The Global Times, an “indirect mouthpiece” for Chinese leaders is reporting today that the government is “ready” to take countermeasures steps against Apple and others due to the treatment that Washington has given Huawei, as per the Times:
China is ready to take a series of countermeasures against a US plan to block shipments of semiconductors to Chinese telecom firm Huawei, including putting US companies on an “unreliable entity list,” launching investigations and imposing restrictions on US companies such as Apple and suspending the purchase of Boeing airplanes, a source close to the Chinese government told the Global Times.
The report directly states the treatment that the President Trump administration has shown Huawei, saying its blockage of semiconductors shipments will result in “full force” being taken:
The Trump administration on Friday moved to block shipments of semiconductors to Huawei from global chipmakers. The US Commerce Department said it was amending an export rule and the Entity List to “strategically target Huawei’s acquisition of semiconductors that are the direct product of certain US software and technology,” according to a statement on its website.
“China will take forceful countermeasures to protect its own legitimate rights,” if the US moves forward with the plan to bar essential suppliers of chips, including Taiwan-based TSMC, from selling chips to the Chinese tech giant, the source told the Global Times in an exclusive interview.
The Times cites sources in the Chinese government saying that it has multiple options for how to move forward, from legal, and economic punishments “according to Chinese laws,”
The measures include adding related US companies to China’s “unreliable entity list,” imposing restrictions on or launching investigations into US companies like Qualcomm, Cisco and Apple according to Chinese laws and regulations like Cybersecurity Review Measures and Anti-monopoly Law, and suspending airplane purchases from Boeing, said the source.
The report echoes Apple’s heavy reliance on the Chinese market, threatening to use its dependence as a political and economic tool to benefit a government-owned and ran company, Huawei. The Chinese Ministry of Commerce may place Apple on the “unreliable entity list,” which it says it a list of companies and/or organizations “that seriously undermine the legitimate interests of Chinese companies.”
The unreliable entity list will include foreign organizations, individuals and companies that block or shut supply chains, or take discriminatory measures for non-commercial reasons, and when their actions endanger the business of Chinese companies as well as global consumers and companies, MOFCOM spokesperson Gao Feng told a press conference in 2019.
Apple’s feud with China has also come indirectly via the White House negotiations over a trade deal with the country. Tariffs put in place by the Trump administration have angered Chinese leaders, risking a fallout with Apple. CEO Tim Cook has stepped in, only recently getting Apple an exemption for certain products from these tariffs.
The remarks today from a state-run paper citing government sources marks a pivotal escalation in China’s view towards Apple. Although unfair, it does highlight the position Apple has placed itself in by pouring millions in the Chinese economy, without a proper escape plan in case of a fallout.