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Huawei Triumphs Over Sanctions With New Growth Strategies

After years of battling U.S. sanctions, China’s Huawei is set to announce a strong recovery, driven by advances in software, chip production, and smart-driving tech. The company expects to report 860 billion yuan ($118 billion) in revenue for 2024, nearly matching its 2020 peak of 891 billion yuan, despite challenges from chip shortages and U.S. restrictions that slashed consumer business revenues.

Once in “survival mode” due to U.S. sanctions, Huawei has adapted by diversifying into new sectors and developing alternatives to Western technologies. The company has regained momentum, with founder Ren Zhengfei confirming that concerns over China’s reliance on foreign chips and operating systems have eased.

In the consumer space, Huawei shipped over 45 million smartphones in 2024, a 25% increase from the previous year. Despite ongoing constraints in chip yield rates, the company’s consumer business is back on track. Additionally, Huawei’s ventures into the automotive market, notably its collaboration with Dongfeng-backed Seres on Aito-branded cars, have seen impressive sales growth.

Huawei’s innovation extends beyond mobile devices. Having developed its own HarmonyOS to replace Android, the company has also ventured into autonomous driving, supplying advanced tech to electric vehicle makers like Chery, BAIC, and SAIC. This positions Huawei as a prominent player in China’s electric vehicle revolution, with plans to integrate AI into its industrial services and expand its software ecosystem across connected devices.

While its access to Android remains limited, Huawei is aggressively expanding its presence in markets such as the Middle East and Southeast Asia, with a recent launch of the Mate XT foldable smartphone in Malaysia. Its international presence may be patchy, but in markets where it can offer an alternative AI infrastructure, Huawei could dominate.

Bank Of England Holds Rates At 3.75% In Split Vote As Inflation Risks Rise

The Bank of England kept its benchmark interest rate at 3.75% on Thursday, but the decision was not unanimous. In a 6-3 vote, the Monetary Policy Committee kept rates unchanged, while three members backed a 25-basis-point increase to 4%. Renewed energy price pressures have added to concerns that inflation could remain elevated.

Inflation Pressures Remain

Policymakers said inflation “is likely to rise further over coming quarters,” citing higher and more volatile crude oil and refined energy prices since the conflict began.

So far, there has been “little evidence” of significant second-round effects, such as broader wage and price increases. Inflation risks, however, are now “tilted to the upside” and have increased since the July Monetary Policy Report.

Energy Prices Add To Inflation Risks

Brent crude has risen 36% since July, reaching $106 a barrel on Sept. 14, while UK wholesale gas prices increased 78% to 207 pence per therm.

Higher energy costs can feed into transport, production and household expenses, raising costs across supply chains. Refinery pressures have also pushed crack spreads, the difference between refined fuel and crude prices, well above pre-conflict levels.

Economy Shows Resilience

Despite the inflation risks, UK economic activity has held up slightly better than the Bank expected. A softer labor market and higher borrowing costs are expected to help reduce inflation over time.

Previous monetary tightening is still working through the economy, according to policymakers. So far, the latest energy shock has not produced clear evidence of a broader wage-price spiral.

Major Central Banks Take Different Paths

The decision comes during a busy period for global monetary policy. The Federal Reserve raised rates Wednesday to 3.75%-4% in its first increase since 2023, while the European Central Bank recently lifted its deposit rate to 2.5%.

The Bank of Japan is due to announce its decision Friday, with markets expecting a rate increase. Thursday’s split vote shows that pressure for tighter policy remains within the Bank of England’s Monetary Policy Committee.

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