The US ‘audit war’ on Chinese companies; in-depth with Long Yongtu, China’s trade & WTO veteran

On Tuesday, China showed a confident tone in the face of new challenges from the United States for the technological development of the Middle Kingdom.

With ongoing trade tensions between the two countries, the administration of US President Donald Trump this year placed Chinese telecommunications giant Huawei – along with some supercomputer firms and some large artificial intelligence companies – on a blacklist. So-called «list of enterprises» effectively prevents these businesses from buying from their American suppliers.

«Overall (list) can not harm the foundations of China’s technological development», – said Huang Libin, spokesman and general director of the Verification and Coordination Bureau of the Ministry of Industry and Information Technology of China.

«In the face of the United States, under the guise of trade tensions that are creating a dire situation for our high-tech companies, we are confident that Chinese science and technology will be able to overcome the initial problems and overcome the bottleneck of current technological development.», – Huang said at a press conference.

Huang added that China will take steps to further open up telecommunications, the Internet and the automotive industry to foreign investment. He did not provide detailed information on the timing.

In May, the Chinese Ministry of Commerce announced that it could include foreign organizations in «list of untrustworthy organizations», but so far little is known about this list.

The latest US additions to the list of organizations appeared earlier this month. The list included 28 Chinese organizations, most notably public security services and security bureaus. The following companies are named: Hikvision, Iflytek, Megvii Technology, Sense Time, Dahua Technology, Xiamen Meiya Pico Information, Yitu Technologies, and Yixin Science and Technology.

«We urge the United States to respect reality, respect industries in both countries that seek to strengthen cooperation, respect multilateral trade rules, and act prudently, Huang said. – China will follow closely «list of subjects», take appropriate measures and vigorously defend China’s legitimate rights and interests».

One of China’s most preeminent technology events, the State-owned Worldwide Internet Conference took place this year amid growing friction and was particularly marred by Washington’s actions against Chinese tech companies..

In previous years, attendees included CEOs from Google and Apple Inc. In 2017, Apple CEO Tim Cook said at a conference that the company shares China’s vision of developing a digital economy for openness..

But this year’s three-day event, which ended on Tuesday, attracted few American luminaries and lacked the US-China panel as it did last year, reflecting escalating tensions between the United States and China..

In his opening remarks, China’s propaganda chief Huang Kunming set a general tone for the criticism, saying that the cyberspace industry is hindered by mentality «cold war» and «bully behavior», what became a barely disguised mockery of the United States.

«No sanctions or restrictions can hinder the development of China or the development of Chinese enterprises», – Yang Shuzhen, head of the China Cyberspace Research Academy, a government-backed think tank, told reporters at the conference.

«No country enterprise can cover all of the world’s technical patents, components and equipment. The irreversible trend is that all countries rely on the support of the global market», – he added.

Several attendees told Reuters what they see in the Chinese government’s efforts to allocate more resources to the tech sector to compete with the United States..

Beijing Says U.S. Blacklist Won't Hurt Chinese Technological Development

«Trade tensions have indeed affected our local traditional businesses, including the garment industry and fiberglass manufacturers, said a local government official, who declined to name him as he was not authorized to speak to the press. “ But we are doing everything we can to encourage high-tech businesses to start operating here, such as renewable energy vehicles and self-driving cars.».

However, many speakers, including Alibaba chairman Daniel Zhang and Microsoft executive vice president of artificial intelligence and research Harry Shum, avoided public comment. «list of enterprises» or other sensitive topics.

Huawei and Megvii were also among 15 companies awarded prizes by the conference organizers for innovation in new products, but there was no mention of the problems they might face as a result of being blacklisted by Washington..

«The problem is everyone avoids problems», – said one of the participants from the United States. – There is no frank discussion of the problems faced by foreign companies in China, or some of the larger problems related to Internet governance in China. Rather, it is technological boosterism».

Other conference participants discussed the problem of months of protests in Hong Kong.

Baidu CEO Robin Li was one of the few to briefly mention the protests in his speech. In his talk on artificial intelligence, he predicted that one day people will be able to use this technology to store their thoughts and communicate with people from the past..

According to him, among them may be the former top leader of China, Deng Xiaoping. Dan in 1984 and 1987 said that if Hong Kong «a mess», «the central government must intervene».

«We can also ask Mr. Deng Xiaoping what he thinks about the situation in Hong Kong today.», – said Lee.

Beijing Says U.S. Blacklist Won't Hurt Chinese Technological Development

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