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Countries divided on Huawei as US policy develops

As the U.S. government's strict trade restrictions on Huawei Technologies Co. Ltd. show signs of easing, the world is still in two minds about the Chinese technology equipment supplier.

The U.S. Commerce Department may decide next week whether to grant licenses to U.S. companies wanting to do business with Huawei, Secretary Wilbur Ross reportedly said. Earlier in July, Ross said the department will issue licenses to U.S. firms looking to sell components and parts to Huawei where the arrangement does not represent a U.S. national security threat, but added the Chinese telecom company remains under high scrutiny.

Meanwhile, the U.S. is to restart trade talks with China in September following after concluding "constructive" meetings in Shanghai on July 30 to July 31, according to a statement by the White House.

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While the U.S.-China trade war is now a few years old, security concerns around Huawei escalated in 2018 as executives including CFO Meng Wanzhou were arrested. President Donald Trump warned other countries not to do business with Huawei, accusing the company of espionage.

Major U.S. alliances in the Asia-Pacific region halted 5G deployments with Huawei as early as November 2018, according to media reports. Australia and New Zealand banned Huawei in 2018 from supplying equipment to government services and local carriers, citing security concerns. The Japanese government also decided to exclude Huawei from public procurement in 2018, and major carriers cut ties with Huawei. South Korea has not made its policies clear.

The European Commission has called for its member states to adopt a common approach towards Huawei and itself has not imposed restrictions on the company. Europe's largest markets — or its 'Big Five' — have yet to adopt a unified stance. Germany, Italy and Spain have so far not imposed restrictions, while France and the U.K. are still reviewing the claims against the Chinese telecom service provider.

In North America, Canada has not yet decided whether to place restrictions on using Huawei's products in 5G buildout. However, about 20 communities have reportedly partnered with Huawei to deploy high-speed internet.

China's allies Russia and North Korea are reportedly working with Huawei to deploy networks, while most countries in Southeast Asia, South Asia and Latin America have either included Huawei in their network development plans or are undecided.

Telecom equipment was Huawei's second-largest revenue source in the first half of 2019, at 146.5 billion Chinese yuan. It shipped over 150,000 telecom base stations and inked fifty 5G commercial contracts worldwide, the company said. Mobile phone sales were its largest source of revenue, at 220.8 billion yuan during the first half.

As of Aug. 1, US$1 was equivalent to 6.90 Chinese yuan.