The US government is contacting key allies to get them to persuade telecoms in their nations to avoid using equipment from China’s Huawei Technologies Co (華為), the Wall Street Journal reported.
US officials have reached out to counterparts and executives in nations including Germany, Italy and Japan about perceived cybersecurity risks, the Journal said, citing unidentified people familiar with the matter.
The US might boost aid for telecommunications development in nations that shun Huawei equipment, some of the people said.
Huawei has long been labeled a security risk by US lawmakers because of alleged links to the Chinese government, in part because it was founded by former military engineer Ren Zhengfei (任正非).
While the Shenzhen-based company has denied any inappropriate connections, it has been banned in Australia from supplying fifth-generation wireless equipment, faced scrutiny in Britain and found itself largely shut out from the US market.
Scrutiny of Huawei has increased since US President Donald Trump came to power as trade tensions between Washington and Beijing escalate.
The closely held company is now the world’s second-largest maker of smartphones and is one of the biggest producers of equipment for running telephone networks.
Huawei did not immediately respond to an e-mailed request for comment.
Asked for comment on the Journal report, Chinese Ministry of Foreign Affairs spokesman Geng Shuang (耿爽) yesterday said that China hoped the relevant nations could provide a fair environment for its companies, Reuters reported.
The spread on Huawei’s 3.25 percent US dollar bonds due in 2022 widened, with investors demanding the biggest yield premium since early July, according to data compiled by Bloomberg.
Analysts cited the story as adding to weak sentiment in Chinese and Hong Kong equity markets, which led regional losses.
US officials are concerned about the use of the Chinese equipment in nations that host US military bases such as Germany, Japan and Italy, the Journal reported.
There is concern about China’s ability to force companies to comply with government requests, it said.
A number of major telecoms directed more than 5 percent of their capital expenditure to Huawei, according to Bloomberg supply chain data.
That includes Telecom Italia SpA, and Japan’s NTT Docomo Inc and KDDI Corp, the data showed.
Huawei has been pouring billions of dollars into developing fifth-generation technology and its potential to become the global leader in the space is said to be a reason why Trump blocked the biggest ever chip deal earlier this year.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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