Saturday, January 26, 2019
‘All Chinese money into Silicon Valley stops’ after Huawei ban, former Beijing banker warns
24 Jan, 2019
Beijing may cut off all investment to Silicon Valley over Western pressure on China-based Huawei, the former deputy governor of the People’s Bank of China has warned as business leaders gathered in Davos.
“I can tell you, after the Huawei events, all the Chinese money into Silicon Valley stops. And no US money will want to invest into China either,” Zhu Min told CNBC on the sidelines of the World Economic Forum (WEF) on Tuesday. He did not elaborate on what should happen to bring about such an outcome.
The Chinese telecoms giant, which last year even beat US-based rival Apple to become the world’s second-largest smartphone maker, has recently been targeted in the West over alleged spying and claims that it poses a security threat.
Washington banned government agencies from using Huawei’s technology as well as equipment from another Chinese firm, ZTE. It is also reportedly considering fully banning US firms from using the company’s products and is believed to be pushing allies to exert more pressure on the Chinese firms.
Scrutiny over Huawei came amid a bitter trade war between the world’s two biggest economies that cost both US and China billions of dollars after tit-for-tat tariffs were imposed.
Zhu, who also used to serve as deputy managing director of the International Monetary Fund (IMF), noted that the trade conflict could turn into what he called a “tech war.”
“The psychology has really changed, because technical war is a most interconnected war, [with] US capital moving everywhere and Chinese capital moving everywhere,” Zhu said.
Washington is not alone in its apparent concerns and taking measures to target the Chinese tech companies. Huawei faced scrutiny in Australia and New Zealand, which last year barred it and ZTE from providing 5G technology for their networks, citing national security concerns.
Despite the company repeatedly denying the spying allegations and pledging compliance with local laws, some European countries also voiced concerns over China’s Huawei. In one of the most recent cases, Norway said it is considering taking similar steps against the tech giant, such as excluding it from being involved in the country’s 5G telecommunications infrastructure.