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Chinese telecommunications giant Huawei is shifting its expansion efforts towards Europe and Asia as trade tensions escalate between the US and China and it's being squeezed out of American markets.
China's Huawei is pivoting towards Europe and Asia because the US is getting harder to enter.
KEVIN HO, PRESIDENT HUAWEI HANDSET PRODUCT LINE "The European area is the top number one area we will focus on this year. And number two, as I mentioned about in the Asia Pacific, some countries, we are still very low market share, we will pay more attention this year, to improve our products, to improve our marketing, and also to improve our investments."
The technology that gets Huawei in trouble is the next-generation 5G network. As the world's largest supplier of network equipment, Huawei is pouring hundreds of millions of US dollars into the sector.
That's because 5G is the basis for an array of emerging technologies based on artificial intelligence – including self-driving vehicles, robots and other machines that transmit vast amounts of data in real time.
China's government is also backing Chinese tech firms in developing the technology to win a race of artificial intelligence globally.
Washington sees that as a particular threat.
The US Federal Communications Commission voted 5-0 on Tuesday in favour of a draft order banning federal funds from being spent purchasing goods or services from companies deemed a risk to American national security.
Huawei and Chinese rival ZTE were both cited as possible threats in the order.
JOSEPHINE WOLFF, PROFESSOR ROCHESTER INSTITUTE OF TECHNOLOGY "That sense that China is cultivating national champions, and cultivating companies within its own borders at the expense of other companies has a lot of US companies concerned about how much their intellectual property rights will be safeguarded there."
Officials say Huawei's network equipment could be used to collect sensitive information. But experts suspect security concerns are merely a pretext for protectionism in the middle of the rising trade tensions.
JOSEPHINE WOLFF, PROFESSOR ROCHESTER INSTITUTE OF TECHNOLOGY "What we've seen so far has not suggested there's a lot of concrete evidence that Huawei poses a national security threat to the United States, which leads a lot of people to believe that this is more about trying to protect the US tech sector then it is about trying to protect our national security."
Right now, Huawei is mostly looking at the consumer side of business in the US.
JIM XU, VP HUAWEI CONSUMER BUSINESS GROUP "We still, we are investing in the United States, it's a huge market, huge market. Maybe in operator side, we met some difficulties, but for open market, we still invest."
American companies have long complained that Chinese regulations require them to operate through local partners and share technology with potential competitors in exchange for market access. And that is also where we see the most feuding in the ongoing trade bickering between China and the US. But, analysts believe that efforts to impede Huawei in the US are unlikely to stop its rapid expansion globally. Huawei profits rose 28.1 percent in 2017, boosted by strong enterprise and consumer sales and booming business overseas.