China Tells U.S. to Stop ‘Unreasonable Crackdown’ on Huawei

huawei phones
(Bloomberg Photo/Krisztian Bocsi)

China’s government called on Washington on Tuesday to “stop the unreasonable crackdown” on Huawei following the tech giant’s indictment in the U.S. on charges of stealing technology and violating sanctions on Iran.

Beijing will “firmly defend” its companies, the Foreign Ministry said in a statement read on state-run media. It gave no indication whether Beijing might retaliate for the charges against Huawei, China’s first global tech brand and the biggest maker of network switching gear used by phone and internet companies.

Huawei Technologies Ltd. denied committing any of the violations cited in Monday’s indictment, the most serious escalation yet of pressure on Huawei, which has spent a decade battling U.S. accusations that it is a front for Chinese spying and a security risk.

The Foreign Ministry complained that Washington has “mobilized state power” to hurt Chinese companies “in an attempt to strangle fair and just operations” for political reasons.

“We strongly urge the United States to stop the unreasonable crackdown on Chinese companies including Huawei,” the ministry statement said. It said Beijing will defend the “lawful rights and interests of Chinese companies” but gave no details.

The charges unsealed Monday accused Huawei of trying to take a piece of a robot and steal other technology from a T-Mobile lab that was used to test smartphones.

Huawei also is charged with using a Hong Kong front company, Skycom, to trade with Iran in violation of U.S. trade controls. Prosecuters allege the company’s chief financial officer, Meng Wanzhou, lied to banks about those dealings.

Meng, the daughter of Huawei founder Ren Zhengfei, was arrested Dec. 1 in Vancouver, Canada, on U.S. charges related to Iran, a development that set off a political firestorm between China and Canada.

“The company denies that it or its subsidiary or affiliate have committed any of the asserted violations of U.S. law set forth in each of the indictments,” a Huawei statement said.

Huawei is “not aware of any wrongdoing by Ms. Meng, and believes the U.S. courts will ultimately reach the same conclusion,” it said.

There was no allegation Huawei was working at the Chinese government’s direction. The U.S. government previously has accused Beijing of involvement in cyberspying and theft of industrial secrets. It has charged several Chinese hackers and intelligence officials.

Huawei said U.S. prosecutors rejected a request to discuss the investigation following Meng’s arrest. It also noted that the allegations in the trade-secrets charge were the subject of a U.S. civil lawsuit that already has been settled.

Meng is out on bail in Vancouver and is due in court Tuesday as she awaits extradition proceedings. Her case has set off diplomatic spats between the United States, China and Canada.

The latest charges could dim prospects for U.S.-Chinese trade talks due to start Wednesday in Washington.

President Donald Trump and his Chinese counterpart, Xi Jinping, agreed Dec. 1 to put off any further sanctions against each other’s exports while they negotiated. A breakdown in negotiations would likely lead to higher tariffs, a prospect that has rattled financial markets for months.

While U.S. authorities stress that courts are independent, “ordinary Chinese people all believe it is a deliberate crackdown on Huawei,” said Lu Feng, an economist at Peking University.

“From the U.S. perspective, it is a law enforcement issue, but from China’s viewpoint, it has a link to Chinese-U.S. trade relations,” said Lu. “The difference in understanding will bring about complicated problems.”

The Justice Department officials provided details from a 10-count grand jury indictment in Seattle, and a separate 13-count case from prosecutors in New York.

The Seattle charges allege that beginning in 2012, Huawei plotted to steal information about T-Mobile’s robot, known as “Tappy.” It says Huawei engineers secretly took photos of the robot, measured it and tried to steal part of it from T-Mobile’s lab, according to prosecutors. T-Mobile declined to comment.

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