Huawei Calls Charge of Unfair Government Help 'Hogwash' 90
itwbennett writes "Huawei's $30 billion credit line from the Chinese Development Bank gives it an unfair advantage over rivals, said U.S. Export-Import Bank Chairman and President Fred Hochberg in a speech Wednesday at the Center for American Progress in Washington, D.C. 'The reality is [that] opaque state-directed capital allows foreign governments to target their financing at specific sectors and companies, while aggressively grabbing market share in an attempt to dominate a market,' Hochberg said. Responding to the charges, a Huawei spokesman called the charge 'hogwash.'"
Then why wasn't the loan to GM unfair? (Score:5, Insightful)
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Don't forget how they use the NSA to spy on foreign rivals during contract bidding (eg. Airbus vs. Boeing).
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Well, thank God and Congress, along with a certain past presidential administration, that China is a "Most Favored Trading Partner". It would suck if this kind of thing were done by an unfavored trading partner, right? It would REALLY suck if they weren't even a trading partner! *
* I can't believe I actually typed that all out with a straight face!
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Every country in the world that the US recognizes, with the exception of Cuba and North Korea (well, maybe Libya is back off the list too, I haven't checked) has that status. It's now called "Normal Trade Relations" though.
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Stop the "stolen" goods in customs (Score:2)
Also, Huawei did not have the same startup costs as other Telecom vendors, as part of their equipment is stolen from Nokia, Ericsson and Cisco.
If Nokia, Ericsson and Cisco can prove that their tech was misappropriated, then perhaps they should get Huawei's shipments stopped at the US and EU borders.
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Working as an african telecom consultant in the US I can agree with the parent that chinese manufactures often steal tech company's software and designs. Then they take those stolen products and use them in africa where no US company can do anything about it. It further drives home that we can't do anything about it since most of those "vendors" don't sell to the western world.
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The GM loans were meant to bridge GM in an economic crisis, and allow it to go through bankruptcy reorganization without having to layoff tens, if not hundreds of thousands of employees and allied tradespeople. The Huawei loan is for development, to expand into new business. Both are completely acceptable forms of industrial policy; the difference between China and the US is that China actually has an industrial policy and seems to make loans, grants and government procurement in a systematic way to favor
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More to the point, the GM loans were meant to prop up North American industrial capacity.
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If they aren't, then that's a good reason to give them loans. Why would you loan money to someone who's proven they can't manage themselves very well? That's like giving a house loan to an alcoholic or drug addict.
When you're loaning money out, you want to give it to people who are going to do good things with it, and give you a good return on your investment. You don't want to give it to someone who can't manage what they already have, and are going under because of their own incompetence. That's calle
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To be fair, it is different from the multi-trillion dollar loans effectively given to US banks by the Treasury via Quantitative Easing.
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It's OK when the US does it but not when the Chinese do it. Duh!
The Chinese are this season's French.
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Back when socialism wasn't a four letter word, it was commonplace for the US govt. to fund development in areas that were deemed strategic. Boeing benefit from billions in exploratory funding, as did Lockheed, Honeywell, and too many other companies to name.
Cisco, for example, exists because of federal research dollars into Darpa Net.
The US would do well to remember how we used to do it before China learned from us!
Maybe you've never heard of Huawei (Score:2)
It isn't about science or technology, the internet, cell phones
Huawei Technologies [wikipedia.org], with its very NBC peacock-looking logo, is a Shenzhen-based maker of telecommunications equipment. It makes cell phones and products related to Internet plumbing.
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Translation: Parent isn't nerdy enough to hang with us slashdotters.
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I assumed it was a tech company, but it isn't about the tech itself, it's about business and politics and would be the same if it was a diaper manufacturing company. Interesting to political junkies and MBAs. Just my opinion and not really germane to the topic so I modded myself down with the "no bonus" boxes (as with this comment). If I'd seen it before it was posted I'd have voted against it. But thank you for your reply.
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it's about business and politics and would be the same if it was a diaper manufacturing company.
But if it were a story about business and politics at Apple, Google, or Facebook, we'd be all over it. Likewise, we were all over the Foxconn suicides.
De-bonused as well.
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This is a big deal if it sticks. If governments are prevented from loaning money to big business, things will change signifigently.
Any number of products could become non-exportable (GM cars for example)
IR and IPE (Score:2)
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If the government would not take side we had no: space program, hence no telecom sattelites, no nuclear power plants, no wind power plants, no fiber glass communication, no health care, no catalytic converter in cars, no public transport in most cities ...
If I would live in a third world country, it was exactly what I would expect from the government: support the companies that can he
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The government's job is to protect the people. That's what the people create and maintain governments to do. Especially when a government fails to ensure the legal system works properly, the government sometimes needs to intervene in economic affairs in order to protect the people from the consequences. Especially when one administration fails catastrophically, the next administration that replaces it might have to intervene economically to protect the people.
Which is precisely what happened in the US, in i
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...Airbus... (Score:2)
n/t
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As if yanks didn't do the same with Boeing.
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Funny how the WTO doesn't agree....
Just earlier this year, the WTO expressly noted that the government loans given to Airbus were legal and proper, and the only thing that was the interest rate, which was to be raised. The loans themselves are not at issue any more - which Boeing was trying to have stopped.
What is also funny is this bloke takes issue with a Chinese company having a government credit line, when the U.S. Export-Import Bank is just that - a US government credit line to any business that wishe
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Actually they said the loans given 'did not constitute an illegal subsidy', and when dismissing the US claim regarding them noted 'loans and aid applicable to the claim as made have been found to be legal and proper, excepting the aforementioned requirement of adjustment on interest rates'. Their words. Asshole.
Allright, (Score:2)
protection of own telecommunication industry by governments. i am happy such a thing could never happen in Japan (yeah, sure, forbidding prepaid contracts and not doing anything against monopolistic business practices was just to protect the people from phone scams) or the US (accepting bundled phones as a standard pratice for sure is only for the convenience of the customers), Germany (Wasnt it practical to keep the landline network in the Hands of a former monopolist, which still offers services to the cu
It's not unethical, just different (Score:2)
These kind of connections between Chinese government and business aren't inherently wrong (or inherently right). They're just different. Murdering protestors and imprisoning reporter
Re:It's not unethical, just different (Score:5, Informative)
Except it is not different.
The US Government handed a $30 billion credit line to Bear Stearns/JP Morgan Chase in 2008. The Penn Central Railroad and Lokheed bailouts were in 1970 and 1971, so it's been at least 30 years that the US has routinely been handing over loans and credit lines to companies. Sure to try and stop them failing, but clearly them failing benefits their competitors...
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Your examples are really demonstration only that the US spent at least 37 years between those bailouts not "routinely handing over loans and credit lines to companies". You need continuous examples over that long period of time to show it's "routine". Indeed, their relative infrequency shows that they're extraordinary. Not that any are necessarily OK, but saying they're "routine" is not supported by what you show.
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Oh lets see... in my lifetime now...
Goverment bailouts....
1970 3.2 billion penn central railroad
1971 1.4 billion lockheed
1974 7.8 billion Franklin National Bank
1975 9.4 billion new york city
1980 4.0 billion Chrysler
1984 9.5 billion Continental Illinois National Bank and Trust Company
1989 293.3 billion Savings & Loan
2001 18.6 billion Airline industry
2008 30.0 billion bear sterns
2008 400 billion Fannie Mae / Freddie Mac
2008 180 billion American International Group (A.I.G.)
2008 25 billion G
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That is a good start, and sufficient to show it's routine.
FWIW, I'm no hypocrite. I don't defend most of those specific bailouts, especially the banks and aerospace ones, and also the way the railroad one neutered the railroad industry. The NYC bailout is almost entirely different - that's not a private subsidy, though it enabled the corporations that drove the bankruptcy to get even further from paying their way. Nor do I say that government subsidies to private interests, particularly strategic industries
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And even in the collective capacity, the US is not exactly a "hypocrite" - hypocrisy is a human characteristic, while groups of humans (governments, corporations) are always self-contradictory in rules of behavior.
I completely disagree.
When a person, who is a part of group A, criticizes group B for behavior X, and says this his group is better than group B because behavior X is bad/wrong/stupid, but then it's shown that group A in fact also does behavior X just as much or even worse than group B, that's hyp
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Sure, but you didn't completely disagree with me. Indeed, you explicitly completely agreed with me:
"in the collective capacity, the US is not exactly a "hypocrite""
"No, a group can't really be hypocritical"
[because]
"while groups of humans (governments, corporations) are always self-contradictory in rules of behavior"
"there's no such thing as a group of humans where they all agree on everything all the time."
I am not a flag-waver. I am not a hypocrite. Nor is the US, as a country is incapable of hypocrisy.
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China routinely prevents countries like the US from defending its domestic industries by insisting that government subsidies are unfair trade competition. Yet here China is doing precisely that, subsidizing Huawei to compete with foreign competition. It's an argument within the rules that China is using to make gains. It's within those rules that the argument is either wrong or right.
Or, rather, that the rules are wrong. I agree with the Chinese that it's OK to subsidize domestic companies in their foreign
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This is why the WTO should be abolished, and all talk of "unfair trade competition" should be ceased. If a country wants to give subsidies to certain industries, that's their right. It might not be good for people in another country, but that country may think it's better for themselves and their people, and that's all that's important. Similarly, countries that don't like this "unfair competition" are free to enact tariffs or other trade barriers to protect their own domestic industries and their own ci
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I tend to agree about the rules of the WTO, which should be abandoned because they're smokescreens that never enforce the actually mythical "free trade". But some world trade organization with rules is necessary. Because trade is most effective when conducted by consistent, well understood rules. However mutual they might be is up to the parties involved. The US operates under many rules these days that disadvantage both foreigners and Americans, because they advantage some rich Americans and some of their
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I disagree in principle. I think we should go back to the way things were 100+ years ago. If a country doesn't like certain things the US does, they should just erect some trade barriers/tariffs against the US.
Nearly every country is going to do things to advantage themselves over others. Why wouldn't they? If I'm the leader of country A, why should I put the desires of country B's citizens over my own? It's my citizens who elected me, not those other people. Or, if I'm the leader of corrupt country C
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I'm all for enforcing the effects of trade according to domestic policy by enforcing tariffs. But the more systematic trade rules are made globally, the more the trade is executed according to the values of what's traded, rather than according to how it's traded. Trade is not a matter of right, but what's best for consumers, producers, freighters, marketers, and the rest of the apparatus surrounding trade is for the rules to be consistent, not a special case for each country.
Not that any of this means that
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Trade is not a matter of right, but what's best for consumers, producers, freighters, marketers, and the rest of the apparatus surrounding trade is for the rules to be consistent, not a special case for each country.
It's the job of a country's government to decide what's best for the consumers, producers, freighters, marketers, and everyone else inside that country. Any dealings with consumers, producers, et al in other countries needs to be done according to agreements between the countries involves. Why
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Because without rules, and with less consistent rules, countries are disadvantaged in trade against other countries that have consistent rules. "Consistent" doesn't mean "one size fits all". And a country like the US is free to negotiate rules approved by its internal, elected organization: the Senate.
The problem is that Americans don't oversee our own political system properly. We don't primary candidates within the parties, we don't insist candidates face their records in general elections. Hell, we don't
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Because without rules, and with less consistent rules, countries are disadvantaged in trade against other countries that have consistent rules.
It's each country's responsibility to manage itself properly, and figure out how to manage its trade relations.
The problem is that Americans don't oversee our own political system properly. [snipped criticism of US electorate] The US can enact nearly any kind of trade rules it wants - and it does, because what "it wants" is what its plutocrats want. If Americans org
It's their own damn fault. (Score:2)
It is globally admitted that China spies on the west in order to help their home grown industries. Huawei has been determined to be the beneficiary of spying by the Chines Govt dozens of times by western governments & corporations. Huawei & the Chinese Govt brush the claims off as false but you don't need to convict them in a court to see governments informally outlawing the use of Huawei on any secure networks. The pattern is quite clear & is a major factor in why no RFP that I have ever seen h
Nokia's $500m loan from European Investment Bank (Score:3)
has anyone forgotten this, already? nokia getting a $EUR 500 million loan for "restructuring purposes"? and ST Thompson - the business cards of all employees at the ST Chip Foundry has the local university on one side and ST on the other: in this way, ST is able to bypass restrictions on EU Grants to "businesses only". so, yes, it's complete horse-shit for the U.S. Govt to be "complaining" about any funding or investment, when it happens the world over. oh - and have we forgotten the world-wide bank bailouts, already? effectively, *any* business loans prior to the outrageous and non-capitalistic bank bailouts could be classified as "Government Loans". several banks in the UK are now Goverment-owned for goodness sake!
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No, I don't. And I'm pretty well grown. Indeed, capitalism's other faces helped grow me up pretty fast.
And why is this bad? (Score:1)
So governments want to protect the big companies in their countries? Why would that be a bad thing? You can argue that it prevents a true market from appearing but a true market is not necessarily good for every country.
Sometimes we need to think both globally and locally. It is important that China has good and big companies in every major area (one reason is to make sure know-how exists in the country). It is important that the US, Japan, Germany, UK, etc. also have. Locally, the cost of loosing knowledge
Just the opposite . . . (Score:3)
How financing works (Score:4, Informative)
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If that's true, then Huawei's denial is the hogwash. It's a wordgame (and a shellgame with the money).
The correct response from the US is more demand-side financing guaranteed by the US government. Far better than all the supply-side giveaways that don't really grow market or efficiency, and clearly necessary given China's cash advantages.
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This is a good explanation of why these loans are bad.
$30 Billion is enough financing for Huawei to corner any market that they choose. That gives them too much power.
While the Chinese may have embraced capitalism (in the wake of the demise of the USSR), they certainly don't believe in free market economics, and will use whatever means they can to control and manipulate the markets.
You can boo hoo the US governments corporate bail outs all you want. But the bail outs were never intended to grab and
Not What "Hogwash" Means (Score:3)
I understand that English is probably not the Huawei spokesperson's first language. But calling the claim that China's $60B government credit line is an unfair competition subsidy "hogwash" means that Huawei is denying that it is a subsidy, or that it exists. It exists, and it it is a subsidy. It's debatable how wrong or illegal it is. But it's is not "hogwash".
fairness? (Score:1)
crap (Score:4, Funny)
I'm glad for the Cheap phone (Score:2)
I'm pretty happy with my bottom end Huawei bar phone. Pretty well thought out (has the software drivers to interface with windoze via USB built in). A lot better than the LG phone I was using but to be fair it is newer. The best thing about it is it is a lot more in the realm of open standards so I can interface with it via linux and things aren't locked down in an innovation stifling way. Now if the software was all open-source/easier to update I could fix a few bugs and it would be perfect. (like getting
old news... the US's behaviour (Score:1)
Probably 100% of NAFTA legal claims -from- the USA could be considered as examples. Most particularly around softwood (the US doesn't have the infrastructure - or the timber anymore, so they sued my homeland) and tomatoes (a 10-year-old southern US failure against a 100+ year old British Columbian success)
I'll just assume it's more US protectionism. It usually is.
In India (Score:1)
Banks in India gave 84% of loans [rbi.org.in] to http://en.wikipedia.org/wiki/Forward_caste [wikipedia.org] community
What is fair? (Score:2)
I remember Lee Iaccoca in the late 1980s going before Congress asking for tariffs against Japanese automobiles because, "It isn't fair. They [the Japanese] work harder [than Americans]." I was shocked and bewildered by his statement. Is he saying that working hard gives one an unfair advantage over the lazy? Is he telling Congress that Americans are lazy? How can that be an argument against anything?
When I see someone whining about things that are "not fair," I can't help but remember Iaccoca's plea.