US-China: Is Huawei ‘too big to fail’?

For Guo Ping, chairman of Chinese technology group Huawei, Monday was a day like any other. In a speech in the southern Chinese city of Shenzhen, he painted a rosy picture of how Huawei’s technological prowess and leadership in 5G telecoms equipment would transform the company’s hometown into a global digital showcase city.

Hours later, that promise was shattered — shot down by an announcement from the US government that it will use the global dominance of American technology to cut off all supplies of semiconductors to Huawei

In boardrooms and government offices around the world, the new rules sparked frantic discussions about whether the move would deliver a fatal blow to the $122bn company, how quickly Huawei might fold, and what the collapse of the world’s largest telecoms equipment provider would mean for networks in 170 countries that run on its hardware.

While some analysts spoke of it being a “death sentence”, others wondered what lengths Beijing would be willing to go to protect a company at the heart of recent US-China tensions.

One European telecoms executive calls the prospect of the leading supplier in the market collapsing “catastrophic”. Networks are already having to shoulder the cost of reducing the amount of Huawei equipment under growing political pressure…

Read The Full Article