In Case You Missed It: "Why a Chinese Company Finally Decided to Pull Back from Iran"

In Case You Missed It: "Why a Chinese Company Finally Decided to Pull Back from Iran" Why a Chinese Company Finally Decided to Pull Back from Iran By Mark D. Wallace CNBC.com December 20, 2011 While the international movement to pressure companies into leaving Iran has had a great deal of success over the past few years, there is one argument that seems to never go away. For years now, Western firms have attempted to justify their business in Iran by claiming that if they were to pull out, their competitors from other countries-notably China-would rush in to fill the vacuum. The prevailing wisdom is that Chinese companies and lawmakers in Beijing do not lose much sleep over Iran's illegal nuclear weapons program, its sponsorship of global terrorism, or its egregious human rights record. Yet now, in a move that could change the entire dynamic on the drive to economically isolate Iran's regime, one Chinese company has done the unthinkable, and chosen to voluntarily stop pursuing new business activities in Iran. The company, Huawei Technologies Co., is the world's second-largest supplier of telecommunications equipment, and until recently has maintained a robust, 1000-employee presence in Iran. In an unprecedented step, Huawei in a December 9 statement said that "Due to the increasingly complex situation in Iran, Huawei will voluntarily restrict its business development there by no longer seeking new customers and limiting its business activities with existing customers." Huawei had a particularly compelling reason to pull back from Iran: there was clear evidence of Iran abusing foreign telecommunications technology to crack down on dissidents and other opponents of the ruling mullahs in Tehran. Many in fact argue that the regime's manipulation and abuse of mobile technology is all that has kept the Arab Spring from spreading to Iran. While telecom companies like Huawei may not intend for Iran to misuse their technology, the products inevitably get used for the regime's nefarious activities including its ongoing campaign of terror against its own people. A spokesman for the U.S. State Department applauded Huawei's decision, adding that the U.S. "calls on all firms to exercise vigilance when doing business with Iran and ensure that any business does not contribute to the Government of Iran's ability to repress its own people." While Huawei unfortunately did not decide to fully pull out of Iran, one should not underestimate the importance of its move to stop pursuing new contracts. For the first time, a major Chinese business has joined the worldwide movement to isolate Iran, and in so doing, has helped send a message around the world that Iran is off limits to responsible businesses. Some have interpreted Huawei's decision as an attempt to curry favor in larger, more important markets such as the United States. And while there may have been other factors that influenced Huawei's decision, this was not just a raw calculation based on market share and profit. I speak from personal experience on this point, as my colleagues at United Against Nuclear Iran (UANI) and I participated in weeks of substantive discussions with Huawei representatives, all of whom took seriously the concerns raised about Iran's nuclear weapons program, its well-known sponsorship of organizations like Hezbollah and Hamas, and, of course, the potential danger that Huawei technology was being used by the Iranian government to oppress its own citizens. Further, even if Huawei did do this just to placate American lawmakers, that would not be meaningless, but a sign of the effectiveness of sanctions and corporate responsibility campaigns, even when they target the Chinese. Ultimately, Huawei acknowledged that its business model had to change, and was mindful of how its brand would be perceived in the eyes of the public. In commenting on this new dynamic, one Huawei executive told the press, "As we transform our business and broaden our customer base away from just operators, we need to consider other things and may start taking a slightly different approach." Huawei's decision is already having a ripple effect. Just five days after the company's announcement, Nokia Siemens Networks announced that it too would gradually reduce existing commitments, effective January 1, 2012. The Huawei case has disproved the pessimistic thought that it is pointless to engage Chinese companies on issues such as proliferation and human rights. Clearly, a Chinese company IS capable of making a conscientious and responsible decision. More importantly, this event has completely debunked the argument used by irresponsible Western companies still operating in Iran, that leaving would just result in Chinese companies moving in to fill the void. Putting pressure on the government of Iran to change course from the dangerous path it has been on now for years is the shared responsibility of governments, companies, and concerned citizens everywhere. Prior to Huawei's decision, most considered "everywhere" to apply in practice only to Western countries. That "everywhere" now also includes China is a most welcome development, one that will hopefully be replicated by Huawei's counterparts in the near future. _________________________ Mark D. Wallace is president of United Against Nuclear Iran. He served as U.S. Ambassador to the United Nations, Representative for U.N. Management and Reform. Click here to read the piece on CNBC.com. Click here to read coverage of UANI's success with Huawei in The Wall Street Journal, Financial Times, and Reuters. ### United Against Nuclear Iran (UANI) is a program of the American Coalition Against Nuclear Iran, Inc., a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. The prospect of a nuclear-armed Iran should concern every American and be unacceptable to the community of nations. Since 1979 the Iranian regime, most recently under President Mahmoud Ahmadinejad's leadership, has demonstrated increasingly threatening behavior and rhetoric toward the US and the West. Iran continues to defy the International Atomic Energy Agency (IAEA) and the United Nations in their attempts to monitor its nuclear activities. A number of Arab states have warned that Iran's development of nuclear weapons poses a threat to Middle East stability and could provoke a regional nuclear arms race. In short, the prospect of a nuclear armed Iran is a danger to world peace. United Against Nuclear Iran (UANI) is a non-partisan, broad-based coalition that is united in a commitment to prevent Iran from fulfilling its ambition to become a regional super-power possessing nuclear weapons. UANI is an issue-based coalition in which each coalition member will have its own interests as well as the collective goal of advancing an Iran free of nuclear weapons. The Objectives of United Against a Nuclear Iran Inform the public about the nature of the Iranian regime, including its desire and intent to possess nuclear weapons, as well as Iran's role as a state sponsor of global terrorism, and a major violator of human rights at home and abroad; Heighten awareness nationally and internationally about the danger that a nuclear armed Iran poses to the region and the world; Mobilize public support, utilize media outreach, and persuade our elected leaders to voice a robust and united American opposition to a nuclear Iran; Lay the groundwork for effective US policies in coordination with European and other allies; Persuade the regime in Tehran to desist from its quest for nuclear weapons, while striving not to punish the Iranian people, and; Promote efforts that focus on vigorous national and international, social, economic, political and diplomatic measures. UANI is led by an advisory board of outstanding national figures representing all sectors of our country.

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