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Huawei Calls Charge of Unfair Government Help 'Hogwash'
itwbennett writes "Huawei's $30 billion credit line from the Chinese Development Bank gives it an unfair advantage over rivals, said U.S. Export-Import Bank Chairman and President Fred Hochberg in a speech Wednesday at the Center for American Progress in Washington, D.C. 'The reality is [that] opaque state-directed capital allows foreign governments to target their financing at specific sectors and companies, while aggressively grabbing market share in an attempt to dominate a market,' Hochberg said. Responding to the charges, a Huawei spokesman called the charge 'hogwash.'"
I don't see how a multibillion dollar government loan to Huawei is any different from a multibillion dollar government loan to Chevrolet. (Hey that rhymes!)
How is this in any way "news for nerds"? It isn't about science or technology, the internet, cell phones, computers, or anything else a nerd could relate to. How did this story make the front page????
Free Martian Whores!
It isn't about science or technology, the internet, cell phones
Huawei Technologies, with its very NBC peacock-looking logo, is a Shenzhen-based maker of telecommunications equipment. It makes cell phones and products related to Internet plumbing.
It seems timothy like to use slashdot as his own personal soapbox, and post all sorts of political drivel to drive up the pagehits and comments.
In particular, any issue regarding China vs. the US, no matter how minute or esoteric gets posted as news for nerds, when it so clearly is not in this case.
timothy should be fucking fired for such incompetence.
More common than you think!
n/t
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
protection of own telecommunication industry by governments. i am happy such a thing could never happen in Japan (yeah, sure, forbidding prepaid contracts and not doing anything against monopolistic business practices was just to protect the people from phone scams) or the US (accepting bundled phones as a standard pratice for sure is only for the convenience of the customers), Germany (Wasnt it practical to keep the landline network in the Hands of a former monopolist, which still offers services to the customers).
The simple reality is that telecommunication companies are usually among the biggest national companies throughout the world. They usually are *extremely* well connected into the government by lobbyists. And the pressure they can excert by saying "oh, we have to fire 10% of the employees then" is quite large, since they are usually well known.
ya sure can wash a lot of hogs with $30 billion!
I'm tired of the rhetoric presenting Chinese economic policy as inherently unethical. America has implemented excellent strategies for operating and integrating a government and an economy (at least when they work right), but that doesn't mean we possess moral authority on what's Right and what's Wrong in politics and finance.
These kind of connections between Chinese government and business aren't inherently wrong (or inherently right). They're just different. Murdering protestors and imprisoning reporters is wrong; beating the pants off the USA with a slightly different kind of capitalism is an ethical and moral non-issue.
The reality is [that] opaque state-directed capital allows foreign governments to target their financing at specific sectors and companies, while aggressively grabbing market share in an attempt to dominate a market.
This is not a repeat from the 1980s!
Government created economic bubbles, how do they work?
Chinese bubble pop is inevitable. Centralized planning doesn't work.
A fascist country (lol if you believe they're actually communist) engaging in unfair practices? Well, I never! Did someone expect investment and trade with this type of government to be fair? This is the cost of trade with non-democratic nations. Hell, it's the cost of trade with ANY nation. Everyone, ourselves included (auto industry, financial bailouts, etc.) is willing to unfairly spend money to get a leg up. Calling foul in this manner isn't any different. When the rules of the game you yourself wrote no longer favor you, you try to change the rules.
has anyone forgotten this, already? nokia getting a $EUR 500 million loan for "restructuring purposes"? and ST Thompson - the business cards of all employees at the ST Chip Foundry has the local university on one side and ST on the other: in this way, ST is able to bypass restrictions on EU Grants to "businesses only". so, yes, it's complete horse-shit for the U.S. Govt to be "complaining" about any funding or investment, when it happens the world over. oh - and have we forgotten the world-wide bank bailouts, already? effectively, *any* business loans prior to the outrageous and non-capitalistic bank bailouts could be classified as "Government Loans". several banks in the UK are now Goverment-owned for goodness sake!
Dont you like capitalism when it doesn't smile at you?
No matter how you slice it, it is nothing but statism everywhere, allowed to flourish due to general ignorance of the population.
I guess those public -- ahem, state -- education institution failed to produce critically-thinking individuals. Shocker, ain't it?
I'm beginning to wonder if the Americans are even capable of sounding a little more narcissistic and hypocritical?
All of this altruistic boy scout whimpering is making me feel overly warm and fuzzy.
International relations and international political economy isn't stuff nerds would find interesting and important? Guess I'm not a nerd then. Is there an address I can mail this card back to, or do I just cut it up and throw it away?
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
So governments want to protect the big companies in their countries? Why would that be a bad thing? You can argue that it prevents a true market from appearing but a true market is not necessarily good for every country.
Sometimes we need to think both globally and locally. It is important that China has good and big companies in every major area (one reason is to make sure know-how exists in the country). It is important that the US, Japan, Germany, UK, etc. also have. Locally, the cost of loosing knowledge (and independence in a way) is usually much greater to a country that simply handing over a few b$ once in a while. Also globally it makes sure we foster competition. We, the world, need the Boing vs Airbus vs all smaller ones competition even that is costs us money.
Please don't forget that our world is not globalized politically, socially or economically, so a pure, free market doesn't really exist (thankfully!)
Also, this doesn't mean governments should be freely handing over checks to big companies rewarding their incompetence. But sometimes they need too because the cost of failure is greater than the cost of the money. Citi is a good example. Now if governments really cared about taxpayer money, they should go after bad management -- after or even before bailouts -- but, hey, if they were good managers, politicians would never be politicians in the first place, right?
. . . from Cisco, a true-blue American company with $40 billion in offshore profits that will be used to expand, hire, and acquire outside of the United States in order to avoid U.S. income taxes.
Contrary to what is stated in many comments here, there is no loan to Huawei. The loan is to the customers of Huawei, the telecom operators. Here is how it works: Huawei sells equipment to the telecom operator. The Chinese Development Bank pays Huawei. The telecom operator pays back the loan to the Chinese Development Bank over many years at very favorable conditions. Telecom operators absolutely love this setup as they can buy equipment without putting cash on the table. This is a huge competitive advantage for Huawei, and it explains why Huawei has grown to be the #2 telecom vendor in the world (behind Ericsson) in a matter of years. None of the western vendors (Ericsson, Alcatel-Lucent, Nokia Siemens Networks, Cisco) can give similar financing conditions to the operators, and this is going to very effectively kill the European and North-American competitors of Huawei.
Also, Huawei did not have the same startup costs as other Telecom vendors, as part of their equipment is stolen from Nokia, Ericsson and Cisco.
If Nokia, Ericsson and Cisco can prove that their tech was misappropriated, then perhaps they should get Huawei's shipments stopped at the US and EU borders.
I understand that English is probably not the Huawei spokesperson's first language. But calling the claim that China's $60B government credit line is an unfair competition subsidy "hogwash" means that Huawei is denying that it is a subsidy, or that it exists. It exists, and it it is a subsidy. It's debatable how wrong or illegal it is. But it's is not "hogwash".
--
make install -not war
I don't understand why this is being discussed in terms of 'fairness' at all. Someone elaborate. This is a chinese company and the chinese gov't is not capitalist, so there is no requirement for them to give fukk all about fairness. They make their own rules in their own land and have every right to burn every competitor to the ground and leave huawei the last standing if they felt like it.
Huawei needs the help, I bought one of their tablets and returned it the following day, it was a total piece of crap
Snowden and Manning are heroes.
It's easier to just do it that way rather than make a law giving them the same effect but via tax cuts/subsidies.
I actually welcome this method and prefer it to the American/French systems of passing many laws to do the same thing but increase the amount of complexity and red tape in accounting.
Do you know how much work it is to know which government official to buy and which one to ignore? Do you know how much effort it is to keep the right ones happy, so they won't turn on you? Keeping the right ones in their pocket is full time work, and it is very hard work. Others are just envious because they paid off the wrong ones or can't afford to at all.
How ethical is that?
I'm pretty happy with my bottom end Huawei bar phone. Pretty well thought out (has the software drivers to interface with windoze via USB built in). A lot better than the LG phone I was using but to be fair it is newer. The best thing about it is it is a lot more in the realm of open standards so I can interface with it via linux and things aren't locked down in an innovation stifling way. Now if the software was all open-source/easier to update I could fix a few bugs and it would be perfect. (like getting the ssh to work, making the key lockout period work better, a bunch of minor stuff)
Stupidity is its own reward.
They've got a history of calling this kind of game around other countries, and turn around and doing it themselves.
Probably 100% of NAFTA legal claims -from- the USA could be considered as examples. Most particularly around softwood (the US doesn't have the infrastructure - or the timber anymore, so they sued my homeland) and tomatoes (a 10-year-old southern US failure against a 100+ year old British Columbian success)
I'll just assume it's more US protectionism. It usually is.
It's spelled "Hawaii", you morons.
Banks in India gave 84% of loans to http://en.wikipedia.org/wiki/Forward_caste community
It is globally admitted that China spies on the west in order to help their home grown industries. Huawei has been determined to be the beneficiary of spying by the Chines Govt dozens of times by western governments & corporations. Huawei & the Chinese Govt brush the claims off as false but you don't need to convict them in a court to see governments informally outlawing the use of Huawei on any secure networks. The pattern is quite clear & is a major factor in why no RFP that I have ever seen has ever accepted Huawei on any potentially sensitive networks. Governments in western Europe do not ban for no cause & corporations have taken note of the bans & now commonly refuse Huawei on their own nets for similar reasons.
China & Huawei can wail & gnash their teeth all they want but they've been caught with their hands in the cookie jar far to often for their declarations of innocence to be taken seriously anymore. China has thrown it's weight around enough (See their use of Rare-Earths to Japan) to dissuade anyone from publicly publishing their proof but just as China is standing behind the curtain claiming "You can't prove it" the west now generally says "we don't have to".
Democracy is a sheep and two wolves deciding what to have for lunch. Freedom is a well armed sheep contesting the issue
I remember Lee Iaccoca in the late 1980s going before Congress asking for tariffs against Japanese automobiles because, "It isn't fair. They [the Japanese] work harder [than Americans]." I was shocked and bewildered by his statement. Is he saying that working hard gives one an unfair advantage over the lazy? Is he telling Congress that Americans are lazy? How can that be an argument against anything?
When I see someone whining about things that are "not fair," I can't help but remember Iaccoca's plea.
These "unfair financing" advantages are usually irrelevant. Sure, companies take advantage of the cheap financing to save a few percent, but the cost of money is rarely an important factor in a product decision.
US and European airlines complain about Emirates getting cheap plane financing. But Emirates is just a better airline. European train companies complain about Bombardier's Canadian government financing. But their products are competitive.
The US Export-Import bank and the other OECD export financers do pretty much exactly what the Chinese bank does.
The real reason that Telcos are buying Huawei gear instead of Cisco gear isn't that they can finance the Huawei buy with slightly lower interest rates than those charged by their bank or the capital markets. It's that the Huawei gear is almost as good and 40% cheaper to begin with. Cisco has engineers in California, pays fat commissions to their sleazebag sales force, and has ridiculous margins based on their "trusted" brand. Huawei pays engineers in China peanuts to rip off Cisco designs, and lets the bargain-basement product sell itself.
The subdisy is there, but it's irrelevant. For one thing, every country benefits its exporters with cheap loans at the expense of domestic buyers (ask US airlines why they pay more for Boeings). And the slight differences in financing cost are usually dwarfed by fundamental differences in the products and pricing.