Germany has sought a solution that would allow Huawei to do business in the country but with enough monitoring to appease the U.S.
Photo: filip singer/ShutterstockBERLIN—The German government Wednesday moved closer to allowing the use of Huawei’s technology in 5G mobile networks, giving the Chinese company a small victory on a European continent increasingly aligned with the Trump administration’s anti-Huawei views.
A bill approved by Chancellor Angela Merkel’s cabinet that would allow Huawei’s continued presence in Germany still requires parliamentary approval. But it already marks a setback for the outgoing U.S. administration, which has lobbied European allies to reject Huawei’s technology.
The U.S. claims that Huawei gear is akin to a Trojan horse that once inside critical infrastructure in the West can be used by China to spy and steal sensitive information, posing a security and economic threat to the U.S. and its allies. The company denies the allegations.
The White House arguments initially failed to sway European governments, which also faced lobbying from wireless carriers that said Huawei often offered the most advanced cellular-tower equipment at the lowest price. But sentiments changed this year. European politicians, unpersuaded by Huawei’s argument that it is an employee-owned company free of Beijing’s influence, grew more wary of the Chinese government after its crackdown on Hong Kong’s protesters and its response to the coronavirus pandemic.
The European Union this year recommended that its members restrict equipment from high-risk 5G suppliers. The guidelines didn’t cite Huawei by name, but implementing them would effectively ban the company from the countries. Several nations, including Finland, France, Poland, Romania and Sweden, have moved to implement such restrictions, though Huawei is challenging the measures in courts across Europe.
The biggest victory in the U.S. lobbying campaign against Huawei came in the U.K., which has banned the purchase of Huawei’s technology beginning in January. British officials said their decision could delay the rollout of 5G wireless technology by several years. The U.K. is also requiring telecommunications companies to switch out Huawei technology from their networks by 2027, a move that BT Group PLC, the British telecommunications provider, has said would cost it about $670 million.
Huawei, meanwhile, has notched victories in countries including Hungary and now Germany. But access to those markets may be moot if the Chinese company doesn’t survive another prong of the U.S. campaign: Commerce Department restrictions that prevent semiconductor companies around the world from selling Huawei the supplies it needs to make 5G equipment.
Huawei has said that the restrictions could affect its ability to make smartphones, not 5G equipment. Analysts and telecom executives said that without access to such supplies, Huawei may not be able to make 5G cellular antennas—which each require several advanced computer chips—that are suitable for wireless carriers.
The U.S. is offering loans to foreign nations and wireless carriers to avoid Huawei and buy instead from Huawei’s major competitors—Sweden’s Ericsson AB, Finland’s Nokia Corp. and South Korea’s Samsung Electronics Co. U.S. officials are also trying to spur American startups to develop 5G-infrastructure technology using open-standard software. The U.S. offensive against Huawei has also created an opening for Japanese telecom-equipment companies.
President-elect Joe Biden’s transition team declined Wednesday to comment on his position on Huawei.
Earlier this year, Antony Blinken, who then was serving as senior adviser for foreign policy for Mr. Biden’s campaign, told Reuters in an interview that Mr. Biden would try to use the North Atlantic Treaty Organization to address Chinese threats, including Huawei’s efforts on 5G communication networks in Europe. Mr. Blinken is now Mr. Biden’s pick for secretary of state.
Analysts and industry officials have predicted that Mr. Biden would keep many of Mr. Trump’s policies related to Chinese technology in place. During the campaign, Mr. Biden and his advisers said he was concerned about China using technology to advance state control, rather than empower citizens.
Despite its challenges, industry-leader Huawei increased its share of revenue in the telecom-equipment market to 30% in the first three quarters of 2020, compared with 28% for all of 2019, according to research-firm Dell’Oro Group. That was driven by efforts to build a nationwide 5G network in China, where Huawei dominates the market.
Chinese officials have suggested that businesses in the U.K. and Sweden, two countries where the debate over banning Huawei played out in public, could face retaliation in China.
In light of German industry’s dependence on China—the country is Germany’s largest trade partner and the biggest market for many German companies—Berlin has been reluctant to saddle up with Washington. Instead, it has sought a middle ground that would allow Huawei to do business in Germany but with sufficient monitoring to appease its wary U.S. ally. Although Germany is among the wealthiest nations of Europe, it lags behind its peers in high-speed internet infrastructure, which makes a fast and comprehensive 5G rollout more critical for businesses and households.
When the government published a draft of the bill earlier this month, German Interior Minister Horst Seehofer said that the government sought to create a legal basis that would address network-security concerns but also keep the market open to competitive technologies.
“We’ve created regulation that allows us to monitor trustworthiness in an appropriate fashion. Our security interests played a big role,” Mr. Seehofer told the German business daily Handelsblatt.
Under the bill, networking-equipment vendors would have to give assurances that their gear is safe to use, making them financially liable for any breach. The legislation would also require vendors and operators to give German security agencies far-reaching technical and legal means to monitor the network’s integrity.
The U.S.-China trade wars have left Europe in a quandary over whether to side with the U.S. or stake a position in the middle. The U.K. and Poland have opted to join the U.S. boycott of Huawei, but France and Germany have decided to be more rigorous about monitoring Huawei’s technology without actually imposing any restrictions on its growth.
The U.K. government has banned the purchase of Huawei’s technology beginning in January, a decision that British officials have said could delay the rollout of 5G wireless technology by several years. The U.K. is also requiring telecommunications companies to switch out Huawei technology from their networks by 2027, a move that BT Group PLC, the British telecommunications provider, has said would cost it about $650 million.
An outright ban on Huawei could face legal hurdles in Germany but also threaten Germany’s considerable economic interests in China. In May, the Chinese ambassador to Germany warned that Berlin would face consequences if it banned Huawei, saying, “The Chinese government will not stand idly by.” A third of new car sales in China are from German manufacturers and China is the largest single market for Germany’s big auto makers Volkswagen AG , Daimler AG and BMW AG .
Germany’s auto makers rely on cooperation with Huawei for connected-car and self-driving auto technology. Deutsche Telekom AG , the German telecommunications giant, has closely woven Huawei’s technology into both its 4G and 5G wireless broadband networks, even prompting warnings in the past from the German network-security watchdog.
The German bill now goes to parliament, where Chancellor Angela Merkel faces some opposition to her refusal to ban Huawei. The chancellor has lobbied for finding such a technical solution that would require all providers to pass strict technology standards and be transparent to network-security authorities.
But some in her party, such as Norbert Röttgen, chairman of parliament’s foreign affairs committee, are more aligned with the U.S. position that sees Huawei as a potential security threat. Mr. Röttgen has said that any Chinese company is required to work with China’s state security services, which is the source of concern about becoming dependent on Huawei’s technology.
—Tarini Parti contributed to this article.
Write to William Boston at william.boston@wsj.com and Stu Woo at Stu.Woo@wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
December 17, 2020 at 01:24AM
https://ift.tt/34gydmS
Huawei Gets Conditional Green Light in Germany as Government Approves Security Bill - The Wall Street Journal
https://ift.tt/3eIwkCL
Huawei
No comments:
Post a Comment