Connect with us

Technology

Trump Administration Says Huawei, Hikvision Backed by Chinese Military: Document

Avatar

Published

on

The Trump administration has determined that top Chinese firms, including telecoms equipment giant Huawei Technologies and video surveillance company Hikvision, are owned or controlled by the Chinese military, laying the groundwork for new US financial sanctions, according to a document seen by Reuters on Wednesday.

A US defense official, speaking on condition of anonymity, confirmed the authenticity of the document and said it had been sent to Congress. Washington placed Huawei on a trade blacklist last year over national security concerns and has led an international campaign to convince allies to exclude it from their 5G networks.

The list of 20 companies that Washington alleges are backed by the Chinese military and operate in the United States was first reported by Reuters. It also includes China Mobile Communications Group and China Telecommunications as well as aircraft manufacturer Aviation Industry Corp of China.

The designations were drawn up by the Defense Department, which was mandated by a 1999 law to compile a list of Chinese military companies operating in the United States, including those “owned or controlled” by the People’s Liberation Army that provide commercial services, manufacture, produce or export.

The Pentagon’s designations do not trigger penalties, but the law says the president may impose sanctions that could include blocking all property of the listed parties.

Huawei, Hikvision, China Mobile, China Telecom, AVIC, and the Chinese Embassy in Washington did not respond to requests for comment.

The Pentagon has come under pressure from lawmakers of both US political parties to publish the list, amid rising tensions between Washington and Beijing over technology, trade and foreign policy.

Last September, top US Senate Democrat Chuck Schumer, Republican Senator Tom Cotton and Republican Representative Mike Gallagher penned a letter to Defense Secretary Mark Esper raising concerns about Beijing’s enlisting of Chinese corporations to harness emerging civilian technologies for military purposes.

“Will you commit to updating and publicly releasing this list as soon as possible?” they asked in the letter.

On Wednesday, Cotton and Gallagher praised DOD for releasing the list and urging the president to impose economic penalties against the firms.

The White House did not comment on whether it would sanction the companies on the list, but said it saw it as “a useful tool for the US Government, companies, investors, academic institutions, and likeminded partners to conduct due diligence with regard to partnerships with these entities, particularly as the list grows.”

The list will likely add to tensions between the world’s two largest economies, which have been at loggerheads over the handling of the coronavirus pandemic and China’s move to impose security legislation on Hong Kong, among multiple points of friction that have worsened this year.

Last week, China threatened retaliation after President Donald Trump signed legislation calling for sanctions over the repression of China’s Uighurs.

The list “is a start, but woefully inadequate to warn the American people about the state-owned and -directed companies that support the Chinese government and Communist Party’s activities threatening US economic and national security,” Republican Senator Marco Rubio, who sponsored the Uighur bill, said in a statement.

Spotlight on US ties

The list will also turn a spotlight on US companies’ ties to the Chinese firms as well as their operations in the United States.

In 2012, US-based General Electric set up a 50/50 avionics joint venture with AVIC, known as Aviage Systems, to supply equipment for China’s C919 passenger jet.

The Defense Department list also includes China Railway Construction Corp, China Aerospace Science and Industry Corp (CASIC), as well as CRRC, the world’s largest maker of passenger trains, which has clinched contracts in Boston, Philadelphia, Chicago and Los Angeles by underbidding rivals.

The companies did not immediately respond to requests for comment.

Many of the companies listed are already in the crosshairs of US regulators. Both Huawei and Hikvision were added to a Commerce Department blacklist last year, which forces their US suppliers to seek licenses before selling to them.

In April, the US Justice Department and other federal agencies called on the Federal Communications Commission to revoke China Telecom (Americas) Corp’s authorisation to provide international telecommunications services to and from the United States. The telecoms regulator rejected a similar request by China Mobile last year that had been pending for years.

© Thomson Reuters 2020

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Apps

Facebook Repairs Bug That Prompted Brief iOS App Outages

Avatar

Published

on

By Agence France-Presse | Updated: 11 July 2020

Popular smartphone apps including Spotify and Pinterest suffered outages Friday for a few hours due to a bug in Facebook’s systems.

Facebook has resolved the problem, a spokesperson said.

“Earlier today, a code change triggered crashes for some iOS apps using the Facebook SDK,” or software development kit, the spokesperson said.

“We identified the issue quickly and resolved it. We apologise for any inconvenience.”

App users began reporting on Twitter early Friday that they were unable to open Spotify and other sites.

Downdetector, which monitors for internet problems in real time, showed a rise in problems for a number of applications, including Spotify, Pinterest, Waze, and The New York Times.

It reported a major spike in problems around 10:30am GMT (4pm IST), and a decline in user issues at around 1pm GMT (6:30pm IST).

Continue Reading

Internet

US Unveils Tariffs on France Over Digital Tax but Delays Collection

Avatar

Published

on

By Agence France-Presse | Updated: 11 July 2020

The United States on Friday unveiled heavy import duties on France in retaliation for the country’s tax on American tech giants, but will hold off on collecting the fees to allow time for the dispute to be resolved.

The office of US Trade Representative Robert Lighthizer found France’s digital services tax was discriminatory and “unfairly targets US digital technology companies,” and will impose 25 percent punitive duties on $1.3 billion (roughly Rs. 9,770 crores) in French products.

However, it will suspend the tariffs until January 6, 2021 while discussions continue over the disagreement.

France approved the tax last summer on tech firms like Facebook, Amazon, Apple, and Google, which were accused of moving their profits offshore to evade taxes.

But in January, Paris suspended collection of the tax through the end of the year.

French cosmetics and handbags will be subject to the US tariffs, but champagne, camembert and Roquefort were spared, according to the final product list after USTR collected thousands of public comments on the retaliation plans.

The sides have been trying to a negotiate a deal through the Organisation for Economic Co-operation and Development that would address the policy dilemma of taxing profits earned in one country by a company based in another with a more favourable tax policy.

But the talks have not made much headway and were suspended due to the coronavirus pandemic. Meanwhile, more countries are considering following France’s example.

Lighthizer said Thursday that the US “won’t tolerate” unfair treatment, although he acknowledged that there is a problem with multinational corporations offshoring profits to avoid paying taxes.

But he said the French tax “didn’t even do a clever job of veiling the fact that they were just trying to get into the pocket of US companies.”

A USTR investigation in January ruled the tax was “unreasonable” and threatened 100 percent duties on a potential list of $2.4 billion in French goods.

Vitor Gaspar, head of the IMF’s fiscal affairs department, told AFP on Friday that there is “a perception that firms that are extremely profitable, that act in the global sphere, are not paying their fair share of taxation,” and called for an international agreement.

“It’s very important to avoid trade wars, it’s very important to avoid tax wars,” Gaspar said in an interview.

A “cooperative approach is in the best interest of everybody,” he said, noting it would be “a signal of the capacity of the global community to work together if a deal on international corporate taxation would be struck.”

Matt Schruers, the president of the Computer and Communications Industry Association, welcomed the US move.

“Today’s action sends a strong message that discriminatory taxes aimed at US companies are not a path to modernising the global tax system,” Schruers said in a statement.

“Changes to international tax rules must be negotiated in good faith through a consensus-based approach at the OECD that addresses the changes of the digitalised global economy.”

Continue Reading

Mobiles

Apple Supplier Foxconn Said to Plan $1 Billion Investment in India

Avatar

Published

on

By Reuters | Updated: 11 July 2020

Foxconn plans to invest up to $1 billion (roughly Rs. 7,516 crores) to expand a factory in southern India where the Taiwanese contract manufacturer assembles Apple iPhones, two sources said.

The move, the scale of which has not previously been reported, is part of a quiet and gradual production shift by Apple away from China as it navigates disruptions from a trade war between Beijing and Washington and the coronavirus crisis.

“There’s a strong request from Apple to its clients to move part of the iPhone production out of China,” one of the sources with direct knowledge of the matter told Reuters.

Foxconn said it does not comment on matters related to customers, while Apple did not respond to a request for comment.

Foxconn’s planned investment in the Sriperumbur plant, where Apple’s iPhone XR is made some 50 km west of Chennai, will take place over the course of three years, the second source said.

Some of Apple’s other iPhones models, made by Foxconn in China, will be made at the plant, said both sources, who declined to be identified as the talks are private and details have yet to be finalised.

Taipei-headquartered Foxconn will add some 6,000 jobs at the Sriperumbur plant in Tamil Nadu state under the plan, one of the sources said. It also operates a separate plant in the southern Indian state of Andhra Pradesh, where it makes smartphones for China’s Xiaomi, among others.

Foxconn Chairman Liu Young-way last month said it would ramp up its investment in India, without giving details.

Status symbol
Apple accounts for about one percent of smartphone sales in India, the world’s second-biggest smartphone market, where its pricey iPhones are often seen as a status symbol.

Building more phones in India will also help Apple save on import taxes that further push up its prices.

Apple assembles a few models through Taiwan’s Wistron in the southern tech hub of Bengaluru. Wistron is also set to open a new plant, where it plans to make more Apple devices, Reuters previously reported.

“With India’s labour cheaper compared with China, and the gradual expansion of its supplier base here, Apple will be able to use the country as an export hub,” Neil Shah of Hong Kong-based tech researcher Counterpoint said.

India is also working to boost electronics manufacturing by firms such as Foxconn and last month launched a $6.65 billion plan, offering five global smartphone makers incentives to establish or expand domestic production.

Having Apple widen its local presence is likely to be a boost for Prime Minister Narendra Modi’s flagship “Make In India” drive, aimed at creating new jobs.

South Korea’s Samsung has already said it will make smartphones for export from its plant outside New Delhi.


© Thomson Reuters 2020

Continue Reading

Trending