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

[June 24, 2019]  By Kanishka Singh, Caroline Stauffer and Sijia Jiang

(Reuters) - FedEx Corp 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 as to why the U.S.-bound handset was returned to its sender, a Britain-based writer for U.S. publication PC Magazine, which later wrote about the matter.

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 also confirmed to Reuters it would not ship to Huawei addresses on the Entity List but had no "general ban" on Huawei products.

A Huawei spokesman told Reuters 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".

A Federal Express truck makes its way down a freeway in San Diego, California August 22, 2014. REUTERS/Mike Blake/File Photo

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.

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.

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.

(Reporting by Kanishka Singh in Bengaluru, Caroline Stauffer in Chicago and Sijia Jiang in Hong Kong; Additional reporting by Huizhong Wu in Beijing; Editing by Marguerita Choy and Christopher Cushing)

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