In the latest round of Trump vs China, the Department of Defense has compiled a list of 20 Chinese companies that it claims are either backed or owned by the Chinese military. Along with Hikvision, China Telecoms, China Mobile and AVIC, the US admin’s chief nemesis, Huawei, predictably landed on the list. (Available here per the Financial Times.)
A 1999 law required the Pentagon to create such a list, but it didn’t follow through with it at the time. However, the escalating conflict between the US and China has seen lawmakers apply renewed pressure on the Pentagon to do so.
The list is aimed at preventing Chinese companies obtaining sensitive US technologies and gives the President the green light to apply sanctions against those included.
Huawei vehemently denies the claim that it has links to the Chinese military. A spokesperson said: “These allegations are categorically untrue and groundless. This is another example of the Trump administration’s political campaign targeting Huawei.” The company maintains that is private and employee-owned, and does not work on “military or intelligence projects for the Chinese government or any other government”.
The company says that CEO Ren Zhengfei served in the military when he was younger, but retired from the army in 1983.
It’s unclear what evidence the Department of Defense’s allegation that the company is backed by the Chinese military is based on. However, the Times reported last year that US intelligence claimed the company had received funding from the People’s Liberation Army, as well as China’s National Security Commission. Huawei said at the time that the allegations were unsubstantiated.
Trump’s administration has raged against Huawei for a while now. It’s put pressure on western countries to exclude the telecommunications company from their 5G networks (something the UK is yet to make a public decision on either way). In a recent parliamentary committee meeting, MPs questioned whether the US’s insistence on excluding Huawei was based on security fears as it claims, or was in fact motivated more by geopolitical strategy.
The US has taken steps to attempt to cut off Huawei’s acquisition of US-made semiconductors, prompting the company to reach out to rival chip makers to weather the storm.
However, the US was forced to backpedal on some of its sanctions last week in order to permit American companies to collaborate with Huawei on establishing technical standards for 5G and other emerging technologies – something the Financial Times framed as a tacit admission that US companies would lose out by forfeiting a seat at the table with Huawei.
The increasing aggression against Huawei is part of a wider strategy of pushing back on China’s global power, spearheaded by China hawks in Trump’s administration, including senator Tom Cotton (who has repeatedly stated the conspiracy theory that coronavirus was manufactured in a Chinese lab).
However, the strategy of isolating China’s technology sector could backfire. Speaking on the Moderate Rebels podcast, renowned US economist Michael Hudson said that doing so could make the country more self-reliant and ultimately even stronger.