China’s giant Huawei technology co limited could completely cut off investment into the Silicon Valley, the former deputy governor of the People’s Bank of China said on Tuesday, amid intense criticism against Huawei, the world’s largest telecom equipment maker.
Huawei is facing restriction by several western governments, following extreme concerns that its product poses a national security threat and could be used for spying.
According to CNBC news reports, governor’s announcement comes at times when China and the United States are engaged in an ongoing trade war, with investors saying that the conflict could turn into a so-called “tech war”.
Zhu Min, a Chinese economist and is Deputy Managing Director of the International Monetary Fund, said, “I can tell you, after the Huawei events, all the Chinese money into Silicon Valley stops. And no US money will want to invest in China either.”
Min told CNBC on Tuesday, “The psychology has really changed, because technical war is a most interconnected war, with US capital moving everywhere and Chinese capital moving everywhere.”
Being the world’s largest and top smartphone makers, Huawei also considered as the leader in telecom infrastructure, especially in relation to the 5G, the next generation of the mobile phone network.
But however, the concerns regarding the security of Huawei have been intensified during the recent week, particularly in Canada, Australia, the US, Britain, and Germany.
Several countries along with the US has accused Huawei of committing technology theft, in the wake of the ongoing trade dispute, though China totally denied.
While addressing the World Economic Forum (WEF), Huawei chairman Liang Hua on Tuesday, told world leaders that his company could now shift from western countries if it continues to face allegations and restrictions. Liang told reporters Huawei always follows regulations at places where it operates.
When asked whether it was possible for China to abruptly divert money away from Silicon Valley, John Zhao, founder and chief executive of Hony Capital, replied: “By numbers, that seems to be the case.”
While speaking to CNBC’s Nancy Hungerford in Davos on Wednesday, Zhao said, “But it really suggests something that is much deeper than the number has started to show. First of all, it shows the interdependency that the world has built with each other … But it also suggests that while there are some short-term pains to be resolved, we need to have a long-term view.”