"How to stop bullying from Beijing?" Just take their Prada bag. China punished Ericsson for Sweden's exclusion of Huawei, and if the West unites, it can fight back. ”
This is an opinion piece from the Wall Street Journal, written by Elisabeth Braw, a researcher at the American Enterprise Institute (AEI), a think tank. On August 10, local time, she once again talked about the Swedish government's "Huawei 5G ban" and the setback of the country's telecom giant Ericsson's operation in China.
The authors claim that China punished Ericsson because Sweden did not budge on banning Huawei, and that if Western governments and large corporations do not unite against China, then all Western companies will be punished in the same way.
At the end of the article, the author also "supports" and encourages major Western luxury brands to cooperate with their own governments to boycott China (the market), on the grounds that the Chinese people cannot accept the situation of not enjoying luxury goods. For investment from China, the article simply claims that if this provides China with a high-pressure means, don't stop.
Screenshot of the Wall Street Journal review article
The starting point for author Bra in writing this review article is still the "Huawei 5G ban" issued in Sweden last year. On October 20 last year, the Swedish government banned Chinese companies such as Huawei and ZTE from participating in the construction of its 5G network for so-called "security reasons." After Huawei filed an appeal, the Stockholm Administrative Court rejected Huawei's appeal on June 22 this year, upholding the "Huawei 5G ban".
The author believes that since this incident, the Swedish telecommunications company Ericsson has begun to be "retaliated" by the Chinese side.
Ericsson's revenue in China has accounted for about 10% of the company's total revenue in the past few years, but the company's financial report in the second quarter of this year shows that Ericsson's sales in China fell from 4.1 billion Swedish kronor (ABOUT 470 million US dollars) a year ago to 1.5 billion Swedish kronor (about 170 million US dollars), a decline of 60%, which also led to the company's overall sales decline for the first time in three years.
In addition, China is currently preparing for the next round of large-scale 5G network construction, as the world's largest number of subscribers, China Mobile announced the results of the latest round of 5G equipment bidding in July. In the tender, which is worth about $6 billion, 60.5 percent belongs to Huawei, 31.2 percent to ZTE, another smaller Chinese supplier, Datang Telecom, gets a 2.8 percent share, and Ericsson is the biggest loser, dropping from 11 percent last year to just 1.9 percent.
In fact, Ericsson, which strongly opposes the government's suppression of Huawei, has long estimated the sharp decline in the market share of 5G in China, and after getting the "sporadic share" of China's three major communication operators, the company's CEO Brje Ekholm said, "This is a positive signal compared to not achieving share", and said that it will continue to strive to increase market share in China.
China Mobile's latest round of 5G equipment bidding share From the Wall Street Journal
The article also mentioned Finnish telecommunications company Nokia, saying that the Finnish parliament also passed a law in 2020 to exclude some companies from their 5G networks on the grounds of "national security", but unlike the Swedish government, Finnish lawmakers did not target Huawei or ZTE separately, which provided "more negotiating space" for Nokia to enter the Chinese 5G market.
"The lesson is obvious: Face China bravely and your company will be punished." Keep a low profile and your company will be fine. Bra wrote after comparing Ericsson and Nokia.
Ericsson is the latest victim of geopolitical commercial punishment from China, after Norway's salmon industry and Australia's wine industry in the past two years have encountered great difficulties in exporting to China.
In response, the authors of the article encourage that countries should unite to buy Ericsson's so-called "Freedom-5G equipment", whether on issues such as the covid-19 epidemic, Taiwan or future 6G, if western allies openly support each other, China's threat will be weakened. "Beijing can punish Ericsson, Norwegian fishermen and the Australian wine industry, but China's economy is still dependent on Western companies."
"Consider luxury goods, China is the world's largest luxury market, and Chinese consumers are looking for Western brands such as Chanel, Cartier, Hermès and Gucci. Rising standards of living can satisfy Chinese citizens, but what if China's elites cannot enjoy these incredible standards of living? ”
At this point, the author of the article began to have a "bad idea" in terms of luxury goods.
"These luxury brands can work with their own governments to announce a temporary boycott of China (the market). These companies have long wanted to address the intellectual property problems that are prevalent in China, and brands such as Dior have been affected by their operations in China after calling Taiwan a 'country'. The status quo of ip rights infringement and fear is not a sustainable business strategy. ”
Infographic: Customers sweeping goods at the Louis Vuitton store in Hong Kong's Harbour City, a shopping mecca around the world. Pictured from Oriental IC
The article also claims that the parliaments of Western countries can begin to tighten foreign investment legislation in various countries, and while all countries need Chinese investment, if this is just another means of providing China with another means of coercion, it is not needed.
"China can punish Ericsson, but China's success depends on access to these top companies. By working together to express their views, Western governments and corporate brands will get China to stop bullying. The article concludes with such an aggressive claim.
In fact, in recent years, some foreign luxury brands and famous enterprises have "overturned" due to their wrong behaviors such as insulting China, advocating "Hong Kong independence" and "Taiwan independence", and vainly commenting on China's internal affairs, such as the "insult to China storm" in 2018 by Dujia Bangna (D&G) and the unreasonable boycott of Xinjiang cotton by foreign brands such as H&M in March this year. Afterwards, they were met with strong dissatisfaction and spontaneous boycott by Chinese consumers.
At a regular press conference of the Chinese Foreign Ministry on March 30 this year, a foreign media reporter asked whether there was any Chinese government push behind the boycotts of H&M and other companies by Chinese netizens.
In this regard, Foreign Ministry spokesperson Hua Chunying said that there are 1.4 billion people in China, everyone has their own head, their own thoughts, and everyone has the right to express their thoughts and feelings online. As soon as you see that there are some remarks on the Internet that you don't like or don't want to hear, you can't think that the Chinese government demanded and instigated them. This is a serious misunderstanding and prejudice that exists in China. "The merits of this matter are very clear. Chinese and Chinese consumers have the right to make their own choices. ”
This article is an exclusive manuscript of the Observer Network and may not be reproduced without authorization.