The Sino-US trade war is hurting companies on both sides of the conflict. In early January, the US stock market dropped sharply after Apple issued its first revenue warning in 16 years, citing weak sales in China. Several weeks later, chipmaker Nvidia cut its quarterly revenue expectations by $500 million for the same reason. A survey last year by the US-China Business Council showed that 28 percent of US companies reported increased scrutiny from Chinese regulators because of trade friction. Even American cherry growers are being affected, losing $89 million in sales last year.
Zhou Hanhua is vice president of the Law institute at the Chinese Academy of Social Sciences.
Meanwhile Huawei, a Chinese supplier of telecommunications equipment, has become the target of a US campaign to bar its gear from many global markets. Huawei has invested heavily in 5G, the fifth-generation wireless technology that will connect self-driving cars and other complex digital systems to the internet. Washington says putting Huawei gear into these systems would create a national security threat because the Chinese government could use Huawei gear to eavesdrop or launch a cyberattack. It has barred Huawei from selling to large US telecom operators and is pressuring its allies to exclude the company’s equipment from their 5G networks.
Huawei has consistently denied that it threatens anyone. In the company’s 30-year history, no evidence has ever shown its gear to be less secure than equipment made by Ericsson, Nokia, or Samsung. Huawei’s founder, Ren Zhengfei, recently told a roomful of reporters that the Chinese government had never asked him to put spyware in Huawei’s equipment and that he would rather shut the company down than comply with any such request.
Huawei’s opponents say that regardless of its intentions, Chinese law would force the company to insert backdoors in its network gear if the government ordered it to do so. To support this claim, they cite an Intelligence Law passed by China’s legislature, the National People’s Congress, in June 2017.
But attorneys from Clifford Chance, a global law firm headquartered in London, have a different perspective. Asked to review an analysis of the Intelligence Law done last year by Zhong Lun, an international law firm in Beijing, Clifford Chance attorneys independently assessed Zhong Lun’s analysis of Chinese laws governing counterespionage, anti-terrorism, cybersecurity, and national intelligence.