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FedEx confirms Huawei mail ban as new 'mistake' reignites Chinese ire

Published 06/24/2019, 12:30 PM
Updated 06/24/2019, 12:30 PM
© Reuters. FILE PHOTO: Federal Express truck makes its way down a freeway in San Diego, California

© Reuters. FILE PHOTO: Federal Express truck makes its way down a freeway in San Diego, California

By Kanishka Singh and Sijia Jiang

(Reuters) - FedEx Corp (NYSE:FDX) has apologized for another Huawei delivery "mistake," reigniting Chinese ire and drawing the fire of state media which suggested the U.S. delivery firm could end up on China's upcoming list of companies that harm national interests.

The firm on Sunday said it returned a package - identified as containing a Huawei phone - due to an "operational error," and that it would deliver all products made by Huawei Technologies Co Ltd to addresses other than those of Huawei and affiliates placed on a U.S. national security blacklist.

China's foreign ministry on Monday nevertheless asked for a full explanation. Technology news outlet PCMag, formerly known as PC Magazine, reported that its writer in Britain had attempted to send a Huawei P30 handset to a colleague in the United States. Fedex returned the phone and told the sender that it could not deliver the package because of a "U.S. government issue" with Huawei and the Chinese government, PCMag reported.

The incident comes as Chinese authorities investigate FedEx for misrouting packages sent by Huawei last month. Meanwhile, China is also drawing up an Unreliable Entities List of foreign firms, groups and individuals.

The list mirrors the U.S. Entity List that Huawei was added to in May, essentially barring it from buying U.S. technology upon which it was heavily reliant. The U.S. added more Chinese entities to the list on Friday.

The Beijing News, a municipal government-run newspaper, in an editorial on Monday, said FedEx had misinterpreted the U.S. ban and called on U.S. firms to be "rational" and not to over-react.

FedEx rival United Parcel Service Inc (NYSE:UPS) also confirmed it would not ship to Huawei addresses on the Entity List but had no "general ban" on Huawei products.

A Huawei spokesman said the Chinese firm was not currently using either FedEx or UPS services. On Sunday, Huawei tweeted it was not within FedEx's right to prevent the delivery and said the courier had a "vendetta."

UNRELIABLE

The latest incident sparked renewed criticism of FedEx on Chinese social media, with the topic "FedEx apologizes again" trending on Weibo, China's Twitter-like microblog platform.

State-run newspaper Global Times on Sunday tweeted that FedEx is likely to be added to China's Unreliable Entities List.

Neither China's commerce ministry nor FedEx responded to Reuters' requests for comment on the likelihood of FedEx being added to the list. State news agency Xinhua previously said authorities' investigation into FedEx misrouting Huawei packages should not be regarded as retaliation.

Being in the "crosshairs" of the Chinese government "is a tremendous headwind and risk" for FedEx, Trip Miller, said managing partner at Memphis-based Gullane Capital Partners, which holds a FedEx position valued at roughly $7 million.

"Can you imagine if FedEx was banned from doing business? China could get our attention pretty quick if it did something like that," said Miller, adding that such a move would significantly disrupt global trade networks.

FedEx's operational error comes against a backdrop of increasing tension between the world's two biggest economies. The United States and China have been engaged in a trade fight for nearly a year on issues such as tariffs, subsidies, technology, regulations and cyber security.

© Reuters. FILE PHOTO: Federal Express truck makes its way down a freeway in San Diego, California

A telephone call between U.S. President Donald Trump and Chinese President Xi JinPing last week, as well as confirmation the two will meet in Japan on the sidelines of a Group of 20 summit, have rekindled hopes of a detente.

Latest comments

Any article that has China or Xi written on it gets a response by David Wong or another name such as Chang, Bang, Wang. I'll bet my life savings on it.
Because they know China and Xi much better than those brainwashed.
Says Mr. Zou living in America.
If China were to ban FedEx and tell other nations to not do business with their blacklist, it will collapse FedEx.
It’s not a miss, instead it’s an intentional, deliberate and painstaking rerouting back.
every Chinese friends who have lived in USA for 40 years more or less are so nationalistic. Why? you have to learn to admit your wrong doings which makes good people.
The issue is “nationalistic”. Which nation - US or China. If you think ISIS is right you go to syria and ****americans. In a democracy that is called treason. If you fight to end discrimation with the democratic framework, then it is ok. By same token. If you feel IP theft from USA is correct and will facilitate it, then it is treason. If you legislatively lobby on any US action you think incorrect then it is okay democratically. I hope after 40 years living in a democratic society they understand the norms by which a democracy operates.
1 package, really? Fed Ex should stop shipping all of it and let them find their own way to ship stuff here.
Oh wow, wonder how much Fed Ex profits from Chinese trade, whoops!  The US is not immune to its actions against others.
It looks to me US was looking to steal Huawei's technology. My bet is that they wanted to get the phones, unassembled them to see copy Huawei's technology. This for sure will lead China to blacklist FedEx it they can see proves that US directed this.
dream on
The parcel from Huawei was delivered to the US "by accident" (under the order of CIA)
Now everyone clear who steal whose intelligence technology
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