Despite heavy sanctions on Huawei, China prefers keeping it low

With the start of this week, the President of the United States, Donald Trump decided to cut down on global supplies of Chinese telecommunication group, Huawei. The US government has already targeted some of the largest tech companies of China by signing executive orders relating major start up’s of the Asian powerhouse and now with restraint on Huawei, the US is serving serious threats to China.

But even after such strong measures by the US, China is reluctant to take any harsh step as they fear that it may lead to more damage. Experts believe that if they retaliate against America’s actions then China will lose out on innovations and technology that the west brings to the Asian country. Sean Ding, an analyst at research firm Plenum also confirmed that this is how China can think of tackling the measures enforced by the US government so that it keeps the foreign investors and companies to its land.

It is not like China did not try to get the better of the US. It just failed to materialize its objectives. In 2019, China had troubled investors when it announced that it will be drawing a ‘non-reliable entity list’ which meant that there might be penalties on companies or investors that do not support the interests of China. Unfortunately, this did not work out.

China has always been a huge market for US companies. Be it tech groups or the automobile industry, China has always been a revenue generator for US companies. American setups like Starbucks or Nike also depend on China for one-tenth of its sales. But despite that, these companies have been immune to any penalties or orders issued by Xi Jinping’s government.

For China, Huawei is far more important than start up’s like ByteDance and Tencent considering the fact that China currently is highly invested in developing its 5G technology and cannot afford to leave loose ends here. So, the American sanctions on telecom giants are a direct provocation for the country.

Mei Xinyu, a researcher affiliated with China’s commerce ministry agrees that despite such crude behavior toward the country, the best option for China remains to not retaliate as even now, China depends a lot on the US supplies and with all that the Asian country is doing, it will not be advised to compromise of such technology.

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