The United States authorities amended a prohibition on U.S. companies doing business with China’s Huawei to allow them to work together on setting standards for next-generation 5G networks. The U.S. Commerce Department and other agencies signed off on the rule change, which was published in the Federal Register. “The United States will not cede leadership in global innovation,” U.S. Commerce Secretary Wilbur Ross said. “The Department is committed to protecting U.S. national security and foreign policy interests by encouraging U.S. industry to fully engage and advocate for U.S. technologies to become international standards.” The Commerce Department noted that U.S. participation in standards-setting “influences the future of 5G, autonomous vehicles, artificial intelligence and other cutting-edge technologies.” 5G networks are expected to power everything from high-speed video transmissions to self-driving cars.

Analysts observed this did not signify an easing of the U.S. assault on Huawei. Last year, the United States placed Huawei on the Commerce Department’s so-called entity list, which restricted sales of U.S. goods and technology to the company, citing national security. Industry and government officials said the Huawei entity listing put the United States at a disadvantage in standards settings. The new rule came in response to concerns from U.S. companies and lawmakers. “Confusion stemming from the May 2019 entity list update had inadvertently sidelined U.S. companies from some technical standards conversations, putting them at a strategic disadvantage,” said Naomi Wilson, Senior Director of Policy for Asia at the Information Technology Industry Council, as reported by the Shanghai Daily.
“This is not a friendly gesture by the U.S., but simply a reflection on its part that it is too late and too expensive for any country to develop its own 5G standard,” Jefferies Equity Analyst Edison Lee said. He added that feedback from U.S. tech companies likely convinced the Trump administration that it is not realistic for the U.S. to create its own version of 5G. Large U.S. firms, including Intel Corp and Qualcomm, have already contributed plenty to 5G standards under the 3rd Generation Partnership Project (3GPP). In a statement, Huawei said it wants “to continue holding sincere discussions in relation to standards for new technologies with our counterparts, including those in the U.S.”, the South China Morning Post adds.

The Global Times reported that on a global basis, Huawei has the highest number of declared 5G patents at 2,386 patent families, followed by LG with 1,388 patent families and Samsung with 1,353 patent families, according to GreyB Services and Amplified AI. Huawei overtook Samsung to become the world’s largest smartphone maker in April, despite the double challenges of the U.S. government’s tightened restrictions and the Covid-19 outbreak’s economic fallout. Huawei accounted for 21% of the global smartphone market in April, thanks to reviving smartphone shipments in China. In comparison, Samsung saw its market share stand at 19%, amid Covid-19-related lockdowns in markets such as India, according to market research company Counterpoint. This is the first time Huawei has surpassed Samsung, after the company expressed in 2016 its aim to be the world’s No 1 smartphone maker within five years.

Experts said Huawei’s ascent against all the odds reflects the company’s popularity among Chinese consumers, but challenges still exist for its overseas businesses. It remains to be seen whether Huawei can occupy the top spot for the upcoming months, they said. Peter Richardson, Vice President and Research Director of Tech Strategies at Counterpoint, said, “Huawei is leading the China market, which started to recover relatively quickly at almost the same time when many other markets around the world underwent lockdowns,” the China Daily added. It is worth noting that China’s smartphone market failed to maintain strong growth momentum in May. The latest data from the China Academy of Information and Communications Technology, a government think tank, showed that over 32.66 million smartphones were shipped out of factories to retailers in China in May, a year-on-year decline of 10.4%.

Meanwhile, the lawyers of Huawei Chief Financial Officer Meng Wanzhou raised new arguments in her extradition case before Canadian courts. A PowerPoint presentation that Meng gave to an HSBC banker in Hong Kong in 2013 has been cited as key evidence against her. In that presentation, Meng said that Skycom Tech Co – a firm that operated in Iran and was subject to U.S. sanctions – was “a business partner of Huawei,” while the United States has described it as an unofficial subsidiary. Meng’s lawyers argued the prosecutors omitted key disclosures Meng made in the presentation, thereby presenting a misleading picture. The lawyers also said that a USD900 million credit facility that the U.S. said HSBC had extended to Huawei did not exist. Rather Huawei was in a USD1.6 billion credit arrangement with 26 banks, and HSBC’s total contribution was limited to USD80 million, they argued.

New documents also show that Canada’s spy services worked together with the FBI prior to Meng’s arrest at on December 1, 2018, which indicated that the case was political rather than legal, violating Meng’s rights and invalidating the U.S. extradition case, the lawyers argued.