BERLIN – The German government decided on Wednesday to allow the use of Huawei’s technology in 5G mobile networks in exchange for guarantees from the Chinese vendor about the safety of its equipment, in a rebuke to the Trump administration.
The bill, which has yet to be approved by parliament, marks a setback for the outgoing US government, which has long lobbied European allies to reject Huawei’s technology. The US claims that Huawei equipment is related to a Trojan horse that, once inside critical infrastructure in the West, can be used by China to spy on and steal sensitive information, posing a security and economic threat to the US and its allies. The company denies those allegations.
In light of the German industry’s dependence on China – the country is Germany’s largest trading partner and the largest market for many German companies – Berlin was reluctant to go with Washington, instead looking for a middle ground that Huawei would be able to do business in Germany, but with enough oversight to appease its wary American ally.
When the government published a draft of the bill earlier this month, German Interior Minister Horst Seehofer said the government wanted to create a legal basis that would eliminate network security concerns, but also keep the market open to competing technologies.
“We have drawn up regulations that allow us to monitor reliability in an appropriate manner. Our security interests played a major role ”, Mr Seehofer told German business magazine Handelsblatt.
Under the bill, network equipment providers would have to provide assurance that their equipment is safe to use, making them financially liable for any breach. The legislation would also require vendors and operators to provide German security services with far-reaching technical and legal resources to safeguard the integrity of the network.
The Trump administration has pressured US allies to join the campaign to promote the emergence of Huawei Technologies Co., China’s most successful international company and the world’s largest producer of telecom equipment with sales of $ 123 billion in 2019. to stop.
President-elect Joe Biden has not yet outlined his stance on Chinese trade or on the Trump administration’s Huawei boycott.
The trade wars between the US and China have put Europe in a dilemma to side with the US or take a position in the middle. The UK and Poland have chosen to participate in the US boycott of Huawei, but France and Germany have decided to follow Huawei’s technology more strictly without actually limiting its growth.
The UK government has banned the purchase of Huawei technology from January, a decision that UK officials said could delay the rollout of 5G wireless technology by several years. The UK is also requiring telecommunications companies to remove Huawei technology from their networks by 2027, a move that would cost about $ 650 million, according to BT Group PLC, the UK telecommunications provider.
The UK government said it will ban wireless providers in the country from buying new Huawei equipment and that the Chinese company should remove its technology from UK 5G networks by 2027. WSJ’s Stu Woo explains the importance. Photo: Tolga Akmen / AFP (originally published July 14, 2020)
A full ban on Huawei could face legal hurdles in Germany, but could also threaten Germany’s significant economic interests in China. In May, the Chinese ambassador to Germany warned that Berlin would have consequences if it banned Huawei, saying, “The Chinese government will not stand by idly.” A third of new car sales in China come from German manufacturers, and China is the largest market for Germany’s major car manufacturers, Volkswagen AG
, Daimler AG
and BMW AG
.
The German car manufacturers rely on the partnership with Huawei for technology for connected car and self-driving cars. Deutsche Telekom AG
, the German telecommunications giant, has closely woven Huawei’s technology into both its 4G and 5G wireless broadband networks, and has even issued warnings from the German network security watchdog in the past.
The German bill now goes to parliament, where Chancellor Angela Merkel is facing some opposition to her refusal to ban Huawei. The Chancellor has lobbied to find such a technical solution that requires all providers to meet strict technology standards and be transparent to network security authorities.
But some in her party, like Norbert Röttgen, chair of the parliament’s foreign affairs committee, are more in line with the US position that Huawei sees as a potential security threat. Mr. Röttgen has said that every Chinese company should work with China’s state security services, which is a source of concern about becoming dependent on Huawei’s technology.
Write to William Boston at [email protected]
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