Huawei phones are the latest shot in the US-China technology war

In the midst of the US Commerce Secretary’s goodwill visit to China last week, Huawei, the telecommunications giant facing tough US trade restrictions, unveiled a phone intelligence shows how difficult it has been for the United States to contain China’s technological prowess. .

The new phone is equipped with a chip that appears to be the most advanced version of Chinese domestic technology to date – the kind of achievement the US is trying to prevent China from achieving.

The timing of its release may not be a coincidence. The Commerce Department is leading US efforts to limit Beijing’s access to cutting-edge chips, and Commerce Secretary, Gina M. Raimondo, has spent much of her trip defending it. U.S. crackdown on Chinese officials who pressed her to reduce some of her law violations. rules.

Raimondo’s powerful role – as well as China’s aversion to US restrictions – was reflected online, where more than a dozen suppliers appeared on Chinese e-commerce sites. to sell phone cases for a new model with Mrs. Raimondo’s face printed on it. backside. The edited images show Ms Raimondo holding the new phone, alongside phrases such as “I’m Raimondo, this time I support Huawei” and “Huawei Raimondo Mobile Phone Ambassador”.

Chinese media see the phone as a sign of the country’s technological independence, but US analysts say the achievement is most likely dependent on the use of US technology and machines. this may violate US trade restrictions.

Beginning with the Trump administration and continuing under President Biden, the United States has gradually increased restrictions on the sale of advanced chips and the machinery needed to manufacture them to China and Huawei in particular, in order to block China’s ability to master technology. that could support its army.

For years, those restrictions have limited Huawei’s ability to produce 5G phones. But Huawei seems to have found a way around those limitations to make an advanced phone, at least in limited numbers. While details about the phone are limited, Huawei’s jade green Mate 60 Pro seems to have many of the same basic features as other smartphones on the market.

A phone test by TechInsights, a Canadian company specializing in semiconductor industry analysis, concluded that the advanced chip inside is manufactured by China’s International Semiconductor Manufacturing Corporation and is outperforming beyond the technological limits that the United States is trying to enforce.

Douglas Fuller, an associate professor at the Copenhagen Business School, said SMIC appears to have been using stockpile equipment before the restrictions went into effect, equipment licensed to SMIC aimed at making chips for companies. non-Huawei and spare parts purchased through third-party suppliers. to produce it together.

“The official position in China about heroically breaking the US imperialist technological blockade is incorrect,” Fuller said. “Instead, the United States has allowed SMIC to continue to have substantial access to American technology.”

Huawei and SMIC did not respond to requests for comment. The Commerce Department also did not respond to a request for comment.

Commentators on Chinese social media and news sites hailed the release of the smartphone as proof that US restrictions have not stopped China from developing its own technology.

The state-run Global Times newspaper said in an editorial: “Regardless of Huawei’s intentions, the launch of the Mate 60 Pro has been instilled in many Chinese netizens with a deeper meaning of ‘rising up’. under US pressure’.

The phone was launched in a week when both US and Chinese officials made many statements about renewing cooperation and communication. Chinese officials have asked the United States to lift restrictions on chip exports. But Ms. Raimondo – whose emails along with other US officials were targeted by Chinese hackers this year – told reporters she took a hard line on technology control during her meetings, said the United States was unwilling to lift restrictions or compromise on national security issues.

During the trip, Ms. Raimondo and her advisers held a dialogue to share information on how the United States enforces its technology controls. She said the step would help China better comply but was not an invitation for China to try to ease export controls.

Ms. Raimondo also met directly with Chinese Premier Li Qiang during her visit. According to Xinhua, a week ago, Mr. Li visited Huawei during his visit to southern China and met with the company’s founder, Ren Zhengfei.

The release of the Huawei phone raises questions about whether Ms. Raimondo’s department will continue to try to build goodwill with Chinese officials – or is it likely to take a more active stance in preventing it. blocking Chinese access to American technology.

The Biden administration is preparing to issue a final version of the tech restrictions it first introduced last October, and revised rules could be in place within weeks.

Huawei’s phone development doesn’t necessarily represent a huge step forward in China’s technological prowess – or a complete failure of US export controls, analysts say.

Because Chinese companies no longer have access to the most advanced machines for making semiconductors, they have developed new solutions that use older machines to make more powerful chips. But these methods are both relatively time-consuming for manufacturers, and produce a higher rate of defective chips, limiting the scale of production.

“This does not mean that China can produce advanced semiconductors at scale,” said Paul Triolo, associate partner on China and technology policy at Albright Stonebridge Group, a consulting firm. big”. “But it shows what incentive the US control has created for Chinese companies to cooperate and try new ways to innovate with their existing capabilities.”

This is the first major salvo in a decade or more struggle for China’s semiconductor industry to reinvent parts of the global semiconductor supply chain without have American technology”.

Nazak Nikakhtar, a partner at Wiley Rein and a former Commerce Department official, said Huawei’s progress was “a result of longstanding US policy” – specifically, US licenses that allow companies to The company continues to sell advanced technology to companies set out by the Department of Commerce. called entity lists, like Huawei and SMIC.

According to information released by the House Foreign Affairs Committee in February, from January 3 to March 31, 2022, the Commerce Department approved licenses to sell $23 billion in technology products to companies in the United States. entity list.

“Where there are gaps in the licensing policy, exports will be channeled through those loopholes,” said Nikakhtar. “The US government needs to close the gap if it intends to restrict exports of critical technologies to China.”

In a statement on Wednesday, Representative Mike Gallagher, the Wisconsin Republican who heads the congressional committee on China, called for an end to all US technology exports to both Huawei and Huawei. SMIC. US chipmakers such as Qualcomm and Intel have received export licenses.

Claire Fu report contributions.