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China says that the US needs to fix ‘bad acts’ if the Huawei ban rattles supply chains

BEIJING (Reuters) – China said the United States needs to correct his “wrong actions” in order for the negotiations to continue after it on the black list Huawei, a blow that rippled through global supply chains and battered technology shares.

Japanese conglomerate Panasonic Corp in a growing list of global companies who are disengaging from Huawei Technologies Co Ltd, the world’s second-largest seller of smartphones and the largest telecom-gear maker, saying that it had stopped the transfer of a number of components.

The move came a day after the British chip designer ARM said that it had stopped relations with Huawei to comply with the U.S. supply blockage, potentially crippling the Chinese company the ability to introduce new chips for smartphones. Huawei makes use of ARM blueprints for the design of the processors that power its smartphones.

“If the United States wants to continue talks, they should show sincerity and correction of their wrong deeds. The negotiations can only proceed on the basis of equality and mutual respect,” Chinese Ministry of Commerce spokesman Gao Feng told a weekly briefing.

“We will closely follow relevant developments and prepare necessary responses,” he said, without specifying.

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The United States has accused Huawei of working for the Chinese government and the performance of activities contrary to the national security, the accusations Huawei denies.

The Trumpet administration softened its attitude somewhat this week by granting the company a license to buy AMERICAN goods to Aug. 19 to minimise disruption for customers.

‘FALSE STATEMENT’

However, the US Secretary of State Mike Pompeo kept the pressure against Huawei in an interview on CNBC Thursday, saying the founder and chief executive lied about his company’s ties with the Beijing government.

“That is simply untrue. To say that they don’t work with the Chinese government is a false statement. He is required by Chinese law to do that. The CEO of Huawei, at least, not tell the American people the truth, nor of the world,” Pompeo said.

FILE PHOTO: A man takes a photo of a Huawei logo on the Huawei European Cybersecurity Center in Brussels, Belgium, 21 May 2019. REUTERS/Francois Lenoir/File Photo

Pompeo said he expects other U.s. companies to cut ties with Huawei as the risk of doing business with and it is clear.

The japanese Toshiba Corp said it had resumed some shipments to Huawei after the temporary suspension of the shipments to verify that the supplied US-made components.

“What we are witnessing is a possible reconfiguration of the global trade has been since the second world War … investors should start to think about how sensitive their portfolio to the global supply chain is exposed to shocks,” Saxo Bank head of equity strategy, Peter Garnry, wrote in a note with the title “Are you ready for a cold war in tech?”

Huawei founder Ren Zhengfei told the Chinese financial magazine Caixin on Thursday that he was not ARM ‘ s decision to suspend of the business with Huawei have an impact on the company.

He said Huawei had a long-term agreement with ARM and speculated the British company had made such a move, since the parent, Japan’s SoftBank Group Corp, was waiting for US approval for the merger of Sprint Corp., which it owns, and T-Mobile US Inc.

Industry Experts have called on Huawei for its claims could ensure a stable supply chain without U.S. help, saying that the technology it buys from American companies would be “hard to replace.”

Slideshow (3 Images)

No further negotiations between the Chinese and AMERICAN negotiators have already been planned since the last round ended on May 10, when the AMERICAN President Donald Trump sharply hiked the rates on $ 200 billion worth of Chinese goods, and took steps to levy import duties on other Chinese imports.

China has retaliated with its own levies on imports from the US, but it was Washington, the move against Huawei, the trade war into a new phase, stoking the fears of the risks to the global growth and knocking the financial markets.

Reporting by Stella Qiu, Se Young Lee; Additional reporting by Doina Chiacu in Washington; Writing by Tony Munroe; Editing by Christopher Cushing, Nick Macfie and Bernadette Baum

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