France’s major newspapers were festooned this month with full-page advertorials paid for by Huawei, with the strapline claiming that the Chinese tech giant was “made in France.”
Huawei’s public relations firms want the “made in Europe” brand to stick to counter concerns expressed by the region’s security experts and politicians that the firm’s 5G and other equipment allows for Chinese government surveillance and possible espionage.
Abraham Liu, Huawei’s top executive for Europe, vowed in February to boost the company’s European manufacturing bases so that “we can truly have 5G for Europe made in Europe.”
But European governments largely aren’t buying Huawei’s latest public relations push, as country after country has recently downgraded its involvement in their 5G network rollouts or imposed de facto bans on its participation.
The United Kingdom announced this week it would purge Huawei from its 5G networks by 2027, while the French government strongly pushed the country’s telecom firms to drop Huawei as a 5G technology provider.
Telecom Italia also decided this month to exclude Huawei from a tender for 5G equipment for its core network in Italy.
“Huawei can see the tide turning in Europe and is pulling out the stops to prevent a significant reduction in its market share,” says Noah Barkin, an expert on Europe-China relations at Rhodium Group, a New York-based independent research outfit.
“This involves a formidable PR campaign which aims to portray the company as European and promises big investments,” as well as negative campaigning including personal attacks on critical journalists and academics, Barkin claimed.
Spokespeople for Huawei declined to comment for this article. But a mid-level official at Huawei’s British offices, who spoke on the condition of anonymity, said that the firm has been taken by surprise at how quickly European states are turning against it.
Over the years, Huawei has repeatedly and strenuously denied that it is a security risk or engages in activities on behalf of China’s communist government. Europe accounts for roughly a quarter of all Huawei’s global sales.
Nonetheless, securocrats worry that Huawei’s technology for wireless networking, including the next generation 5G networks currently under construction, could allow Beijing to eavesdrop on European government, business and private citizens’ communications.
Most likely this would be through so-called “back door” software, which would provide Huawei access to information sent via telecoms networks, especially 5G networks.
There are concomitant concerns that Beijing could block Huawei from exporting equipment and software updates to Europe once the 5G networks are up-and-running, including in the event of a conflict.
Without access to new updates and software to keep the networks operational, European governments would either have to assuage Beijing’s demands or risk considerable economic disruption if their telecoms networks faltered or went down.
The United States, which has already banned Huawei and is now threatening European allies that they could be cut from intelligence-sharing partnerships if they move ahead in using its equipment in their 5G rollouts, is leading the charge against the Chinese firm.
This week Washington said it will impose travel bans on Huawei staff as well as from other Chinese companies that are found to have profited from Beijing’s mass human rights violations against Muslim minorities in its western Xinjiang province.
“We are beyond the point in the political debate where aggressive PR tactics and threats from Huawei or the Chinese government can turn the tide,” says Barkin. “If anything, these are now undermining the company’s case.”
Huawei has good cause to launch a PR offensive. For years, Huawei has denied vehemently that it does Beijing’s bidding.
But when the UK said that it would downgrade Huawei’s involvement in Britain’s 5G network last month, China’s ambassador to London, Liu Xiaoming, retorted that Beijing could respond by pulling billions of dollars of investment from key UK-based nuclear power and high-speed railway projects.
Other European governments have been warned their countries’ companies could face repercussions in the Chinese market if they take a hard line on Huawei, including Germany’s dominant automobile industry, which is heavily invested in China.
“When you have Chinese ambassadors issuing both veiled and direct threats to European governments that business ties with China will suffer if Huawei is excluded from 5G rollouts, I think it´s hard to see the company as ‘made in Europe’,” says Rebecca Arcesati, of the Mercator Institute for China Studies, a Berlin-based think tank.
Richard Turcsányi, program director at Central European Institute of Asian Studies, Palacky University Olomouc in the Czech Republic, noted that in the current geopolitical climate it’s to be expected that more European countries are turning against Huawei.
“This reflects international context of worsening relations between China and the West, including the EU,” he went on. “A number of European countries are experiencing their own incidents in relations with China. This contributes to worsening of trust in Europe vis-a-vis Chinese actors.”
That’s in part because of China’s handling of the Covid-19 pandemic. Many in Europe have bristled at Beijing’s disinformation campaigns, including conspiracy theories that the virus was made in a US military base, as well as at Beijing’s public ridicule of European governments’ poor handling of the health crisis, which originated in China.
The continent was also peeved when many “donated” face masks and other medical equipment from China turned out to be defective.
Beijing’s imposition of direct rule over Hong Kong has also stirred condemnation in certain European capitals, considering that the UK was supposed to uphold the city-state’s political autonomy until 2047
Some European politicians have gone as far as to say that Beijing has now “lost Europe,” as Reinhard Buetikofer, chair of the European Parliament’s delegation for relations with China, said in April.
None of Europe’s largest economies, the UK, France and Germany, has so far explicitly banned Huawei from participating in their 5G network build-up. But most are quickly moving towards de facto bans, often putting the burden of the decision onto their respective telecom firms.
This month, the UK and France confirmed that they will be drastically downgrading Huawei’s involvement in their 5G networks in the coming years.
London has been more overt about its Huawei separation, pledging a phasing out of its technology by the end of the year and its equipment purged completely from British telecoms networks by 2027. This is chiefly because of rising pressure from the US and from the governing Conservative Party’s increasingly anti-Beijing backbench parliamentarians.
The Czech Republic, Romania, Poland, Latvia and Estonia have already issued joint statements with the US that point towards a de-facto ban on Huawei technology.
According to statements made by US President Donald Trump in mid-July, his pressure on the UK played a major role in London’s decision. “I talked many countries out of using it: if they want to do business with us, they can’t use it,” he said in reference to Huawei.
Paris is predictably being more subtle. It has not said outright that it wants to phase out Huawei, but it is simultaneously offering incentives to its domestic operators to do so.
“It won’t be a total elimination, but there will be far fewer Huawei [parts] in the future network,” French lawmaker Eric Bothorel said according to media reports.
France’s two telecoms giants, Bouygues Telecom and Altice’s SFR, are already heavily dependent on Huawei technology. Some estimates suggest half of their network equipment is made by the Chinese firm.
Huawei’s equipment also comprises roughly 70% of Germany’s 4G network.
French telecos will still be allowed to use Huawei technology for between another three to eight years, but only for the least sensitive areas, mainly “non-core” parts of the 5G network.
France’s cybersecurity agency, Anssi, has also said that French telecos will be able to use Huawei equipment on a limited basis for between three and eight years. Analysts say that telecom firms won’t invest heavily in Huawei technology if it has to be replaced in eight years.
In other words, Paris doesn’t want to be seen as forcing its telecoms firms to drop Huawei, but is creating enough confusion that it will be the most probable end result.
Belgium has also recently capped Huawei’s involvement it’s future 5G network to 35%, and then only in the least sensitive parts – those not in the “core” network. The Netherlands last year banned Huawei equipment from being used in the “core” part of its 5G network.
Arcesati, of the Mercator Institute for China Studies, says that Italy is a key country to watch.
Not only did Huawei pledge last year to invest billions of dollars in cash-strapped Italy by 2021, the Chinese firm is heavily investing in “smart-city” projects and partnerships in research and development across the country.
Last year, the then-Italian prime minister was given powers to arbitrate over non-EU vendors for 5G technology, and reports emerged this month that the current premier, Giuseppe Conte, is reviewing Huawei contracts, though that hasn’t been officially confirmed.
But Telecom Italia has decided to exclude Huawei from the tender process for 5G equipment for its core network in Italy and Brazil.
In Italy, the dominant coalition partner, the Five Start Movement, is generally pro-Beijing. But its government partners, mainly the Democratic Party, are pro-US and “believe that Huawei poses risks for national security which must be taken seriously,” said Arcesati.
“I think 5G is really where the tension between Atlanticist and China-friendly forces within the coalition government is going to heat up,” she added.
Barkin, of Rhodium Group, says that Germany is Europe’s big question mark, given its status as the continent’s dominant economy and with its government still vacillating on whether to get tougher on China.
“But there, too, the political debate has been trending for some time towards a substantial reduction in Huawei’s presence, and perhaps a complete phase-out over time,” Barkin added.
Apart from the Huawei issue, German Chancellor Angela Merkel has faced intense and rising pressure for her less than forceful stance on Beijing’s perceived transgressions.
Some analysts reckon Berlin’s hesitance to criticize China has sown division and uncertainty within the European Union (EU), especially as Germany recently took over the European Presidency, which rotates every six months.
According to Arcesati, it is unlikely that other major European states, including Spain, Austria and Portugal, which have all remained open to Huawei so far, will change their stance unless Berlin does so first.
“[Merkel] seems to be putting the interests of the German industry in the Chinese market – the powerful car industry in particular, in my view – ahead of Germany´s national security, despite backlash from her own coalition,” says Arcesati.
Indeed, Beijing has hinted that German car firms – the country’s most vital industry – now active in China could be affected if Berlin decides against Huawei.
François Godement, a senior advisor for Asia at the Institut Montaigne in Paris, noted in a paper published in June that while China has not retaliated against American companies after imposing measures against Huawei, it has often threatened to do so against European states.
“The differences of treatment reflect the appreciation by China’s leaders of relative strength in these cases,” Godement wrote.
“To this, one should add the hard power competition,” he added. “After everything has been said about the rise of the Chinese military, the Pentagon and the US military presence on China’s periphery remain the most tangible obstacle to China’s further rise as a global military power.”
Moreover, he noted, the US federal government “has powers that the European Commission can only dream of.”
As such, Europe’s political winds are clearly blowing away from Huawei. Josep Borrel, the EU’s foreign affairs chief, has said the continent has lost its naivety about China in recent months, although French President Emmanuel Macron has said it was lost last year.
Security hawks have since gained ground in the debate, quieting those politicians and commentators who last year claimed opposing Huawei was exaggerated, an unnecessary risk to the economy or thinly veiled anti-Chinese racism.
In January, the EU published its “5G toolbox”, a set of guidelines for member states for how they should prioritize security concerns for their new networks.
This has “persuaded many member states that national security takes precedence over economic considerations of a faster and cheaper rollout,” said Arcesati.
Even the security agency of Hungary – one of the most pro-Beijing states in Europe and with an authoritarian government that has forced the EU to tone down statements critical of China – openly admits the security risks of Chinese technology.
Its National Security Strategy, issued in April 2020, notes that economic cooperation with China must consider “the exposure risks arising from China’s investment in critical infrastructure, its emergence as a potential supplier of state-of-the-art information and communication technology and, in general, its regional influence.”
Last year, a British security committee gave the thumbs-up to Huawei’s involvement in the UK’s 5G network and even asserted that displacing Huawei would, in fact, make 5G networks less secure, as it would make the UK’s network overly reliant on Ericsson and Nokia, two European telecoms firms that are developing 5G technology.
The UK’s case reveals Washington’s role in the anti-Huawei backlash. The US threatened a major diplomatic spat with the UK, its closest ally in Europe, after British Prime Minister Johnson refused to budge on the Huawei issue before flip-flopping in January.
Analysts reckoned that Washington’s lobbying of European countries to drop Huawei last year was largely ineffective with only the likes of Poland and Estonia, two countries reliant on NATO and US security, joining America’s tech war crusade.
But the Trump administration appears to have been more bullying of late. Earlier this year, US Vice President Mike Pence warned that unless the UK changed its policy on Huawei, it could affect a post-Brexit trade deal with the US, Britain’s largest trading partner, after it left the EU.
Months later, US ambassador Richard Grenell reportedly said that if European firms use an “untrustworthy vendor” for their 5G network, then Washington could respond by removing them from intelligence sharing networks.
At the same time, the Covid-19 pandemic has emboldened European fears that their continent’s strategic and important firms are losing out to US and Chinese competition, and the region’s vital sectors risk being bought out en masse by non-European firms.
Several European governments have stepped in to stop Chinese investors from buying out major European firms, while the EU last year finalized rules on so-called “screen mechanisms” so that member states can review takeovers of strategic European firms by outside investors, namely Chinese.
The continent already has two European telecom giants – Finland’s Nokia and Sweden’s Ericsson – that can build 5G networks without the security risks associated with Huawei. Both European firms are ready to “immediately deploy the fully fledged 5G,” European Commissioner for Internal Markets, Thierry Breton, said in January.
There is a sense in Europe that the continent’s view of China has fundamentally changed since just January, but there is no clear idea about what the policy response should be.
“Many EU member states are … internally divided between security circles and economic stakeholders,” Godement wrote last month.
Or, he added, they either have overbearing commercial interests in the Chinese market, mainly Northern and Western European states, and those expecting investment from China, chiefly states in the south.
Whereas the UK was quick to admonish China for imposing its national security law over Hong Kong – which it handed over to Beijing in 1997 and whose political autonomy London was supposed to uphold until 2047 – other EU states, including France and Germany, have been muted on the Hong Kong issue.
Brussels is only likely to offer asylum to Hong Kongers and has significantly toned down its rhetoric since last month when Commission President Ursula von der Leyen warned Beijing it would suffer “very negative consequences” if it went ahead with its plans for Hong Kong.
Some observers see European governments as being far better at “defensive” measures, such as preventing Chinese takeovers of strategic European firms, than “offensive” ones, like sanctioning Chinese officials over human rights violations in Xinjiang.
In this analysis, banning Huawei from their 5G networks is strictly defensive, though it shows Beijing that Europe is ready to act on its claims of “strategic autonomy” to protect its own security.
Matthew Pottinger, the US deputy national security adviser, in January asked the audience of the Raisina Dialogue, a multilateral conference held annually in New Delhi, to imagine a conversation in the 1980s between the UK and US leaders at the time, Ronald Reagan and Margaret Thatcher.
Could you imagine, Pottinger queried, that Thatcher would turn to Reagan and say: “You know, I think we should have the KGB come and build all our telecommunications and computer network systems, because they are offering a great discount?”
At the time, that sounded like an over-the-top analogy. But in the wake of the pandemic and indications that a new Cold War could be fought in various technological realms, the comparison seems less so by the day.