Japan should seize chance to become biggest beneficiary of Huawei supply chain transfer: analysts

Source:Global Times Published: 2019/11/26 21:53:40

A Huawei 5G mining machine displayed at the Mobile World Congress in Shanghai in June 2019 Photo: VCG

As the US continues its crackdown on Huawei and ban US companies from selling goods to the Chinese technology giant, the company has been ramping up efforts to both support suppliers at home and explore new import sources overseas - and Japan turns out to be an ideal place where it could expand further.

"From January to September this year, Huawei's purchases in Japan reached 780 billion yen ($7.16 billion), and we predict that the amount in Japan this year will reach 1.1 trillion yen," Huawei Chairman Liang Hua said during his visit to Japan last week.

Liang said that the volume is going to climb further next year.

The figure will be "on par with" Huawei's spending last year in the US, according to a report from the Nikkei Asian Review, and that amount would make Japan into the biggest beneficiary of Huawei's supply chain transfer.

Stressing the company's value to Japanese market, Liang said that "our cooperation with Japanese partners and suppliers is not merely the amount of purchases, but more importantly, we can unite in the face of future development."

There are many problems in the communications industry that require everyone to work together on research and innovation, and solve problems, forming a good cooperative relationship, Liang added.

Analysts said Japanese tech firms should seize the chance to secure more deals with Huawei, as the cooperation would inject more impetus to the country's economy.

According to the Nikkei, citing a report from Huawei, the company spent 721 billion yen on procurement in Japan in 2018, up 50 percent from 2017. This translated to a 521 billion yen contribution to Japan's economy, with a further 225 billion yen contribution coming from employment at Huawei itself and indirectly from its supply chain.

Huawei has been seeking suppliers from China and abroad since the US ban in May, and Japan is just one of its "targets," Fu Liang, a Beijing-based telecom industry expert, told the Global Times on Tuesday.

While Fu said that although Japan has the strength and ability to "replace" some of Huawei's US suppliers amid the ongoing China-US trade war, "Huawei should not count too much on Japan as the country could also face pressure from the US."

In the longer term, US technology companies would be only the victims as the US ban is indeed forcing Huawei to support their competitors around the world and curb their advantages, Fu said.

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