BUSINESS Supply-chain restrictions on China hurt US companies


Supply-chain restrictions on China hurt US companies

China Daily

17:14, May 11, 2021

Employees make auto parts at a foreign-funded company in Anshan, Liaoning province. [Photo/Xinhua]

Supply-chain restrictions on China actually hurt American companies, Andy Purdy, chief security officer for Huawei Technologies USA, said in a signed article published on the Fortune website.

US President Biden's recent executive order to review supply-chain vulnerabilities looks at key industrial sectors of the economy, such as health and energy, in a bid to reduce US dependence on foreign suppliers and ensure that the US will not come up short in a crisis.

Such a review, combined with incentives for domestic manufacturing and R&D, are a better way to improve supply-chain security than maintaining the China-focused export restrictions imposed by the Trump administration last year, Purdy said.

Over the past two years, the US government has curtailed or banned the sale of certain US technology to Chinese companies. Those curbs are actually hurting American businesses, he said.

And the potential harm extends far beyond job losses and corporate profits. Revenue from the sale of chips to Huawei has allowed American companies to fund new research, Purdy said. When that revenue drops, so does the ability of US companies to invest in R&D.

In addition, export restrictions that lead to a broad-scale "decoupling" of Chinese and American technology could also erode innovation, according to Purdy.

Splitting the digital world in half would balkanize the technical standards that companies and governments use to collaborate across borders, thereby restricting their ability to innovate, Purdy added.

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