Chinese Tech Firms Band Together in Wake of American Action

After US President Donald Trump signed an executive order laying the groundwork to block Chinese telecommunications companies, namely Huawei, from selling equipment in the United States the international community took note. Global firms like Panasonic and ARM followed the lead of the Trump administration, scrutinizing their relationships with the Chinese telecommunications giant and in ARM’s case halting transactions completely. As global firms took action, rumors swirled that fellow Chinese tech giant Lenovo was also investigating ties with Huawei. Lenovo was quick to respond to allegations, stating that Huawei is an “important client” and that “supplies have not been cut off.”

By opting to operate against the international grain and continuing to supply Huawei, Lenovo has proven its ‘patriotism’ as a Chinese company. After a post on Chinese social-platform Zhihu questioning the patriotism and loyalty of Lenovo went viral the company was faced with pressure to respond to the allegations, stating the company will, “strictly abide by the laws and regulations of the countries and regions where it operates as a baseline, and continue to sell products and services to Huawei.”

As other companies investigate their relationships with Chinese tech giant Huawei, Lenovo has made the choice to stand by their fellow state-backed enterprise. From a business standpoint, this stance makes little sense, as Lenovo makes around 75% of sales outside of China. Lenovo also makes a third of their sales in the United States, making the West a major market for the world’s leading PC manufacturer. With such a reliance on Western markets, why would the world’s largest PC manufacturer ignore US action for the sake of a much smaller domestic client? The only answer is that the same hand controls both Lenovo and scandal-ridden Huawei – the Chinese Communist Party.