Business

Dallas-based Greyhound was put up for sale by Britain's FirstGroup on Thursday as the north American bus line battles to compete with growing pressure from low cost airlines.

Greyhound has been a household name in north America since it was founded in 1914, with prominent roles for its buses and their running dog logo in movies, music and motorcycle stunts.

FirstGroup, which bought Greyhound for $3.6 billion including debt from Laidlaw International in 2007, plans to sell the bus line and spin-off its UK operator First Bus to head off shareholder pressure, lifting its shares by as much as 13 per cent.

Changing travel trends have meant a bumpy road for Greyhound from the highs of featuring in Frank Capra's 1934 movie "It Happened One Night" and Simon and Garfunkel's "America" in 1968 to the low of filing for bankruptcy protection in 1990.

Greyhound survived and is now the only operator of scheduled intercity coaches in north America, carrying around 17 million passengers a year and serving some 2,400 destinations.

FirstGroup invested in expanding and modernising the Greyhound fleet and terminals as well as marketing, but this has not proved enough to give it the returns shareholders expect.

"The issues at Greyhound have revolved around the impact of low cost airlines coming into some of our markets and [the] relatively low oil price over the year, which in the US means more people get into their cars," FirstGroup Chief Executive Matthew Gregory told reporters on a call.

Gregory said FirstGroup had appointed investment bankers to launched a formal sale process, but declined to place a price tag on Greyhound, which reported revenue of £645 million in the year that  ended on March 31.

'Iconic brand'

"It's not really in my interest to tell you what I think the value might be for the business, but its a iconic brand, has the biggest intercity network of coaches in the US, so I think its something a lot of people will be interested in," he added.

FirstGroup, which also runs tens of thousands of yellow school buses in the United States, said Greyhound has limited synergies with its predominantly contract-based businesses in north America and shareholders would get best value if it was sold.

Its emphasis will now be on First Student and First Transit, its core contracting businesses in north America.

"Greyhound is in long term structural decline and absorbs considerable management time without offering upside potential, and therefore disposing of it is optimal," Investec said.

FirstGroup, which replaced its chief executive last year and has not paid a dividend since 2013, has rejected two approaches from private equity firms and has been targeted by Canadian activist investor West Face Capital.

Coast Capital, its second-largest shareholder, has been seeking to replace six of its eleven directors. 

FirstGroup, whose shares fell by 23.3 per cent in 2018, also cast doubt on its future in British railways, saying it had "reduced expectations" for its two most recently awarded franchises due to timetabling, infrastructure issues and strike action.

"Any future commitments to UK rail will need to have an appropriate balance of potential risks and rewards for our shareholders," it added.

HANOI — From socks and sneakers to washing machines and watches, Asian countries are hoping the US-China trade war will permanently boost manufacturing as brands dodge the row by choosing cheaper locations to make their goods.

Business has fanned out from China, often referred to as the “Factory of the World”, into Vietnam, Cambodia, India and Indonesia for years.

But the shift has accelerated as the world’s two biggest economies slap tit-for-tat tariffs on each other. 

In the latest round of the bruising spat, US President Donald Trump this month raised tariffs to 25 per cent on $200 billion of Chinese goods, prompting Beijing to retaliate with higher duties on $60 billion worth of American products.

That “really became a kicker to force people to move”, said Trent Davies, manager of international business at the advisory and tax firm Dezan Shira & Associates in Vietnam.

A surge in relocations from China or plans to scale up production has strengthened the manufacturing hubs of Southeast Asia and beyond.

Casio said it was moving some of its watch production to Thailand and Japan to avoid the US penalties, while Japanese printer-maker Ricoh said it was also shifting some of its work to Thailand. 

American shoe giant Steve Madden plans to boost production in Cambodia, and Brooks Running Company, Haier washing machines and sock maker Jasan — which sells to Adidas, Puma, New Balance and Fila — are all eyeing Vietnam.

The country is a logical move for manufacturers, wooed by low-cost labour, attractive tax incentives and close proximity to China’s unparalleled supply chains.

“It’s not just a result of the trade war, a lot of it is opportunity in Vietnam,” Davies said. 

Boom times 

Some Vietnamese suppliers say the trade dispute has fast-tracked the trend as companies scramble to dodge fresh tariffs that could affect some 4,000 categories of exports to the US. 

On a busy stretch of road in Hanoi, the bustling Garco 10 factory is churning out men’s shirts for American brands like Hollister, Bonobos and Express. 

The company says exports to the US were up 7 per cent last year, with an expected 10 per cent jump this year. 

“Thanks to the trade war... several sectors of the Vietnam economy have gained, especially our garment sector,” Garco 10 director Than Duc Viet told AFP.

“We want to open more factories, we want to expand our capacity,” he said at one of his facilities where an army of workers made shirts destined for American shopping malls and department stores. 

US imports from China during the first three months of this year reached nearly $16 billion, up 40 per cent from the same period last year, according to US trade data. 

And that number could rise. 

Labour woes 

More than 40 per cent of US companies in China are now considering moving or have already done so, mainly to southeast Asia or Mexico, according to a poll this month from the American Chamber of Commerce in China.

But the shift is not expected to be seamless. 

While southeast Asia offers low-cost labour — monthly factory salaries are about $290 in Vietnam and $180 in Cambodia and Indonesia, compared to around $540 in China — workers are less experienced.

“Labour costs are three times higher in China, but the efficiency is also three times higher,” said Frank Weiand, co-chair of the manufacturing committee at the American Chamber of Commerce in Vietnam. 

There is also a smaller labour pool to draw on.

Vietnam employs around 10 million people in the manufacturing sector compared to 166 million in China, according to data from the International Labour Organisation. 

Indonesia employs 17.5 million, and Cambodia 1.4 million.

Experts warn companies may also face supply chain woes, infrastructure challenges and land shortages in less developed markets without the capacity to absorb overspill from China.

Global shift 

This could be a problem for Indonesia, whose bureaucracy has left it trailing some of its neighbours. 

But now the country is hoping to soak up foreign investment from the trade war. 

“We’re trying to make it easier for investors by speeding up the process for getting business permits,” said Yuliot, a senior official at the Indonesian Investment Board who goes by one name.

The country is also beefing up infrastructure and skills training while offering corporate tax breaks, he added.

With no end to the trade war in sight, analysts say the manufacturing shift out of China is likely to continue — and could redefine long-entrenched global trade patterns. 

“Certainly it will end China’s dominance as the ‘Factory for the US’,” Gary Hufbauer, senior fellow at the Peterson Institute for International Economics, told AFP. 

US companies and consumers may also get the short end of the stick: higher tariffs on goods out of China means the average American will likely have to pay more for a pair of Nike sneakers or Levi’s jeans.

If Trump was hoping to drive US manufacturers back home by imposing those tariffs as part of his “Make America Great Again” clarion call, he’s not likely to get his wish. 

American industries — and wages — are not set up for low-cost manufacturing on the scale of China. 

Instead, countries like Vietnam are likely to continue scooping up those jobs.

Le Thi Huong, who sews hems at Hanoi’s Garco 10 factory, said: “I hope there will be more orders... so we have more jobs and more income.”

ROME — In secretive vaults in Rome, crisp 100 and 200 euro banknotes are rolling off the printing press.

The new notes with enhanced security features will offer better protection against forgeries, officials told Reuters, which was given rare access to see the Bank of Italy's Banknote Printing Department at work.

The notes, named after the mythological princess Europa and released on Tuesday, have large value numerals in a bolder design and contrasting shades to make them easier to identify, European Central Bank (ECB) Banknotes Director Ton Roos said.

"If you hold the banknote up to the light and then on the left hand side you see the watermark with the portrait of... Europa and on the right hand side, on the top of the silver stripe, you have a portrait window, also with the portrait of Europa," Roos said as he held up a new 100 euro note.

"When you look to the [bottom left] corner, you have a numeral that is green... when you tilt the note... you see a light line going up and down and inside the numeral you see little euro logos," he said.

"We try always to develop very sophisticated security features because we want to stay far ahead of the counterfeiters," he added.

The printing of the 100 and 200 euro notes completes the Europa series that has been gradually replacing the first set of euro notes first issued in 2002.

Roos said the ECB was printing about 2.3 billion 100 denomination banknotes but not all banknotes would be introduced immediately, as some would be kept in the central bank vault and sent to commercial banks when needed.

The 100 euro note is one of the most popular with 2.7 billion notes in circulation at the end of June 2018, accounting for 13 per cent of all banknotes in circulation, according to the ECB.

Ten euro notes account for 12 per cent; the most popular is the 50 euro note making up 23 per cent of all banknotes in circulation.

National central banks within the eurozone have jointly printed the currency's banknotes since 2002, with each institution accountable for a proportion of the total annual production in one or several denominations.

OSLO — US stock market operator Nasdaq said on Monday it was withdrawing its offer of nearly 700 million euros ($784 million) to acquire the Oslo Stock Exchange, clearing the way for its European competitor Euronext.

After months of battling for the control of one of Europe’s last independent stock exchanges, Nasdaq threw in the towel when it became evident it could not secure enough of the equity.

“This decision has been made because under the current circumstances the minimum acceptance condition for completion of the offer is incapable of being satisfied,” the company said in a statement.

Nasdaq, which controls all the other Nordic stock exchanges, has been competing with Euronext to acquire the stock exchange since the start of the year.

The two companies had matched each other in price, both offering 6.8 billion Norwegian kroner ($781 million, 698 million euro).

Nasdaq had the blessing of the bourse’s board and management, but Euronext gained an advantage by securing the support of shareholders representing a majority of the Oslo exchange’s equity, whereas Nasdaq only managed to get commitments for about 37 per cent of the capital.

To secure the deal Nasdaq counted on the Norway’s finance ministry, which needed to clear any purchase of more than 10 per cent of the exchange, to create a regulatory roadblock for Euronext.

But a decisive blow was dealt to the US stock operator’s chances on May 13 when the Norwegian government declared that both Euronext and Nasdaq were “suitable owners”.

Euronext, which already manages the stock exchanges of Paris, Brussels, Amsterdam, Lisbon and Dublin, on Monday reiterated its aim to complete the transaction by the end of June.

The company’s shareholders unanimously voted to acquire up to 100 per cent of the Norwegian exchange’s shares on May 16.

“Following the decision of the Norwegian ministry of finance and the unanimous vote of Euronext shareholders, the main conditions have been lifted and the transaction should be completed by the end of June 2019,” the company stated.

The European operator initiated the takeover late last year by buying up shares put up for sale by minority shareholders and making an offer for the entire enterprise.

Caught off guard by the move, which they had not been informed of in advance, the Oslo Stock Exchange’s management started looking for other potential buyers, thus triggering Nasdaq’s counteroffensive.

In addition to the bourse’s management and board, the US operator had managed to win the support of the two main shareholders, DNB Bank and the KLP pension fund, which own 20 and 10 per cent of the Oslo Stock Exchange respectively.

Released from their obligations to Nasdaq, the two investors said on Monday they had yet to decide their next step.

“Now that Nasdaq has withdrawn its offer, we will sit down with Euronext and the other shareholders that still haven’t sold to find a good solution,” said DNB spokesman Thomas Midteide.

“We will discuss things internally at KLP and perhaps with other stockholders about what solution we should choose,” said Sverre Thornes, CEO at KLP.

Euronext has indicated that should the two minority shareholders wish to remain on the board of the Oslo Stock Exchange’s round table, they would be welcome to do so.

PARIS — French and Italian-US auto giants Renault and Fiat Chrysler (FCA) are set to announce talks on an alliance, with a view to a potential merger, informed sources said on Sunday.

Renault and FCA are likely to unveil the move "within hours, perhaps tomorrow [Monday], before the [Paris] bourse opens", one of the sources told AFP on condition of anonymity, adding an eventual "merger" was on the agenda.

The same source added a statement would cover "the possibility of a convergence between the two groups" which "will be studied" with a view to a potential merger.

A Renault board meeting is scheduled for 8:00am (06:00 GMT) on Monday.

Renault's current major partnership is with Japan's Nissan, in which it holds 43 per cent. 

Nissan in turn owns 15 per cent of its French partner Renault but the imbalance in the relationship has led to frictions, highlighted by the arrest of former Renault and Nissan chief Carlos Ghosn in Tokyo.

The Financial Times (FT) reported on Saturday that the Renault-FCA discussions were at an "advanced" stage and could lead to "extensive cooperation".

The Wall Street Journal said the talks were "wide-ranging" and could include Renault and Fiat Chrysler "joining large portions of their businesses".

However, The New York Times took a more cautious line, saying the discussions were in early stages, the specifics unclear and "could still collapse".

Contacted by AFP, neither Renault nor Fiat would comment.

The FT, quoting multiple people informed on the talks, said: "the agreement may ultimately lead the carmaker [Fiat-Chrysler] to join the Renault-Nissan-Mitsubishi Alliance in the future," if Japanese auto major Nissan could be won over.

Such an alliance would become the world's biggest, a title Renault-Nissan-Mitsubishi currently vies for with Germany's Volkswagen.

Following his arrest, former Renault and Nissan chief Ghosn was bailed for a second time on April 25 and is now preparing for trial on four charges of financial misconduct ranging from concealing part of his salary, to using Nissan funds for personal expenses.

The reports did not spell out the level of any involvement by Nissan in the current Renault-FCA discussions although one FT source said it was absent. 

Early this year, rumours circulated that Renault was interested in Fiat-Chrysler after its hopes for a full merger with Nissan or even French competitor PSA were dashed.

LONDON — The British pound wobbled on Friday after Prime Minister Theresa May announced her resignation, while stock markets mostly rebounded as US President Donald Trump offered an “olive branch” to China in their trade war, dealers said.

Sterling sank below $1.27 after May said she would step down on June 7 as prime minister, paving the way for a brutal contest to replace her.

The fall was contained, however, as the likelihood of May’s departure had been mostly factored into prices — although the Conservative Party’s choice to succeed her remains an unknown.

“The pound will bounce around here and there but it won’t be going anywhere fast,” Forex.com analyst Fawad Razaqzada told AFP.

“A lot now depends who will be the next leader of the Tories.”

The currency could face fresh turmoil, with key Brexiteer and former foreign minister Boris Johnson the front-runner to replace May. 

Ratings agency Moody’s warned that news of May’s departure “amplifies the uncertainty” over Britain’s withdrawal from the European Union — and “increases the risk of a no-deal Brexit”.

BEIJING  — China said the United States needs to correct its "wrong actions" for trade talks to continue after it blacklisted Huawei, a blow that has rippled through global supply chains and battered tech shares as investors fear a technology cold war.

Japanese conglomerate Panasonic Corp. joined a growing list of global companies which have said they are disengaging from Huawei Technologies Co. Ltd., the world's second-largest seller of smartphones and the largest telecom-gear maker, saying it had stopped shipments of some components.

Its move came a day after British chip designer ARM said it had halted relations with Huawei to comply with the US supply blockade, potentially crippling the Chinese firm's ability to make new chips for smartphones. Huawei uses ARM blueprints to design the processors that power its smartphones.

"If the United States wants to continue trade talks, they should show sincerity and correct their wrong actions. Negotiations can only continue on the basis of equality and mutual respect," Chinese Commerce Ministry spokesman Gao Feng told a weekly briefing.

"We will closely monitor relevant developments and prepare necessary responses," he said, without elaborating.

The United States has accused Huawei of working for the Chinese government and activities contrary to national security, accusations Huawei denies. The Trump administration softened its stance slightly this week by granting the firm a licence to buy US goods until August 19 to minimise disruption for customers.

Japan's Toshiba Corp. said it had resumed some shipments to Huawei after temporarily suspending shipments to check whether they included US-made components.

"What we are witnessing is a potential reconfiguration of global trade as it has stood since World War II... investors should begin thinking about how sensitive their portfolios are to global supply chain-exposed shocks," Saxo Bank's head of equity strategy, Peter Garnry, wrote in a note titled: "Are you ready for a cold war in tech?" 

Huawei founder Ren Zhengfei told Chinese financial magazine Caixin on Thursday that he did not see ARM's decision to suspend business with Huawei as having an impact on the company.

He said that Huawei had a long-term agreement with ARM and speculated that the British firm had made such a move because its parent, Japan's SoftBank Group Corp., was waiting for US approval for the merger of Sprint Corp., which it owns, and T-Mobile US Inc.

Industry experts have questioned Huawei's claims minimising the impact of moves that makes it hard for the company to do business with US firms.

No further trade talks between top Chinese and US negotiators have been scheduled since the last round ended on May 10, the same day US President Donald Trump sharply increased tariffs on $200 billion worth of Chinese goods and took steps to levy duties on all remaining Chinese imports.

Speaking at a separate briefing in Beijing, a spokesman for China's foreign ministry reiterated that China's door was always open for talks, but that the situation with Huawei and other Chinese tech firms targeted by the United States made this difficult.

"Relevant US actions obviously do not create a good atmosphere or environment for consultations," spokesman Lu Kang said.

China has retaliated with its own levies on US imports, but it was Washington's subsequent move against Huawei that took the trade war into a new phase, stoking fears about risks to global growth and knocking financial markets.

NEW YORK — Global equity markets slid on Wednesday as investors sought safety in bonds, the Japanese yen and Swiss franc amid renewed worries over the US-China trade standoff after reports the United States has another Chinese tech firm in its sights.

Relief over Washington’s temporary relaxation of curbs against China’s Huawei Technologies Co. Ltd. evaporated after reports that the White House is considering further sanctions on Chinese video surveillance firm Hikvision.

Fears of another blacklisting reinforced worries that US President Donald Trump is looking beyond sealing a trade deal with China to a potentially bigger battle aimed at curbing Beijing’s technology ambitions.

The yen and Swiss franc gained against the dollar and the price of the 10-year US Treasury note rose, but the decline in US and European equity markets was subdued.

“The market is still expecting a resolution or at least a modification of some of the worrying aspects out there about the trade relationship,” said John Vail, chief global strategist at Nikko Asset Management in New York.

Major central banks around the world still have accommodative monetary policies, which favours equities, he said.

“Clearly the situation is more fraught than it has been in the past,” Vail said. “But for the time being we’re still positive on equity markets globally.”

Asia-Pacific shares outside Japan closed 0.03 per cent higher, while Japan’s Nikkei rose 0.05 per cent.

The Chinese markets, which have endured a volatile few months, were on the backfoot. The Shanghai Composite Index closed down 0.5 per cent.

MSCI’s gauge of stock performance in 47 countries across the globe shed 0.20 per cent and the FTSEurofirst 300 index of leading Europeans shares fell 0.13 per cent.

On Wall Street, the Dow Jones Industrial Average fell 70.84 points, or 0.27 per cent, to 25,806.49. The S&P 500 lost 6.85 points, or 0.24 per cent, to 2,857.51 and the Nasdaq Composite dropped 20.32 points, or 0.26 per cent, to 7,765.40.

London’s FTSE 100 blue chips bucked the trend, rising 0.07 per cent as sterling slumped to lows last seen in early January amid renewed worries about the country’s messy exit from the European Union.

The pound fell 0.43 per cent to $1.2650, its lowest since early January, after Prime Minister Theresa May’s final gambit to get a divorce deal approved failed dramatically.

The dollar held near a one-month high ahead of the release of Federal Reserve meeting minutes, which may provide more clues on why the US central bank stood pat on interest rates earlier this month.

Investors sought havens in the Swiss franc, Japanese yen and German government bonds. 

The yen strengthened away from two-week lows against the dollar, rising 0.17 per cent to 110.30 yen, while the Swiss franc was higher against the euro and the dollar. The euro fell 0.04 per cent against the dollar to $1.1154.

In commodities, US West Texas Intermediate crude futures were down $1.25 at $61.88 per barrel after American Petroleum Institute data showed that US crude stockpiles rose unexpectedly last week.

Oil was also pressured by Saudi Arabia reiterating that it would aim to keep the market balanced and try to reduce tensions in the Middle East.

Brent crude futures lost $1.01 to $71.17 per barrel.

Benchmark 10-year notes last rose 10/32 in price to yield 2.3909 per cent. 

NEW YORK/SHANGHAI — The United States has temporarily eased trade restrictions on China's Huawei to minimise disruption for its customers, a move the founder of the world's largest telecoms equipment maker said meant little because it was already prepared for US action.

The US Commerce Department blocked Huawei Technologies Co. Ltd. from buying US goods last week, saying the firm was involved in activities contrary to national security.

The move came amid an escalating dispute over trade practices between the United States and China. The two countries increased import tariffs on each other's goods over the past two weeks after US President Donald Trump said China had reneged on earlier commitments made during months of negotiations.

On Monday, the Commerce Department granted Huawei a licence buy US goods until August 19 to maintain existing telecoms networks and provide software updates to Huawei smartphones.

The Chinese company is still prohibited from buying American-made hardware and software to make new products without further, hard-to-obtain licences.

The reprieve is intended to give telecom operators that rely on Huawei equipment time to make other arrangements, US Secretary of Commerce Wilbur Ross said in a statement on Monday.

"In short, this licence will allow operations to continue for existing Huawei mobile phone users and rural broadband networks," Ross said.

Huawei founder Ren Zhengfei on Tuesday said in a series of interviews with Chinese state media that the reprieve bore little meaning for the telecom gear maker as it had been making preparations for such a scenario.

"The US government's actions at the moment underestimate our capabilities," Ren said in an interview with CCTV, according to a transcript published by the Chinese state broadcaster.

Pervasive 

The temporary licence suggests changes to Huawei's supply chain may have immediate, far-reaching and unintended consequences for its customers.

"The goal seems to be to prevent Internet, computer and cell phone systems from crashing," said Washington lawyer Kevin Wolf, a former Commerce Department official. "This is not a capitulation. This is housekeeping."

The reprieve also appeared aimed at telecom providers in countries where Huawei equipment is pervasive, said Washington trade lawyer Douglas Jacobson.

The Commerce Department said it will evaluate whether to extend the licence period beyond 90 days.

Google suspension 

Huawei is currently on the receiving end of a US government accusation that it engaged in bank fraud to obtain embargoed US goods and services in Iran and move money via the international banking system. Huawei has pleaded not guilty.

Adding to its US troubles on Thursday, the US Commerce Department placed Huawei and 68 entities on an export blacklist, making it nearly impossible for those listed to purchase goods made in the United States.

On Sunday, Reuters reported citing a person familiar with the matter that Alphabet Inc.'s Google suspended business with Huawei that requires the transfer of technical service, hardware and software except what is publicly available via open-source licensing.

Monday's temporary licence is likely to allow companies such as Google to continue providing service and support, including software updates or patches, to Huawei smartphones that were available to the public on or before May 16.

Google did not respond to a request for comment on the licence.

The licence also allows Huawei to engage in the development of standards for fifth-generation (5G) telecom networks.

Apple praise 

Ren put up a strong front on Tuesday, reiterating claims that the restrictions will not hurt Huawei's prospects and that no other company will be able to catch up with Huawei in 5G technology in the next two to three years. 

China was nevertheless still "far behind" the United States in technology, he said.

Chip experts have called out Huawei on its claims that it could ensure a steady supply chain without US help, saying the technology the Chinese telecoms network gear maker buys from American companies would be "hard to replace".

Nearly 16 per cent of Huawei's expenditure on components last year went to US firms including Qualcomm Inc., Intel Corp. and Micron Technology Inc., analysts said.

Ren said Huawei was at odds with the US government, not US firms, and in a comment that trended on Chinese social media, he praised Apple Inc.'s iPhones, saying that he gifted the American firm's devices to family members.

"Apple has a good business ecosystem... We cannot think narrow-mindedly that loving Huawei equals loving its phones."

US firms could lose up to $56.3 billion in export sales over five years from stringent export controls on technologies involving Huawei or otherwise, the Information Technology & Innovation Foundation said in a report. Missed opportunities threatened as many as 74,000 jobs, the foundation said.

John Neuffer, president of the Semiconductor Industry Association which represents US chipmakers and designers, called on the government to ease Huawei restrictions further. 

SAN FRANCISCO — US Internet giant Google, whose Android mobile operating system powers most of the world’s smartphones, said it was beginning to cut ties with China’s Huawei.

The move could have dramatic implications for Huawei smartphone users, as the telecoms giant will no longer have access to Google’s proprietary services — which include the Gmail and Google Maps apps — a source close to the matter told AFP.

Reports also emerged on Monday that several US chipmakers providing vital hardware for Huawei’s smartphones have stopped supplying the Chinese firm.

In the midst of a trade war with Beijing, President Donald Trump has barred US companies from engaging in telecommunications trade with foreign companies said to threaten American national security.

The measure targets Huawei, the world’s second-biggest smartphone maker, which has been listed by the US Commerce Department among firms that American companies can only trade with if authorities grant permission.

The ban includes technology sharing. Google, like all tech companies, collaborates directly with smartphone makers to ensure its systems are compatible with their devices.

“We are complying with the order and reviewing the implications,” a Google spokesperson told AFP.

“We assure you while we are complying with all US gov’t requirements, services like Google Play & security from Google Play Protect will keep functioning on your existing Huawei device,” Google’s official @Android account Tweeted.

Due to the ban, Google will have to halt business activities with Huawei that involve direct transfer of hardware, software and technical services that are not publicly available.

That means Huawei will only be able to use the open source version of Android.

It will need to manually access any updates or software patches from Android Open Source Project, and also distribute the updates to users itself, a source told AFP. 

In a statement, Huawei said it would “continue to provide security updates and after-sales services” to all existing smartphones and tablets globally, including those not yet sold.

A person familiar with the matter who requested anonymity told Bloomberg News that Huawei will be unable to offer Google’s proprietary apps and services in the future. 

China’s foreign ministry said it was actively following the situation.

“At the same time, the Chinese side supports Chinese enterprises in taking up legal weapons and defending their legitimate rights,” said spokesman Lu Kang.

5G leader 

Huawei is a rapidly expanding leader in 5G technology, and currently has the most advanced and cheapest 5G capacities in the world.

Its smartphones outsold Apple’s iPhones in the first quarter of this year, seizing the California company’s second-place spot in a tightening smartphone market dominated by Samsung.

But the Chinese firm remains dependent on foreign suppliers.

It buys about $67 billion worth of components each year, including about $11 billion from US suppliers, according to The Nikkei business daily.

US chipmakers including Intel, Qualcomm and Broadcom have informed workers that they will stop supplying Huawei until further notice, Bloomberg said on Monday, citing people familiar with their actions. 

Huawei “is heavily dependent on US semiconductor products and would be seriously crippled without supply of key US components”, said Ryan Koontz, a Rosenblatt Securities analyst, although the Chinese firm is believed to have stockpiles in place.

The ban “may cause China to delay its 5G network build until the ban is lifted, having an impact on many global component suppliers”, he added.

The companies themselves did not comment. 

Huawei is the target of an intense campaign by Washington, which has been trying to persuade allies not to allow China a role in building next-generation 5G mobile networks.

Super-fast networking 5G, the fifth-generation successor to today’s decade-old 4G technology which is struggling to keep pace with global broadband demand, promises radically quicker transfers of data.