- Washington labeled the Chinese telecom gear maker a security risk and put new restrictions on its U.S. business.
- Beijing called the move "the wrong approach" and said China will "take further necessary measures" to protect its companies.
- The escalating conflict over Huawei could further distance the U.S. and China as their trade dispute worsens.
Beijing - China vowed Thursday to "resolutely safeguard" Chinese companies after Washington labeled telecom equipment giant Huawei a security risk and imposed export curbs on U.S. technology sales to the company. Foreign Ministry spokesman Lu Kang criticized the moves as an "abuse of export control measures" after the Trump administration issued an order requiring Huawei to obtain government permission for purchases.
Huawei Technologies, the biggest global maker of switching equipment for phone companies, has spent a decade fighting accusations it facilitates Chinese spying. "We urge the United States to stop the wrong approach," said Lu. "China will take further necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises."
Lu gave no details, but analysts warned the export controls threaten to worsen a U.S.-Chinese conflict over technology and trade. The restriction is "a grave escalation with China that at minimum plunges the prospect of continued trade negotiations into doubt," said Eurasia Group analysts in a report.
"Unless handled carefully, this situation is likely to place U.S. and Chinese companies at new risk," the report said. Eurasia called the administration's decision a "potentially explosive act." It added that Mr. Trump's order "will be highly disruptive to US-China ties at a particularly delicate time in the relationship. China will view this as an openly hostile act and a major provocation."
In a new report, Raymond James & Associates similarly said: "The administration's actions likely invite retaliatory steps against U.S. companies operating in China, and further complicate the path to resolution of the trade dispute."
President Donald Trump also issued an executive order Wednesday that bans phone carriers from using technology of "foreign adversaries" deemed to pose "unacceptable risks" to national security. While the order doesn't name specific countries or companies, it follows months of U.S. pressure on Huawei. It gives the Commerce Department 150 days to come up with regulations.
Chinese Ministry of Commerce spokesman Gao Feng issued a similar warning about "necessary measures" at a separate news conference but also gave no details of possible official steps. Chinese retaliation against U.S. tariff hikes has included targeting American companies in China by slowing down customs clearance and issuance of business licenses.
Trump's order addresses U.S. government concerns that equipment from Chinese suppliers could pose an espionage threat to U.S. internet and telecommunications infrastructure. Huawei said blocking it from doing business in the U.S. would hamper introduction of next-generation communications technology in which the company is a world leader.
"We are ready and willing to engage with the U.S. government and come up with effective measures to ensure product security," Huawei said in a statement.