Blacklisting Honor will backfire on the US, Chinese analysts warn
Blacklisting Honor will backfire on the US: analysts
Published: Aug 08, 2021 08:43 PM
An Honor store in Shanghai Photo: CFP

An Honor store in Shanghai Photo: CFP

Some US lawmakers' recent proposal of adding Honor, the former smartphone unit of Huawei, to a blacklist is intentionally provocative and unreasonable, Chinese analysts said on Sunday, warning that a potential ban on the Chinese firm will also hurt many US businesses, including Qualcomm and Intel.

In a letter on Friday, a group of 14 Republican lawmakers in the US House of Representatives asked the US Commerce Department to add the Chinese firm to the US government's economic blacklist, according to a Reuters report.

The Republican lawmakers argued that Honor was spun off "in an effort to evade US export control policies meant to keep US technology and software out of the hands of the Chinese Communist Party." The letter cited analysts saying that "selling Honor gave it access to the semiconductor chips and software it relied on and would have presumably been blocked had the divestiture not gone through."

In response, the US Commerce Department said that the agency "is continually reviewing available information to identify potential additions to the Entity List."

"The proposal is totally unreasonable, and aims to further stir up hostility between China and the US," Ma Jihua, a veteran telecommunication industry analyst, told the Global Times on Sunday, noting that Honor is already an independent unit outside of Huawei and there is no reason for the US to arbitrarily single out and ban the Chinese smartphone brand.

Huawei officially announced the divestment of smartphone sub-brand Honor in November 2020. The sale has included all the assets of Honor, and Huawei would not hold any shares in the new company.

After the spin-off, Honor has quickly resumed cooperation with US chipmakers, including Intel Corp and Qualcomm Inc and launched new phone series.

"A ban on Honor will only hurt US' own firms like Qualcomm rather than curbing China's tech rise," Ma said, adding that Honor is now just a smartphone brand similar to other domestic firms such as Xiaomi, Vivo and Oppo, which have not been targeted by the US.

Honor has seen strong growth momentum. In May and June, Honor's sales grew 39 percent and 27 percent month-on-month, respectively. Judging from the preliminary data in July, Honor's market share is still showing strong momentum and is moving towards a full recovery, according to market research company Counterpoint.