Huawei Ban Puts South Korea In A Familiar Place: Caught Between The U.S. And China

Less than a week after Huawei Technologies was blacklisted by the United States, more than a hundred South Korean politicians and business leaders toured the Chinese tech giant’s headquarters and its lavish new campus outside Shenzhen.

Executives from firms such as Samsung Electronics watched demonstrations of high-speed robotics and smart city simulations powered by Huawei’s next-generation 5G network equipment. The event was part of a Seoul-backed forum aimed at building tighter tech links between China and Asia’s fourth-largest economy.

But the gathering was overshadowed by the U.S. decision early this month to ban American tech and telecom firms from doing business with Huawei, and a push to get companies around the world to follow suit.

The campaign against Huawei, and the broader U.S.-China trade war, have landed export-driven South Korea in a familiar bind, caught between its crucial security ally and biggest trading partner.

Key global tech companies are suspending sales of parts and software to the Chinese firm and several mobile carriers are delaying the launch of new Huawei handsets. But in South Korea, business executives and politicians said they see few alternatives to conducting business with China as normal.

For Samsung, South Korea’s national tech champion, any advantages it could gain from Washington’s move against Huawei would be outweighed by the pain of lost business, experts said.

Samsung could increase share at Huawei’s expense in smartphones and telecom network equipment, and its stock has ticked up modestly since the U.S. ban was announced. The broader trade war could also blunt the rise of new Chinese rivals in chips and smartphone screens.―Reuters