The gloom surrounding Huawei ever since its blacklisting by the US has been pierced by a ray of Russian sunshine this week, as the Chinese company announced it’s signed a 5G development deal with MTS, Russia’s biggest mobile operator. Timed to coincide with a three-day visit by Chinese president Xi Jinping to Moscow, the deal signals a desire for a closer relationship between the two Asian powers, and it unites the fates of two of their respective leading companies. Russian leader Vladimir Putin, quoted by his national news service TASS, has said that cooperation between Russia and China is now “at an unprecedently high level,” and the sentiment has been echoed by president Xi. Both countries appear to be finding comfort from American aggressions in each other’s arms.
For Huawei, securing this deal is a welcome reprieve from the torrent of bad business news that was triggered by US president Trump’s harsh rebuke and prohibition. This Monday, it was revealed that Huawei is selling off its undersea cable business, which analysts interpreted as being at least partially motivated by the increasing toxicity of the Huawei brand. At the same time, Huawei is also reducing smartphone production orders with Foxconn, owing to its loss of the Android license from Google that allows it to ship devices with preloaded Google apps and services.
On the 5G front, Japan’s SoftBank has opted for Nokia and Ericsson equipment instead of Huawei, which had been a provider of 4G infrastructure for the carrier. The tumult in Huawei’s business-to-business relations looks set to continue for a while, but for today at least, the company has a significant new agreement to celebrate. As its founder Ren Zhengfei said in an interview in February, “If the lights go out in the West, the East will still shine [...] America doesn’t represent the world. America only represents a portion of the world.”