China hits out as Huawei put on US blacklist

World | 17 May 2019

China warned the United States yesterday against further harming trade ties after President Donald Trump effectively barred Chinese telecom giant Huawei from the US market, escalating tensions between the world's top economic powerhouses.

At the same time, Beijing's diplomatic relations with Ottawa further soured as China formally arrested two Canadians on suspicion of snatching state secrets in a case seen as retaliation over Canada's arrest of Huawei finance chief Meng Wanzhou.

The spat over Huawei adds to the uncertainty over efforts to revive a deal that would end the bruising US-China trade war.

The Chinese commerce ministry said it had no information on a US plan to come to Beijing to continue talks, after US Treasury Secretary Steven Mnuchin said he would likely visit China in the near future.

"The US's bullying and maximum pressure tactics have caused the China-US economic and trade talks to suffer a serious setback," ministry spokesman Gao Feng said.

Trump stepped up the US battle against Huawei when he signed an executive order prohibiting the purchase or use of equipment from companies that pose "an unacceptable risk to the national security of the United States" or the safety of the American people.

The US Commerce Department followed up by adding Huawei to a blacklist that will make it much harder for the firm to use US components in its phones, telecom gear, databases and other electronics.

"We urge the US to stop its incorrect actions," Gao said. "China has said many times national security issues should not be abused."

The US Department of Commerce's Bureau of Industry and Security said it would add Huawei and its affiliates to its "entity list" over alleged Iran sanctions violations.

The listing requires US firms to get a license from BIS for the sale or transfer of American technology to a company or person on the list.

American officials have been trying to persuade allies not to allow China a role in building next-generation 5G mobile networks, warning that doing so would result in restrictions on sharing of information with the United States.

Huawei said "unreasonable restrictions" will infringe upon its rights and raise serious legal issues. "Restricting Huawei from doing business in the US will not make the US more secure or stronger; instead, this will only serve to limit the US to inferior yet more expensive alternatives," the firm said.

Canada has also been dragged into the spat after arresting Meng Wanzhou in December on a US extradition warrant related to Iran sanctions violations.

Shortly after, former Canadian diplomat Michael Kovrig and a businessman, Michael Spavor, were detained on national security grounds. The Chinese foreign ministry said yesterday the two have now been formally arrested.


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