Thursday, October 15, 2020

Huawei Leads in Africa

 The Center for American Progress published on 14 October 2020 a study titled "There Is a Solution to the Huawei Challenge" by Melanie Hart and Jordan Link.  

Chinese telecommunications company Huawei is on track to become the world's largest 5G mobile network equipment supplier.  There are only four major vendors to choose from, none of which is a U.S. company.  Beijing uses powerful industrial policies to make Huawei equipment cheaper to deploy than the three alternative companies--Ericsson, Nokia, and Samsung.

China provides direct and indirect subsidies that reduce Huawei's operational costs, speed time to market for Huawei's products, and allow it to price its products well below prices set by its competitors.  Chinese state banks provide generous financing to Huawei's customers on terms most commercial banks cannot match, making Huawei equipment cheaper to use at any price.  Chinese officials interfere in the standardization process at the International Telecommunications Union to increase Huawei's share of the emerging global 5G standard.

Huawei provides more financing to Africa than any other region--57 loans totaling $4.7 billion and accounting for 31.5 percent of all foreign Huawei lending by volume.  Huawei has financed purchases in at least 23 African countries.

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