Huawei is well known in the telecommunication sector as the largest company in the world for the
sales of network infrastructure equipment, mainly to mobile operators such as EE and BT but also
to governments around the world, including many UK universities. However, in the past few
months relationships have crumbled amidst claims that Huawei, along with fellow Chinese company ZTE, has been using its equipment to spy on US government allies on behalf on the Chinese government.
Huawei and ZTE rigorously denies these accusations, however that did not stop the Canadian authorities capturing Huawei CFO Meng Wanzhou, based on these claims and that she
misled banks about the relationship between Huawei and Skycom – the latter of which had done
business with Iran.
This news is just a small piece of a bigger picture. That being the ongoing trade conflict between the US and China, and their poor general relations. The US already bans the sale of Huawei mobile
devices in the country due to the spying allegations and with these new accusations and the
imprisonment of one of the country’s leading business-people, it’s safe to say that the ball is in
China’s court and how they react is a worry to everyone.
As everyone knows, a lot of stuff these days is made in China and so a trade embargo could be a real issue for the US and its citizens, particularly in the technology industry, where companies such as Apple source a lot of crucial parts for their devices from Chinese manufacturers. A wrong move by Trump and the US senate could really come back to bite them. As well as altercations with
manufacturing, 20% of Apple’s revenue comes from China, and a lot of other technology companies are in the same boat, as China is a massive population, many of whom can be very tech savvy.
Essentially, the next moves, whether it be by China and Huawei or the US could really cause a big
problem in the technology sector, likely causing prices to rise and stocks to fall, all of which spell bad news for the world economy.