Huawei A Key Beneficiary Of China Subsidies That US Wants Ended

A replica of the Palace of Versailles, medieval turrets, and spires rise across Huawei's new campus in southern China, a monument to the telecom giant's growing fortune -- and the benefits of state aid

Beijing, (UrduPoint / Pakistan Point News - 30th May, 2019 ):A replica of the Palace of Versailles, medieval turrets, and spires rise across Huawei's new campus in southern China, a monument to the telecom giant's growing fortune -- and the benefits of state aid.

The fairytale-like facilities rest on land that was sold by the local government at cut-rate prices to woo and bolster a strategic, high-tech company like Huawei.

It is the kind of government largesse that has fanned US frustrations at China's industrial policies -- subsidies are a sticking point in protracted trade talks between the world's top two economies.

Huawei has become a major flashpoint in the trade war, with President Donald Trump taking steps to block the company's dealings with US companies, threatening its global ambitions.

With the dispute shining a spotlight on China's technological shortcomings, the subsidies are a window into the kind of measures Beijing may step up as trade negotiations founder.

Huawei's annual reports and public records show that it has received hundreds of millions of dollars in grants, heavily subsidised land to build facilities and apartments for loyal employees, bonuses to top engineers, and massive state loans to international customers to fund purchases of Huawei products.

"Below market price land sales, massive targeted R&D grants, and export financing on terms that are more favourable than what Huawei could get from the private sector collectively appear to provide significant subsidies that other countries could challenge at the WTO if they are harming domestic companies," said Claire Reade, a former assistant US trade representative.

Huawei founder Ren Zhengfei had denied that the company received subsidies in a BBC interview in February, but a Huawei spokeswoman later said Ren meant the firm did not receive any special government aid.

"Like other companies, Huawei receives research subsidies from governments in several jurisdictions," the spokeswoman told AFP.

Over the past 10 years, Huawei has received 11 billion yuan ($1.6 billion) in grants, according to its annual reports.