Huawei calls charge of government help 'hogwash'

17.06.2011
Huawei Technologies has rejected a charge by the head of the U.S. Export-Import Bank that it has an unfair advantage over rivals because of help from the Chinese government.

In Wednesday at the Center for American Progress in Washington, D.C., Export-Import Bank Chairman and President Fred Hochberg said Huawei had a US$30 billion credit line from the Chinese Development Bank. That line of credit reduced the Chinese networking vendor's cost of capital and provided financing to its customers at rates not available to buyers of other vendors' gear, Hochberg said. The Ex-Im Bank is the official export credit agency of the U.S.

"The reality is [that] opaque state-directed capital allows foreign governments to target their financing at specific sectors and companies, while aggressively grabbing market share in an attempt to dominate a market," Hochberg said.

On Friday, a Huawei spokesman refuted Hochberg's charge.

"That is all hogwash," said Bill Plummer, Huawei's vice president of external affairs.

The Chinese Development Bank, established by the Chinese government to help finance development outside China, has set aside $30 billion for loans to Huawei's customers, Plummer said. It was set up through a 2009 memorandum of understanding between Huawei and the bank and is good for five years. It followed another such five-year fund that was established in 2005, he said.