Chinese Tech Giant Sounds Alarm Over Finances As US-China Tensions Boil, Threatening Cash Flow

In a staff email, the founder of China's Huawei Technologies Co Ltd expressed its shift of focus from pursuing scale to ensuring profits and cash flow as the global economy enters a prolonged recession, Reuters reports.
"With survival the main principle, marginal businesses will be shrunken and closed, and the chill will be felt by everyone," founder Ren Zhengfei's email read.
He reportedly drew attention to the importance of the company's traditional focus on information and communications technology (ICT).
He cited the company's cloud computing, digital energy, and smart car businesses as prospective areas for development.
However, he expressed uncertainty over Huawei's outlook beyond the next couple of years.
The U.S. put Huawei on an export blacklist in 2019, restricting access to critical technology citing national security concerns.
The U.S. continues to restrict China's other chipmakers' access to cutting-edge semiconductor technology, citing similar concerns.
The U.S. also recently launched a Chips Act restricting investments and expansion in China.
China opposed the U.S. Chips Act and assured aggressive countermeasures.
Huawei's clocked a 52% drop in its first-half profit to 15.08 billion yuan, as economic slowdown, COVID-19 resurgence, and supply chain challenges weighed on the business.
Alibaba Group Holding Limited BABA, which serves as a barometer for the country's tech industry, clocked flat revenue growth in the first quarter to $30.69 billion, beating the consensus of $30.05 billion.
Photo via Wikimedia Commons

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