Huawei is once again in the spotlight in Europe following reports that Germany may ban some of the Chinese telecom giant’s equipment from its 5G network.
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A German interior ministry document seen by Reuters said that certain suppliers could be prohibited from supplying critical parts if they are deemed to be directly or indirectly under the control of another state government.
An Interior Ministry spokesperson told Reuters that if the rules come into effect, equipment already installed in the network could be removed and replaced with other suppliers.
Huawei has been accused by many governments, especially the United States, of posing a national security threat. The US government has claimed that Huawei has close ties to China’s Communist government and that its network equipment could be used to send data on US citizens to authorities in Beijing.
Huawei has repeatedly denied that it poses a national security threat.
As reported by Reuters, a spokesperson for the Chinese embassy in Germany said late on Tuesday that Huawei operates in accordance with domestic laws and regulations and objects to Germany’s stance.
“In recent years, countries and anti-China forces have continued to try to smear Huawei with trumped-up charges, but there has never been any evidence that Huawei’s equipment or components pose a security risk,” the spokesperson said, according to Google Translate. There was no such thing.” .
“If the reports are true, the Chinese side is extremely embarrassed and deeply dissatisfied with the fact that the relevant departments of the German government have made hasty decisions that are not based on facts.”
An embassy spokesperson claimed that the ban on Chinese equipment in telecommunications networks “violates economic law and the principles of fair competition.”
A Huawei spokesperson told CNBC that the company has a “strong security track record” for more than 20 years in Germany and globally.
“Huawei believes there needs to be an objective and fact-based discussion on how risks in cyberspace can be reduced,” the spokesperson said.
A ZTE spokesperson said the company’s “products remain safe and we have found no evidence to suggest otherwise.”
Germany’s position on Huawei has been at an impasse since the United States under President Donald Trump began a crackdown on the telecommunications equipment giant.
Europe’s largest economy is seeking to balance maintaining business ties with China, its largest trading partner, while taking into account geopolitical considerations.
Germany has sought to strengthen trade ties with China in recent months, with Chancellor Olaf Scholz visiting Chinese President Xi Jinping in November. But there is growing pressure from the United States to take a tougher stance on China when it comes to technology.
A decision to block Huawei from 5G networks would mark a major change from 2019, when the country said it would not make such a move. Since then, Germany has remained silent on the Huawei ban as pressure from the United States intensifies and other countries move to block the Chinese company’s equipment in their networks.
“Under Angela Merkel, Germany has consistently downplayed the risks arising from its close economic relationship with China. This has been particularly evident in the debate over 5G, and after years of political uncertainty, Germany has has resulted in a larger market share than ever before,” said Noah Barkin. He is China editor-in-chief of research firm Rhodium Group, he told CNBC.
“The current administration is in the midst of developing a new approach to China that focuses on reducing dependence and strengthening economic resilience.”
5G is a key technology that is thrust into the middle of a broader battle between the United States and China for technological supremacy. 5G, the latest standard for mobile internet, is seen as essential to support next-generation infrastructure such as self-driving cars, and even has potential military applications.
In 2019, Huawei was placed on a U.S. blacklist called the Entity List. This restricts U.S. companies from exporting certain technologies to Huawei. In 2020, the US moved to cut off Huawei’s supply of key chips needed for smartphones. This destroyed the company’s mobile business.
The US government has been trying to persuade other governments to block Huawei. In 2020, Sweden banned the use of Huawei and ZTE equipment in its 5G network.
In the same year, the UK government also announced a ban on Huawei equipment from 5G networks, telling carriers they must remove the Chinese vendor’s equipment from their infrastructure by 2027.
It’s unclear whether Germany’s rules go that far. But even if it were to happen, it would be expensive and take a long time to complete, Barkin said.
“Even if the government decides to phase out Chinese suppliers from the network, which is not yet clear, it will take the better part of the next decade,” Barkin said.
