Huawei quits 3Leaf buy, but stay tuned for more

Huawei has made it official: it’s abandoning its $2 million purchase for technology from a small US company called 3Leaf Systems after it became obvious the deal was becoming a lightning rod for anti-China sentiment in the US. But don’t think that this is the end. Huawei’s crosstown rival ZTE (HKEx: 763) recently lost a similar bid to supply telecoms equipment to build Spint’s (NYSE: S) 4G network, and expressed similar disappointment but said it wasn’t giving up on the market. And both of these companies are right. All this pettiness on the part of publicity-seeking US lawmakers is bound to backfire eventually, prompting Americans and other Westerners to ask just how much of a threat these deals really pose. That, coupled with pressure likely to come from China, could mean that Chinese m&a and other deals in the US for all but the most sensitive of assets could finally start to gain some steam in the next year or so. But whether or not they will succeed is another question entirely.