China says US needs to correct 'wrong actions' for talks

Insists negotiations can only continue on the basis of equality and mutual respect

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 the growing list of global companies which have said they are disengaging from Huawei Technologies, 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 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.