China: Huawei and Trade Talks

Published on August 19, 2019

US Commerce Secretary Wilbur Ross confirmed today that limited permits for US rural carriers to use and for Google to sell their Android operating system updates to China’s Huawei Technologies would be extended for another 90-day period, to November 19.

*** That decision is an incremental step in averting further escalation, but little more than that, and was expected by Beijing. The 90-day extension will, as also expected, set the stage for another phone call between China’s Vice Premier Liu He, US Trade Representative Robert Lighthizer, and US Treasury Secretary Steven Mnuchin. Beyond that, however, sources in Beijing emphasize it will not change China’s negotiating position (see SGH 8/16/19, “China: Beijing’s Response to Trump”). ***

*** And with the larger threats from the US still hanging over the Chinese tech giant, the plan for Huawei, from what we understand, will be to continue to push full-bore towards self-reliance in core components, including in smart phone chips and development of an operating system (OS). Indeed, expectations are that over the next few months, Huawei will release two new variants of its to date delayed “Mate 30 Lite” phone. ***

One of the variants of the phone will be designed to be shipped with the Huawei HongMeng operating system for domestic markets, while the other will be shipped with an Android version for European and other international markets.

This is being lauded as the first use by Huawei of its own operating system in 5G mobile phones, and as such, a major technologic milestone. The goal, according to Chinese policymakers, is for the world to soon have a third operating system created by Huawei – the HongMeng (domestic), and Harmony (international) OS.

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