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.'"

Comments

Then why wasn't the loan to GM unfair?

[tepples]

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!)

Re:It's not unethical, just different

[nedlohs]

Except it is not different.

The US Government handed a $30 billion credit line to Bear Stearns/JP Morgan Chase in 2008. The Penn Central Railroad and Lokheed bailouts were in 1970 and 1971, so it's been at least 30 years that the US has routinely been handing over loans and credit lines to companies. Sure to try and stop them failing, but clearly them failing benefits their competitors...

How financing works

[Shual]

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.

crap

[Lehk228]

Huawei needs the help, I bought one of their tablets and returned it the following day, it was a total piece of crap