China warns big tech firms against cooperating with the US ban

Companies that comply with the US sanctions against Huawei could face 'dire consequences', warn Chinese officials

Chinese government officials have warned US technology companies of "serious consequences" for compliance with the Trump administration's sanctions against Huawei.

According to a report by The New York Times, the representatives of several US tech firms were summoned last week in a series of meetings in China. The representatives were told that Trump administration's decision to cut off Chinese companies from American technology had upset the global supply chain and that the companies complying with the policy could face dire consequence.

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The meetings were held by the members of Chinese National Development and Reform Commission and the Ministry of Commerce and Ministry of Industry and Information Technology. Executives from the world's major technology and semiconductor firms, including SK Hynix of South Korea and the semiconductor makers ARM of Britain were present in those meetings, the Times claimed, citing two people familiar with the matter.

The move follows a recent warning by Chinese officials that the country's government was setting up a blacklist of "unreliable entities" in retaliation for the US action against Huawei. The blacklist would be similar to the US 'Entity List' of companies that US companies must seek a licence before supplying.

Last month, the Trump administration announced its decision to include telecoms equipment maker Huawei on the US Entity List over national security concerns. The decision resulted in Huawei being cut off from the sales of US technology, on which it depends for key parts of its products, threatening the company's global ambitions.

The ban was later relaxed for a period of 90 days, giving US smartphone makers, internet service providers and other companies that do business with Huawei three more months to make alternative arrangements.

The New York Times notes that a permanent ban on Huawei (or other Chinese companies) could interfere with the long-term technology plans of China. Chinese officials have warned US companies against shifting their production lines from China to other countries - even as Chinese companies move production to Bangladesh and Vietnam - and have also asked them to raise their voices in opposition against the US government's recent policies.

Non-American firms have been told that they won't be punished by China's government if they continued to supply technology to Chinese firms.

Last week, Facebook announced its decision to cut off Huawei from its social networking app in order to comply with the US policies. Google made a similar decision last month.

Huawei argues that the allegations of trade theft and national security complaints are simply US excuses to prevent the Chinese company from becoming more powerful. It claims that it is part of a conspiracy to disrupt China's efforts to launch superfast, next-generation 5G technology in the coming months.

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