A Huawei shop in Shanghai Photo: cnsphoto

The US Department of Commerce announced a new rule on Monday allowing American companies to cooperate with Chinese telecommunications giant Huawei on 5G and other standards in the telecoms sector.

Analysts said the move shows that the US has realized the cost of refusing to cooperate with the world's largest patent contributor to the next-generation technology, rather than being a good gesture to relax the crackdown on Chinese tech firms.

Under the new rule, US companies' technologies that would not have required a license to be disclosed to Huawei before the company's placement on the US Entity List in May 2019 can now be disclosed for the purpose of standard development, according to a statement on the Department of Commerce website.

"This action shows that the US hasn't loosened its crackdown on Huawei but is making use of Huawei's leading place in the industry to contribute to domestic 5G development," Ma Jihua, a veteran industry analyst and close Huawei follower, told the Global Times on Tuesday.

US Department of Commerce Secretary Wilbur Ross' rhetoric further reflected some American politicians' narrow-minded "American First" view: "The department is committed to protecting US national security and foreign policy interests by encouraging US industry to fully engage and advocate for US technologies to become international standards."

But the US' squeezing of Huawei from the international supply chain has put US competitors in an inferior position.

In the global industry, Huawei has the highest number of declared 5G patents at 2,386 patent families, followed by LG with 1,388 patent families and Samsung with 1,353 patent families, according to a recent survey conducted by technology research firm GreyB Services Pte and analytics firm Amplified AI Inc. US company Qualcomm comes in at No.5.

Xiang Ligang, director-general of the Beijing-based Information Consumption Alliance, told the Global Times that this shows it would be difficult for Washington to continue its hardline strategy for Huawei due to the company's rising technological strength.

"The US may ramp up efforts to suppress more Chinese tech companies but it doesn't know that external pressure promotes China's technological advancement," Xiang said, noting that China has abundant countermeasures to fight back.

Ma said the US' action will help promote Huawei's business across the world, especially in Europe. Europe is unlikely to reject cooperation with Huawei as the US has backed down.

Early in February, Huawei announced it had obtained 91 5G commercial contracts worldwide, of which over half came from Europe.