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China’s Huawei says it has long prepared for a U.S. assault

Chinese President Xi Jinping is shown around the offices of Huawei Technologies by company founder Ren Zhengfei in London on Oct. 21, 2015. (Reuters)

BEIJING — A battle between Chinese tech giant Huawei and the United States was “inevitable,” its founder said Tuesday, shrugging off any suggestion that Washington would be able to stifle his company’s global ambitions.

Huawei is at the heart of the trade war between the United States and China, an example — according to the Trump administration — of the way that state-supported Chinese companies have gained an unfair advantage over American ones and are now being used to further China’s geopolitical goals.

Ren Zhengfei, a 74-year-old former People’s Liberation Army engineer who built this Chinese industrial titan, is shrugging off the Trump administration’s efforts to block Huawei Technologies’ products from being used in the United States and around the world. 

“I’ve sacrificed myself and family for the sake of our goal to stand on top of the world,” Ren told a group of Chinese journalists Tuesday, according to a transcript published by state-run China Central. “To achieve this goal, a conflict with the U.S. is inevitable.”

China's foreign ministry says the country continues to attract investors despite President Trump’s claim that his tariffs are causing companies to move away. (Video: Reuters)

Ren’s daughter is Meng Wanzhou, the chief financial officer of Huawei who has been under house arrest in Canada since the start of December and is fighting an American extradition request. She is wanted in New York to face charges related to allegedly breaching American sanctions against trading with Iran.

The Trump administration last week added Huawei to a trade blacklist because the company “is engaged in activities that are contrary to U.S. national security or foreign policy interest,” banning American firms from selling to Huawei without special approval from the government.

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The Commerce Department slightly eased the timing of the restrictions Monday night, just before Ren held his news conference, saying it would allow some transactions to continue for 90 days to facilitate “certain activities necessary to the continued operations of existing networks and to support existing mobile services.” 

The temporary reprieve will allow Huawei to receive U.S. equipment to service existing Huawei cellphone users and rural broadband networks. For instance, Google said on Tuesday it would continue to provide software updates and security patches for the next 90 days to owners of Huawei phones, which use Google’s Android operating system.

Huawei is the world’s largest technology equipment maker and the largest provider of equipment used in 5G telecom networks. It has overtaken Apple to become the world’s second-largest seller of cellphones after Samsung. 

The tech giant has an annual procurement budget of $70 billion and last week said that more than $1 out of every $7 it spends goes to equipment from U.S. companies like Intel and Qualcomm. It also buys Android operating software for its smartphones from Google, which has now said it will restrict the company’s access to future updates.

Ren said that the delay in imposing the ban didn’t matter much to Huawei because it had been preparing for this moment for some time.

“Last year, I guessed the U.S. would attack within two years and we’d have plenty of time to prepare, but the Meng Wanzhou case made us realize it was happening earlier than I expected,” he said, referring to his daughter’s arrest and detention. 

Ren suggested that Huawei had been stockpiling chips. The company will not encounter extreme supply shortage “as we are well prepared,” he said.

Analysts believe that Huawei has long been getting ready for a situation like this, remembering a time in 2013 when Chinese institutions had moved to block some American tech companies. Furthermore, the Trump administration blocked Huawei’s much smaller competitor, ZTE, from doing business with U.S. firms in a move that spelled certain death for the company. President Trump, however, later eased ZTE’s punishment.

“Huawei has been accumulating experience and technology for decades and it can hang on. It has the confidence for the short run,” said Fu Liang, a telecommunications analyst based in Beijing. “For the long run, it’s hard to predict what might happen as Huawei is affected by the broader environment.”

Asked how long these challenges might go on, Huawei’s Ren said: “You need to ask Trump, not me, about this.”

How China’s Huawei took the lead over U.S. companies in 5G technology

China’s Foreign Ministry continued its sharp criticism of the U.S. moves against Huawei.

“As we have said many times, the U.S. is using its national means to oppress and smear a certain Chinese company, and this will serve no one’s interests in the end,” spokesman Lu Kang told reporters Tuesday. “In international relations, and when doing trade, we must follow the principle of equality and mutual benefit. We will defend our companies’ legitimate rights and interests,” he said.

The Chinese government sees the Trump administration’s actions on Huawei and the broader trade war as part of an American effort to contain China’s rise and stop it from challenging the United States as the world’s No. 1 superpower.

State media have been full of exhortations to prepare for a long fight with the United States, portraying the trade war as an epic battle, even changing television schedules to run old war movies.  

The People’s Daily, the mouthpiece of the Communist Party, said Tuesday that trying to stop China’s development and rise is like “a praying mantis trying to stop a car with its arms.”

Meanwhile, the official Xinhua News Agency published some Chinese proverbs on its social media account on Tuesday, suggesting that the U.S. officials would be well advised to learn them. They included “fool oneself as well as others” and “those who do not have justice on their side will get little help.”

Wang Yuan and Liu Yang contributed to this report.

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Today’s coverage from Post correspondents around the world

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