‘We're not that strong': Huawei founder says it lags US in chip making
Beijing | Huawei's founder says the US is exaggerating the Chinese chipmaker's capabilities and played down his company's technology amid trade talks between Beijing and Washington that include discussions of export controls.
In a rare interview with China's state-run People's Daily on Tuesday, Ren Zhengfei said Huawei's Ascend chip, the main rival to Nvidia's products in China, 'still lags behind the US by one generation'. He added that the 'US has exaggerated Huawei's capabilities – we're not that strong yet'.
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US Commerce Secretary Howard Lutnick said discussions between the two sides were going well, while President Donald Trump on Monday put a positive spin on the talks after Monday's session. Lutnick, together with Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer met their Chinese counterparts in London. Any progress in the negotiations is likely to provide relief to markets given that Trump's often-shifting tariff announcements and swings in Sino-US ties have undermined the two economies, disrupted supply chains and threaten to hobble global growth. World stocks, as reflected by the MSCI All-Country World index, traded near record highs on Tuesday while the dollar steadied against a range of currencies. 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"It's not that the Americans are blowing up their fiscal situation because the deficit is going to remain more or less stable. But the quality of the deficit has degenerated," said Samy Chaar, an economist at Lombard Odier. "If you invest, and spend on productive investments, you'll get macro payoffs, because you're going to develop an industry, you're going to strengthen your economy, you're going to create jobs, you have a payoff. "If you spend by basically reducing revenues because you cut taxes on people who don't need the money, they won't be consuming more, or investing more, so the macro payoff is more limited." US Treasuries were yielding around 4.45 per cent, down 3.4 basis points on the day. Data on US consumer inflation for May due out on Wednesday could show the impact on tariffs on goods prices. The producer price index (PPI) report will be released a day later. "May's US CPI and PPI data will be scrutinised for signs of lingering inflationary pressures," said Convera's FX and macro strategist Kevin Ford. "If core CPI remains elevated, expectations for rate cuts could be pushed beyond the June 18 FOMC meeting." Traders expect the Fed to leave rates unchanged at its policy meeting next week. Just 44 basis points worth of easing have been priced in by December. In commodity markets, oil prices rose on the back of optimism that Tuesday's US-China talks could ease trade tensions and improve demand for energy, pushing Brent crude up 0.5 per cent to $US67.40 a barrel. Spot gold rose 0.4 per cent to $US3,341 an ounce. Global stocks and the dollar have held steady as trade talks between the United States and China continued into a second day, giving investors some reason to believe tensions between the world's two largest economies may be easing. 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"While market participants are clearly taking a glass half-full view of the outlook, both on trade policy and more broadly, we don't think that should be interpreted as a view that tariffs will be fully unwound," said Jonas Goltermann, deputy chief markets economist at Capital Economics. Goltermann anticipates US duties on Chinese goods to settle at around 40 per cent, while most analysts have said that the universal 10 per cent levy on imports into the United States is here to stay. In Europe the STOXX 600 edged lower, led by UBS whose shares dropped seven per cent as investors worried about the impact of new government proposals to force the Swiss bank to hold $US26 billion in extra capital. US stock futures were trading around 0.1 per cent higher. 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"It's not that the Americans are blowing up their fiscal situation because the deficit is going to remain more or less stable. But the quality of the deficit has degenerated," said Samy Chaar, an economist at Lombard Odier. "If you invest, and spend on productive investments, you'll get macro payoffs, because you're going to develop an industry, you're going to strengthen your economy, you're going to create jobs, you have a payoff. "If you spend by basically reducing revenues because you cut taxes on people who don't need the money, they won't be consuming more, or investing more, so the macro payoff is more limited." US Treasuries were yielding around 4.45 per cent, down 3.4 basis points on the day. Data on US consumer inflation for May due out on Wednesday could show the impact on tariffs on goods prices. The producer price index (PPI) report will be released a day later. "May's US CPI and PPI data will be scrutinised for signs of lingering inflationary pressures," said Convera's FX and macro strategist Kevin Ford. "If core CPI remains elevated, expectations for rate cuts could be pushed beyond the June 18 FOMC meeting." Traders expect the Fed to leave rates unchanged at its policy meeting next week. Just 44 basis points worth of easing have been priced in by December. In commodity markets, oil prices rose on the back of optimism that Tuesday's US-China talks could ease trade tensions and improve demand for energy, pushing Brent crude up 0.5 per cent to $US67.40 a barrel. Spot gold rose 0.4 per cent to $US3,341 an ounce.
