We firmly embrace global supply chains. We welcome US companies to increase their supplies to Huawei, and will use their supplies wherever possible. This will ensure shared success between Huawei and US companies. If US companies are not allowed to supply their products to us, we have our alternatives. If those alternatives become mature and stable, I don't think it's very likely that we will go back to US companies.
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Well, since day one, we have always been a strong supporter of globalization in our operations, so that we can serve the global community by collaborating across the global value chain. A long time ago, however, we realized that there would be all kinds of uncertainties and conflicts between the US and Huawei. We needed to be prepared, so that we wouldn't collapse and could be self-reliant when the US chose not to sell to us. Today, I can say that it won't be a problem for us to survive short term, but I'm concerned whether we will still be a global leader in three to five years. We will delve deep into this topic, and it has become part of our agenda.
When President Biden released the first part of his infrastructure proposal, focusing on international domestic supply chains, he has one section there about electric vehicles. In the White House fact sheet, it says the plan "will enable automakers to spur domestic supply chains from raw materials to parts, retool factories to compete globally, and support American workers to make batteries and EVs." This is the type of policy that we should all want to get behind, broadened out to every industry, not just to a select few. But the question here, though, is whether the administration is willing to accept what is going to be necessary in order to achieve this goal to have these secure supply chains, especially when it comes to expanding our domestic supply of raw materials. It is going to require approval of mining projects, and that has been a challenge for us. That has been a challenge for us.
To a certain extent, what we’ve learned from nearly three years now of the global pandemic is the over reliance that some of us have had on supply chains from China in critical materials, critical for the functioning of our economy or for the industrial enterprises of our most competitive industries. So I think there’s been a major movement to try to make sure that we control our own [supply chains] in certain industries, [so] we have greater access and more reliability about supply chains. This is not just a lesson that we’ve learned; the Europeans [and] Japanese have learned this. You’ve seen movement around the world to make sure that, in a crisis, you control your destiny, and you control your own fate, so your economy can continue to perform at a high level, and you’re not at the mercy of an autocratic power that might deny you critical materials. So, that’s a lesson we’ve learned, and you’ve heard our President, other senior members of our government and many members of the business community talk about that.
Huawei has no access to the data and we don't need the data. So from this point of view, what the US has been saying just doesn't hold up. It's like trucks. Trucks can be used to do bad things. What to transport in a truck is up to the driver, not the truck maker. You can't blame the truck maker for any bad things that are done using the truck. The same applies to us. We are like a truck maker.
UPS are replacing fixed daily routes with dynamic ones adjusted in real time for weather and traffic — again with machine learning. Only cognitive technologies can handle all the necessary data. And at some point supply chains may be powered by autonomously driven trucks, which will bring enormous changes to that domain.
China firmly opposes the US’s overstretching of the national security concept and abuse of export control measures to wantonly hobble Chinese enterprises. The global industrial and supply chains come into shape as a result of both the law of the market and the choices of businesses. Arbitrarily placing curbs for political purposes destabilizes the supply and industrial chains, hurts others and backfires on oneself. It will only further weaken the already fragile world economy.
Coming back to the trade challenges... We're seeing in the data that trade is simply being re-routed... from countries like Vietnam and Mexico, but... the ultimate demand and suppliers for that is... still the U.S. and China. It's... taking a longer route... that's going to increase trade cost, and... some Chinese companies... have also set up factories in Mexico and... Vietnam to... circumvent some of these... trade barriers, but it still has to come ultimately from countries like the U.S. and China.
At that time, most local Chinese companies were not thinking about cost structures and supply chain issues as actively as we were. They were thinking more about how to lower the import tariff or how to counteract foreign exchange risks and so on. But we really spent a lot of effort on our supply system.
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The US has been unable to imagine a better future that goes beyond four plus one G, where they have been unable to imagine what 5G has to offer. They are clearly jealous that a Chinese company called Huawei has outstripped them and because they have been outstripped, they must now punish that one company. We cannot afford to have our own economy being held back because there is this fight that the US is having.
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