What does Ms. Manh Van Chu's return do for Huawei?

When Chief Financial Officer Manh Van Chu was acquitted and returned home after a nearly three-year legal battle in Canada, the mood of Huawei employees and leaders also improved a lot.

Meng Wanzhou returned to China on September 25. (Photo: CNN)
Meng Wanzhou returned to China on September 25. (Photo: CNN)

However, this does not mean that Huaawei has been acquitted. The Chinese smartphone and networking equipment maker is still subject to US trade embargoes.

According to analysts, the ability of Washington to allow Huawei to re-import high-end chips is not clear yet, so in the coming time, the company tends to maintain investment in software and services, increase competition. competition on smartphones and lower profit margins.

Gary Ng, senior Asia-Pacific economist at investment bank Natixis, commented that smartphones used to be Huawei's "golden eggs", generating cash flow to support other businesses, but profitable. that's no longer the case. Huawei has no choice but to put its trust in software and cloud services, but cannot fully make up for the loss of the handset division.

The day after Ms. Meng returned home, Huawei held a small press conference to promote the application of 5G services in hospitals and ambulances, one of the areas Huawei is targeting. Chinese media broadcast the moment of her return live, peaking at nearly 100 million followers.

The deferred prosecution agreement between Ms. Meng and US prosecutors is conditional on her agreeing to a report, including that Ms. Meng provided "false statements" to HSBC about Huawei's dealings with Iran, and Huawei violated US sanctions in this Middle Eastern country. Ms. Manh pleaded not guilty to fraud and conspiracy to commit fraud. The charges will be dropped in December 2022 according to the agreement. The Justice Department also withdrew its request to extradite Ms. Meng to the US from Canada.

According to Li Yi, a researcher at the Shanghai Academy of Social Sciences, Meng's return could be seen as a sign of promise for Huawei. Although the US-China relationship cannot go back to the way it was before, it is entering a phase of normalization, subject to market and economic laws. Huawei should be seen as a casual business partner rather than a politicized symbol.

Meanwhile, telecommunications expert Xie Zhaohui said that the US ban on Huawei will soon have a new development and that the US and China may have drawn up a comprehensive plan before Meng's release. It could be a transaction like ZTE's, he added, to pay a fine to end the export ban for violating sanctions in Iran.

The US imposed an embargo on Huawei under former President Donald Trump amid heightened US-China trade tensions. President Joe Biden still maintained pressure on Chinese technology companies this year, so Huawei suffered heavy losses when it could not buy modern chips and chip manufacturing tools based on American technology.

Before the ban, Huawei sold network equipment to 45 of the world's top 50 carriers, serving a third of the planet's population. This is also the leading smartphone brand in China, beating foreign names such as Apple, Samsung and a series of domestic rivals such as Xiaomi, Vivo, Oppo, and Realme. However, in the second quarter, Huawei only accounted for 10% of the Chinese smartphone market share, down from 72% in the second quarter of 2020.

Last week, during an event in Beijing, Huawei's rotating chairman Eric Xu Zhijun said the US embargo cost the company at least $30 billion and it will take years to recover. However, with 200,000 Huawei employees, the return of the "Huawei daughter" is a great spiritual medicine.

Percy Liu, 27, shared that her WeChat light was on continuously on September 25 when news of Ms. Meng's release. Messages from colleagues expressing support for the 49-year-old leader. "My colleagues are constantly updating on the status of Ms. Meng's flight, speech and patriotism," she said.

Google Tech News - SCMP

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