Report hurts long-term trade prospects
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E-mail China Daily, October 22, 2012
"Clearly in a situation where you want to increase more jobs in the US, actions that will decrease the willingness of any investors, US or otherwise, isn't a good policy," Burns says.
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Since setting foot in the US in 1992, Huawei has built four research facilities and hired 1,700 workers. In the past five years, the company has invested about $500 million in its US operations.
Dan Steinbock, research director of international business at US-based India, China and America Institute, argues in an independent report on Huawei that the company's further expansion in the US could be seen as an opportunity for the US government, companies, innovation and consumers because it brings jobs, capital and tax revenues.
Steinbock thinks Huawei's major expansion in the US would most likely have a similar outcome to what happened when it entered Europe where the industry margins decreased significantly,
"Due to its competitive advantage - low-cost production, rising degree of innovation - Huawei can achieve more and greater innovation, with lower expenditures. In the US, Huawei's major expansion would most likely have a similar outcome," Steinbock says.
"That is of great concern to Huawei's rivals in the US, including Cisco; but it would benefit US consumers," he says.
The Chinese giant's main US rival, Cisco Systems Inc, which recently cut business ties with ZTE, has created a marketing document that's circulating in the telecommunications industry, the Washington Post reported on Oct 10.
According to the newspaper, Cisco's document says "fear of Huawei spreads globally". "Despite denials, Huawei has struggled to de-link itself from China's People's Liberation Army and the Chinese government," it adds.
Burns, the Washington lawyer, says, "It's really a 'tinfoil hat' theory that has been floating around: If the Chinese are doing it, why not the English or the French? Why not accuse other foreign companies we deal with of posing a security threat?"
Despite the congressional committee's call to block the two Chinese companies from expanding in the US market, the rest of world has welcomed them.
