The United States has recently taken steps to reduce China’s dominance in the technology sector by revoking certain licenses that allowed the sale of chips to Shenzhen-based Huawei. The specific licenses that have been revoked were not detailed by the US Department of Commerce. This decision is part of the US’s ongoing evaluation of how to protect its national security interests in the face of a rapidly evolving digital threat landscape.
In 2019, Huawei was added to an “entity list” due to concerns about its ties to the Chinese military. Despite facing stringent trade regulations, Huawei has shown resilience, particularly in its consumer business. The recent launch of the Mate 60 Pro, which uses chips from top Chinese chipmaker SMIC, has contributed to the company’s global success.
While Huawei may not be among the top five smartphone brands for global shipments, the company saw a significant 70% year-on-year increase in shipments in mainland China in Q1 2024. This rise in market share highlights the diverse digital landscape in China, with OPPO, HONOR, vivo, and Apple each accounting for between 15-16% of the market.
The US government’s actions, including the recent legislation signed by President Biden that could potentially lead to a ban on TikTok unless it separates from its Chinese parent company, reflect escalating tensions between the two nations. The intertwined economic and geopolitical interests have become increasingly apparent in recent years, prompting the implementation of restrictions. However, the slow development of these bans has allowed both sides time to adjust, leading to limited effectiveness.
