EU takes more aggressive stance on Huawei as China tensions rise

BRUSSELS - The European Commission is increasing its pressure on member nations to stop using Huawei Technologies and ZTE Corp equipment in their most advanced mobile networks, explicitly labelling the companies for the first time as “high-risk” vendors.

As part of an effort to crack down on Chinese equipment in critical infrastructure, the European Union’s executive arm urged countries to phase out high-risk vendors from telecom networks in a new set of guidelines published on Thursday, confirming an earlier Bloomberg report.

The Commission is also banning Huawei and ZTE from its corporate communications systems. 

EU nations are facing increasing pressure from the United States to take a harder stance on China as conflicts over Taiwan and battles for dominance in technologies from artificial intelligence to chips and quantum computing escalate.

The tensions have raised concerns around the world about the Asian nation using Huawei and ZTE equipment in core telecommunications networks to spy or sabotage systems. 

The latest guidance also comes as countries including Germany and Spain have continued to use Chinese equipment makers in their networks at levels that the EU finds unacceptable, people familiar with the situation said, asking not to be identified because the information is not public.

European Commissioner Thierry Breton said at a press conference on Thursday that only 10 of the bloc’s 27 member nations have curbed or excluded high-risk vendors since the commission issued 5G guidance three years ago encouraging them to do so.

“This is too slow and imposes a major security risk and exposes the union connectivity security since it creates a major dependency for the EU and serious vulnerabilities,” Mr Breton said. 

Some countries have also pushed for a more aggressive EU-wide stance, expressing concerns about publicly speaking out against Chinese companies on their own, the people familiar with the matter said. 

The European Commission has not provided evidence that Huawei, ZTE and other Chinese firms pose a security risk, Chinese Foreign Ministry spokesman Wang Wenbin said on Friday at a regular press briefing in Beijing, calling this “a typical presumption of guilt”.

“We strongly urge the EU to comply with international trade rules, steer clear of overstretching the concept of security and politicising such concepts, and not suppress foreign companies.”

The EU has limited authority to force members to implement bans in the name of national security, since state governments have sovereignty. Commissioners including Ms Margrethe Vestager and Mr Breton have previously raised concerns about the prominence of the companies in EU infrastructure. 

A report from the commission on Thursday noted that certain countries still rely on Chinese technology years after allied countries, including the US, Britain, Canada and Australia, banned Huawei from 5G networks.

But it ultimately leaves policy decisions on 5G security in individual nations’ hands as before.

The European Commission’s updated advice comes ahead of the group’s economic assessment report that will look at the EU’s supply chains, technology, critical infrastructure and trade risks. 

Mr Breton encouraged countries at the press conference on Thursday to replace high-risk vendors and urged telecom operators “to get to grips with this issue”.

The commission plans to reduce its own exposure to Huawei and ZTE by no longer procuring services used by the two firms and phasing out existing ones.

The EU has been able to rapidly reduce other dependencies, Mr Breton noted, citing how quickly Europe found other suppliers of natural gas after Russia invaded Ukraine.

“The situation with 5G should be no different,” he said. “We cannot afford to maintain critical dependencies that could become a weapon against our interests.” BLOOMBERG