Chinese tech firms lie low at CES after trade war curbs

By Wang Cong and Zhang Dan Source:Global Times Published: 2019/1/3 22:48:39

An estimated 170,000 technology insiders converge at the CES in Las Vegas on January 12, 2018. Photo: IC

They were dominant forces at the Consumer Electronics Show (CES) in Las Vegas in recent years, but this year Chinese technology companies have shown less interest in attending the world's largest fair for the industry amid a bruising trade and technology race with the US.

Chinese companies formerly used the CES as a launch pad for entering the US and other overseas markets, but worries over the possibility of getting caught in the crosshairs of Washington's trade protectionism or ensnared in its technology crackdown have curbed their enthusiasm, according to Chinese industry insiders and analysts.

Though there are still more than 1,200 Chinese technology companies that signed up for this year's CES, which is scheduled to kick off next week, the number is down from 1,551 in 2018 - the first drop in at least four years, according to official figures and media reports.

Among those sitting it out this year, the most notable is telecom giant ZTE Corp. A company representative confirmed to the Global Times on Thursday that the company, which was a frequent attendee at the event, will not be there this year. The representative didn't give any reason.

ZTE was barred by the US government from acquiring key equipment from US suppliers last year because, US officials claimed the company had violated US sanctions on Iran and North Korea. The ban was later lifted after ZTE reached a $1.4 billion deal with the US, including a $1 billion penalty.

The ban on ZTE was widely viewed in China as part of the US government's politically charged push to contain China's technological rise as the two countries compete for dominance in key technologies of the future such as 5G.

US officials have also targeted another Chinese technology giant, Huawei Technologies Co. In a high-profile case, Huawei CFO Meng Wanzhou was arrested by Canada authorities late last year at the behest of the US, which sent a chill through Chinese technology executives who frequently travel between the US and China.

Huawei Device (Dongguan) Co, a unit of Huawei, is among the Chinese companies that did sign up for the CES this year. The company did not respond to a request for comment as of press time.

Discouraged, concerned

The US crackdown, which also includes bans on Chinese investments in the US technology sector, and a broader trade war between the world's two largest economies might have discouraged some Chinese companies from attending, insiders and analysts said.

A source South China's Guangdong Province, China's technology powerhouse, China's technology powerhouse, said that local governments, which previously encouraged companies in the sector to participate, have instead asked companies to "keep a low profile" at this "sensitive" time amid the trade war. Such warnings may have let companies have a second thought to go to the show or publicize their attendance, the source told the Global Times.

Since the arrest of Meng, many Chinese executives "don't dare" go to the US anymore, an industry insider based in Beijing told the Global Times on Thursday. "Many companies think 'if I don't attend, I won't lose a single penny'," the insider said.

Some Chinese companies have also refrained from sending representatives from their head offices to the event. A PR representative for commercial drone producer DJI told the Global Times that all staff attending the CES will be from its branch in the US, although the representative claimed that this is just the normal practice. The US banned the use of DJI drones at its military facilities last year.

Even those attending the event are likely to keep a low profile. At this year's CES, there are no keynote speeches by Chinese technology executives scheduled, unlike previous years. Last year, Huawei CEO Richard Yu made headlines after he used a keynote speech to criticize a last-minute decision by US carrier AT&T to pull out of a deal to sell Huawei's smartphones in the US.

Artificial intelligence (AI) specialist iFlytek Co said that AI technologies do not belong to one company or one country but will benefit all. "We hope everyone can see China's AI technological capabilities and join us to build a better world," the company said in a statement to the Global Times.

Chen Qingqing contributed to this story.

Newspaper headline: Lower profile for technology sector at CES


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