology.

In 2019, during the presidency of Donald Trump, US officials added the company to a so-called "entity list."

It means that US companies need to obtain a licence from the government to export or transfer some technologies, especially over concerns that they will be used by the Chinese military.

However, in that time licences have been granted to some US companies, including Intel and Qualcomm, to supply Huawei with technology that was not related to 5G.

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Biden Team Weighs Fully Cutting Off Huawei From US Suppliers

Biden Team Weighs Fully Cutting Off Huawei From US Suppliers

Jenny Leonard and Ian King

Tue, January 31, 2023 at 12:52 AM MST

In this article:

• 

  Donald Trump

  45th President of the United States

(Bloomberg) -- The Biden administration is considering cutting off Huawei Technologies Co. from all of its American suppliers, including Intel Corp. and Qualcomm Inc., as the US government intensifies a crackdown on the Chinese technology sector.

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Sales from US firms to Huawei have been limited for four years, since former President Donald Trump added the Shenzhen, China-based company to the so-called US “entity list” out of national security concerns. US suppliers have since required government approval to sell to the telecom equipment giant.

Now, some officials in the Biden administration are advocating for banning all sales to Huawei — long suspected of ties to the Beijing government and Chinese military — as the administration debates whether and how to adjust its licensing policy, according to people familiar with the matter.

The people asked not to be identified because a decision hasn’t been made.

Tensions with China have been rising throughout Joe Biden’s presidency, and he’s under pressure from Republicans controlling the House to continue squeezing Beijing, particularly to limit the country’s technological advances. Last week, the Biden administration persuaded the Netherlands and Japan to join with the US in restricting exports of advanced semiconductor manufacturing machinery to China.

Beijing “is gravely concerned about the report,” Chinese Foreign Ministry spokesperson Mao Ning said Tuesday at a regular press briefing in Beijing.

“China is strongly against the US’s abuse of state power to hobble Chinese companies by stretching the concept of national security,” she said, adding the Asian nation would protect its companies without saying how.

Read more: Biden Wins Deal With Dutch, Japan on China Chip Export Curbs

Huawei was once one of the world’s largest buyers of electronic components and a hugely important part of the supply chain because of its position in the handset and networking equipment industries. Trump’s ban on certain sales crippled the Chinese company, while wiping out huge amounts of revenue for US suppliers such as Broadcom Inc.

But the Commerce Department continued to allow some other products to be supplied to Huawei. The company remains a $100 billion behemoth that’s spearheading the expansion of the world’s largest 5G network at home, while aiding construction of critical broadband from Africa to the Middle East. In December, the firm declared it was “business as usual” after successfully weathering US tech sanctions.

Stalled Applications

Under the new policy some officials advocate, all license requests to supply the company would be denied. Meanwhile, most current applications for new licenses are languishing in a stalled approval process, the people said, creating a de facto halt.

The longer-term impact on Huawei from that action is uncertain. It still derives enormous revenue from local wireless carriers such as China Mobile Ltd. and state enterprises that rely on Huawei to build local-level and corporate networks. China operates more than 2 million 5G base stations, or more than 60% of the world’s total, according to industry officials.

Huawei’s also been stockpiling foreign components such as chips and sourcing or researching alternatives to American circuitry. Representatives for the company didn’t immediately respond to requests for comment.

Intel and Advanced Micro Devices Inc. provide Huawei with processors it uses in its Mate range of laptops, while Qualcomm sells Huawei processors and modems that are the core components of its diminished range of smartphones.

Spokespeople for the National Security Council and the Commerce Department didn’t immediately respond to requests for comment. Representatives for Intel, Qualcomm and AMD declined to comment.

It’s not clear how soon the administration may act on a policy change, the people familiar with the matter said. They cautioned that discussions are at an early stage, and some of them said timing for a decision could coincide with the four-year anniversary of Huawei’s addition to the entity list in May.

Shutting off sales to Huawei wouldn’t be as devastating for US companies as it once was. The Chinese company has spun off a large chunk of its smartphone business, mostly offers only lower-bandwidth 4G phones under its own name and has seen its brand damaged by the US campaign against it.

Underlining the decline in its importance, Huawei represents less than one percent of revenue for Qualcomm, Intel and AMD, according to Bloomberg supply chain analysis.

--With assistance from Gao Yuan and Philip Glamann.

(Updates with comment from China’s Foreign Ministry from sixth paragraph.)

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