China Summons Foreign Tech Firms After US’s Export Ban on Huawei

June 9, 2019 Updated: June 9, 2019

BEIJING—Chinese authorities summoned global technology companies for talks last week, following last month’s U.S. ban on selling technology to China‘s Huawei, two people familiar with the matter told Reuters on June 9.

The blacklisting of Huawei, the world’s largest maker of telecom network equipment, bars U.S. companies from supplying it with many goods and services, because of what Washington said were national security issues, a potentially crippling blow that sharply escalated U.S.-China trade tensions.

Huawei denies that its equipment poses a security threat.

Soon afterward, Beijing announced it would release its own list of “unreliable” foreign entities. It also has hinted that it will limit its supply of rare earth elements to the United States.

A person at U.S. software giant Microsoft said the company’s session with Chinese officials wasn’t a direct warning but it was made clear to the firm that complying with U.S. bans would likely lead to further complications for all sector participants.

The company was asked not to make hasty or ill-considered moves before the situation was fully understood, the person said, adding that the tone was conciliatory.

Microsoft declined to comment.

The New York Times first reported on the meetings, led by China’s National Development and Reform Commission (NDRC), saying major foreign tech firms were warned against complying with the U.S. ban or potentially face what the newspaper described as dire consequences.

The NDRC didn’t immediately reply to a faxed request for comment from Reuters.

It isn’t unusual for China to summon representatives of foreign and domestic companies, sometimes in groups, to make its views heard.

One person with another U.S. tech company in China, who was briefed by colleagues on the company’s meeting, told Reuters that the tone was “much softer” than expected.

“No mentioning of Huawei. No ultimatums. Just asked to stay in the country, contribute to the win-win negotiation,” the person said, declining to be identified by name or company, given the sensitivity of the matter.

“I think they realize they still need U.S. tech and products for now; self-sufficiency will take a long time, and only after then, they can kick us out,” the person said.

The New York Times reported that other companies summoned for meetings on June 4 and 5 included U.S. computer maker Dell, South Korea’s Samsung Electronics and SK Hynix, and UK chip designer ARM, which last month halted supplies to Huawei.

Samsung and SK Hynix declined to comment; Dell didn’t immediately respond on June 9 to an emailed request for comment; and a spokesperson for ARM couldn’t immediately be reached.

Last week, Reuters reported that Facebook was no longer allowing pre-installation of its apps on Huawei smartphones. Google also announced that it would suspend its business with the Chinese company, which runs Android systems on its smartphones.

While a number of international standards-setting and research bodies also announced that they would restrict access to Huawei in order to comply with the U.S. ban, some have since reinstated the company.

By Cate Cadell and Michael Martina