Amid the United States' increasing sanctions against it, China's Huawei Technologies has revealed plans to move its major research and development centers to Canada. The decision is reportedly part of the company's larger readjustment plans to assure its long-term security and stability.
The founder of the Chinese telecommunications giant, Ren Zhengfei, confirmed the news in an interview in Canada this week and stated that they will indeed be moving their center for research and development to Canada. Additionally, Zhenfei also revealed plans for manufacturing some of its smartphone models outside of China.
The US initially launched its barrage of sanctions against the company back in May, when the ongoing trade dispute between China and the United States officially spilled over into the tech sector. The US Commerce Department started its campaign by placing Huawei under the country's trade blacklist, essentially halting its ability to purchase parts and components from its US-based suppliers.
Last month, the US escalated its sanctions against Huawei with the US Federal Communications Commission approving a new order involving the country's $8.5 billion funds to bolster its telecommunications and internet infrastructure. The order barred the use of the funds for the purchase of equipment and services from Chinese companies it deemed a threat to national security, which included Huawei.
In light of the escalating pressures placed against it, Huawei has been forced to relocate its facilities, including its research and development facilities. This move to Canada will be a big advantage for the country as it will likely generate additional income and more jobs for residents.
Huawei's business in Canada is already contributing a substantial amount to its economy. In 2018, the Chinese firm was estimated to have contributed around $690 million to the country's gross domestic product (GDP).
According to a report published by Oxford Economics, Huawei currently employs around 5,000 full-time workers in Canada. The Chinese firm's various facilities in the country reportedly generated around $204 million in taxes for Canada in the previous year, helping its economy and partly funding its healthcare and education projects.
Economists have stated that Huawei's presence in Canada since 2012 has had a huge impact on its economic growth. Along with the jobs it provides and the taxes it pays, the company also contributes by spending on goods and services from Canadian suppliers.
Huawei Canada President Eric Li previously mentioned in a statement that the company does see Canada as a strategic destination. The company plans to boost its investments in the country, where it has been seeing continued success and growth.
