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Huawei Denies Allegations Of Preferential Treatment From Chinese Government

Chinese tech giant Huawei is, without a doubt, one of the largest companies out there right now. But it looks like it’s possible that the company didn’t rise all the way to the top on its own. On Christmas Day, a Wall Street Journal published a report that states that Huawei received up to US$75 billion (~RM309.945 billion) in funding from the Chinese government.

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The WSJ estimates that the figure can be broken down to US$46 billion (~RM190.1 billion) in loans, and US$1.6 billion (~RM6.612 billion) in grants. A further US$25 billion (~RM103.315 billion) came in the form of tax relief for the country’s tech companies. A further US$2 billion (~RM8.264 billion) of savings came in the form of land purchases.

The Export-Import Bank of China also appears to have helped Huawei close a deal in Pakistan. The bank offered the Pakistani government the waiving of most of the 3% annual interest for a US$124.7 million (~RM515.322 million) loan over 20 years. This is with the condition that Pakistan’s government award a contract to Huawei, bypassing its usual bidding process.

Huawei

In its response, Huawei says that it doesn’t get any form of preferential treatment from the Chinese government. The company explains that, provided certain conditions are met, every tech company in China is entitled to the same subsidies. And the amount Huawei received comes up to less than 0.3% of the company’s total revenue.

The WSJ also notes that it’s not something that’s exclusive to China, as most governments help their country’s biggest companies. Ultimately, it might simply mean that the extent the Chinese government lends Huawei a hand is greater than that of other countries to their tech companies, but it may not be exactly the case.

(Source: WSJ [1], [2], Huawei / Twitter via Engadget)

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