BERLIN • German Chancellor Angela Merkel's government has ruled out an outright ban targeting Chinese equipment supplier Huawei Technologies as Germany moves towards building its ultra-fast fifth-generation (5G) networks, according to a government official.
Cabinet members from Dr Merkel's administration met on Wednesday in Berlin to discuss the prospect of restricting Huawei equipment from the new 5G network.
While they continue to work towards a final decision, the ministers concluded that singling out Huawei from a list of suppliers was not legally viable, the official said on Thursday on condition of anonymity in accordance with government protocol.
Economy Minister Peter Altmaier has signalled that any restrictions tied to Germany's shift to the crucial next-generation technology will not involve targeting specific companies, but rather subjecting all potential service providers to stringent security standards.
Huawei has come under scrutiny by United States allies who are concerned that its equipment could be used by Chinese intelligence.
"I don't think this is about ruling out or not ruling out individual service providers," Mr Altmaier said last week.
The Interior Ministry will formulate a list of security criteria to determine the degree of scrutiny levelled on companies, which various ministries with competing interests will then have a chance to weigh in on. That catalogue will be completed in the next few weeks, the official said.
Auctioning for the country's 5G network is expected to begin next month. Telecommunications companies have warned about costs that would arise if Huawei were cut out of supplying 5G equipment.
Germany's Deutsche Telekom has warned that Europe would fall behind the US and China in 5G with such a move, according to people familiar with an internal briefing paper from the company.
"Irrespective of whichever telecommunications company receives a tender, they will in the end have to prove that they fulfil these security standards," Mr Altmaier said last month.
Meanwhile, the US envoy to the European Union said that any Western country allowing Huawei or other Chinese equipment to be used in critical infrastructure projects will face the risk of US countermeasures.
The warning adds to signs that US President Donald Trump's administration is pushing for a blanket ban on Chinese companies from new 5G wireless networks, autonomous vehicles and other lucrative contracts in the tech-nology sector throughout Europe, North America and other American allies.
"There are no compelling reasons that I can see to do business with the Chinese, so long as they have the structure in place to reach in and manipulate or spy on their customers," Ambassador Gordon Sondland, Mr Trump's envoy in Brussels, said on Thursday in an interview.
"Those who are charging ahead blindly and embracing the Chinese technology without regard to these concerns may find themselves in a disadvantage in dealing with us."
Depending on the Chinese equipment used by Western countries, the US may have to be "more careful in sharing information, in transacting business", and a "host of things", Mr Sondland said.
He urged European countries to pick Finnish and other Scandinavian companies for their 5G contracts, citing a Chinese law that allegedly compels any private company in the country to cooperate with the government "on any intelligence matters in secret and without refusal".