Survival goal. From world leader in mobile telephony to giant with feet of clay. What happens to Huawei, the Chinese telecommunications champion? The second quarter figures photograph a vertical drop in revenues: 168.2 billion yuan (about 26 billion dollars), compared to 271.8 billion a year ago (41 billion dollars).
It is the third quarter in a row that the company founded by Ren Zhengfei has experienced a decline in revenue. Thanks to the maximum pressure campaign that began with the Trump administration and continued with Joe Biden at the White House to ban Huawei from the 5G network and sensitive infrastructures on charges of spying on behalf of the Chinese government. Long-term sanctions have left their mark. So much so that Vice President Eric Xu was forced to admit: "Our aim now is to survive and do it sustainably."
The umpteenth tile in the Huawei home has fallen on the latest generation cellphones: they will not have incorporated 5G technology. "Due to US sanctions, our new smartphones cannot run on the 5G network even though we are certainly the global leaders in this technology," said Chief Executive Richard Yu. Ruined party: the new P50 and P50Pro are in fact the first smartphones of the Shenzen companion that will make use of the HarmonyOS operating system. They had to usher in the post-Android era: since the sanctions of the US Department of Commerce have come into force, the partnership between Huawei and the Google operating system has ended.
But mobile phones aren't the only trouble for the Chinese company. US pressure on allies to exclude Huawei from the 5G network continues. The latest blitz in South America, where Jair Bolsonaro's Brazil could put Beijing's technology at the door.
For the Biden administration, it's a race against time. The tender to assign the frequencies for the ultrafast network will be held by the end of August. It will not be easy to break the Brazilian government's special relationship with Xi Jinping's China. Already the Trump administration, in October 2020, had tried, unsuccessfully, to have Huawei removed from the network, promising in exchange a billion dollars for "rip and replace" (eliminate and replace) the equipment made in China.
In February, the national regulator, Anatel, had given the Chinese a green light to participate in the August race. And the massive dispatch of SinoPharm vaccines from Beijing was seen by several analysts as a counter-match for the tech story.
Now, however, the predictions could be reversed. Biden's National Security Advisor Jake Sullivan visited his Brazilian counterpart last week to talk about 5G. On the table there are incentives to abandon Huawei and the invitation to join the O-Ran (Open Radio Access Network), the modular market model with an open interface on which the US government is betting its chips.
From Beijing they are watching the developments with concern: losing Brazil would be a hard blow to swallow for Huawei, especially after the collapse in sales in the last six months. The Chinese embassy in Brasilia took the field to support the company, expressing "strong discontent" and "tenacious opposition" to American pressure.
The series of unfortunate events that Xi's hi-tech champion is stuck in doesn't end there. There are also legal troubles: the trial in Canada for the extradition to the United States of Meng Wanzhou, daughter of the founder Ren and financial director of Huawei arrested in Vancouvern in November 2018 on charges of money laundering and corruption is now in its final stages . The fate of Huawei's number two depends not only on the sentence, but also those of Michael Kovrig and Michael Spavor, Canadian researchers arrested in China two years ago on charges of espionage in an implicit retaliation against Justin Trudeau's government.
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