Thursday, January 31, 2019

Which Way HUAWEI?

      Well, now, it's starting to shed some light on Chinese business: the new indictments, that is.  So, on Tuesday, just before the deadline for filing, the US Dept.of Justice asked Canada formally to extradite Meng Wangzou, the CFO of Huawei, the Chinese Tech giant, who has been held in Vancouver, BC, in Canada, since December 1st.   She's not a 'Happy Camper', to say the least.  The request was accompanied by several new charges against her and her father's company stemming from methods and actions taken by the company to evade sanctions imposed against Iran.  Underlying the indictments is more focus on the activities of China with the aid of the company to become the global tech leader in the expansion of information gathering by the Chinese government.  This is alleged to take place in methods of inserting chips into all Huawei products manufactured at home and sold abroad either through other companies using their product or in their own products.  Huawei is a leader in the iphone market.
       All of this takes place during an effort by the White House and its trade negotiators as they attempt to deal with China's unfair business practices of stealing trade secrets and forcing foreign companies to yield to demands for access to proprietary knowledge and patents.  It has long been known that China's government policy has been to make these demands while avoiding similar rules abroad.   As the Chinese economy shrinks because of excess debt, these policies have been exposed for what they truly are: bold statements in an attempt to break the leadership of the West, from the US to Western Europe.   In a further test of new policies, China has been courting its border partner, Russya recently.   A deal announced this year indicates that energy from Russya will now go by pipeline directly to China.   Also, Russya is selling new air defense systems to the Beijing military.  This is also related to the affairs of the other Chinese tech giant ZTE, which was almost ruined last year until Trump was convinced that certain US products could be sold to the company, postponing bankruptcy.
       All of these activities were foreseeable as observers have warned for years about the business tactics imposed on Chinese businesses by Beijing.  Pres. of China, Xi Ji Ping has only enhanced these practices and increased his own power to impose them.  A new president in the US 2 years ago was a convenient time to continue these efforts unabated.   Soon, one could expect China to be evicted from the WT, a member since 2001.   If you don't play by the rules, you're out.  Xi JP knows this.  Perhaps his economy will suffer as a result and his power grab at the top will be questioned by the pretenders to the throne.   How now, HUAWEI?

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