Location China China

US and China escalate Huawei feud in Europe with warnings to Germany and Poland

by Josephine Ma

Beijing and Washington have expanded their Huawei war in Europe, with ambassadors escalating the dispute over the Chinese telecoms giant.

In the latest flare-up, US ambassador to Berlin Richard Grenell sent a letter to the German minister for economic affairs and energy, Peter Altmaier, warning that Washington would scale back its intelligence sharing with long-time ally Germany if Huawei’s technology and equipment were used for its 5G network, The Wall Street Journal reported.

Germany announced this month that it would not exclude any company from bidding on 5G contracts.

In neighbouring Poland, Chinese ambassador to Warsaw Liu Guangyuan warned that abandoning Huawei would come at a steep cost to the country.

“If Poland abandons Huawei, it will cost 8.5 billion euros (US$9.6 billion) in losses to the Polish economy, and communication costs for the Polish people will more than double,” the ambassador told the state-run Chinese tabloid Global Times.

In addition, “the 5G network construction process will be delayed by two to three years,” Liu said.

Relations between the countries have been strained by the arrest in Warsaw in January of Huawei’s sales director in Poland and a former Polish senior intelligence agent on suspicion of spying.

The two can legally be held for three months, and Polish authorities have until April 12 to decide whether to pursue the charges.

China’s relations with Poland, the home of Huawei’s European headquarters, are expected to be hit hard if the case proceeds.

“The Polish telecoms industry has developed rapidly thanks to Huawei Technologies and other companies,” Liu said. “As the Chinese company is in the leading position in the 5G sector with both technology and cost advantages, it is the best partner for European countries in embracing the 5G era.”

“In fact, Huawei poses no risk to Poland, and network security is a technical question, not a political question,” he added.

The United States continues to put pressure on European countries to scrap network services from Huawei, citing security concerns.

A US embassy spokesman in Germany would not provide details of the diplomatic communication between the American ambassador and the German government, but he said Washington would adjust its information sharing with allies if they used “untrusted vendors”.

“To the extent there are untrusted vendors in the networks of an ally, that could raise future questions about the integrity and confidentiality of sensitive communications within that country, as well as between that country and its allies,” the spokesman said.

“This could in the future jeopardise nimble cooperation and some sharing of information. We are engaging intensively with our allies on how to secure our telecommunications networks to ensure continued interoperability.”

Last month, US Secretary of State Mike Pompeo said during a five-nation European tour that Washington would consider scaling back certain operations in Europe and elsewhere if countries continued to do business with Huawei.

The US is particularly concerned about Nato countries such as Poland, the Czech Republic and Hungary using Huawei equipment.

In December, the Czech Republic said Huawei and ZTE software and hardware posed a security threat.

The Czech tax authority blocked Huawei from being considered as a technology supplier for a new tax portal, and the government has signalled that it may fully block Huawei and ZTE from government contracts.

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