Huawei is acting foolish. Huawei warned on Tuesday that 2020 would be its most difficult year yet due to American trade restrictions which dealt a blow to its overseas sales in 2019, and predicted the Chinese government would retaliate against the United States. The world’s largest maker of telecoms equipment issued the warning as it reported its weakest annual profit growth in three years. It said Beijing could hit back against U.S. measures to restrict chip sales to Huawei, by restricting sales of American products in China and by shifting to alternative suppliers in China and South Korea.
“The Chinese government will not just stand by and watch Huawei be slaughtered on the chopping board,” Chairman Eric Xu told reporters at the launch of Huawei’s annual report. “Why wouldn’t the Chinese government ban the use of 5G chips or 5G chip-powered base stations, smartphones and other smart devices provided by American companies, for cybersecurity reasons?” The United States alleges the Chinese government could use Huawei’s equipment to spy, an accusation rejected by the company. The US is really not worried about China threats.