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American war on Huawei succeeding as Europe joins anti-China ‘coalition’

The prevalence of chips with American technology made New Street Research analyst Pierre Ferragu declare ‘Huawei has 12 months left to live’

The status of Huawei Technologies Co in the international market has reduced from a crucial component of British and French mobile networks to potential outcast after resistance and compromises began to give way to a relentless American campaign led by the White House.

Both France and the UK indicated this week that they were taking steps to reduce their reliance on the Chinese company — with the British government mulling over phasing out Huawei’s role this year. French cybersecurity agency Anssi imposed a waiver system that will severely limit its use.

A year ago, things were looking far more optimistic for the Chinese company. Britain’s intelligence and security committee had said last July that barring Huawei would make networks less resilient to malicious attacks. The committee’s reasoning was that it would reduce competition and leave the UK dependent on just two suppliers — Nokia Oyj and Ericsson AB.

UK Prime Minister Boris Johnson attempted a compromise in January, allowing carriers to use Huawei equipment to build their 5G systems. The precondition was to cap it at 35%. The British government decided not to use Huawei in sensitive network cores.

The Huawei decision comes at a crucial time for Britain. Johnson is trying to build what he calls a new “global Britain” following the country’s official exit from the European Union in January and is eyeing new trade deals with the United States and China. London finds itself torn between those two rival powers.

In 2015, then-Prime Minister David Cameron hailed a new “golden era” in Sino-British relations as he welcomed President Xi Jinping to London with a full state visit and banquet at Buckingham Palace.

Just five years on, tensions are rising fast over Huawei, China’s imposition of a new security law on Hong Kong, and Beijing’s handling of the coronavirus pandemic. Liu Xiaoming, China’s ambassador to Britain, gave a stark warning in an internet broadcast Monday. “We want to be your friend; we want to be your partner, but if you want to make China a hostile country, you have to bear the consequences,” Liu said.

American intervention

But the American pressure has only increased and European governments and carriers have found themselves having to choose sides between two world powers. President Donald Trump’s administration has piled on sanctions, making it more and more difficult for European carriers to access products from the world’s biggest maker of telecommunications equipment.

“Huawei’s R&D spending growth has been accelerating recently,” said Neil Campling, an analyst at Mirabaud Securities. “Their advances relative to the Western peers are significant, and so the US is using everything it can in its political power — whether that’s trade sanctions, official agreements, unofficial agreements — to try and slow China’s advances,” Campling said.

American war on Huawei succeeding as Europe joins anti-China 'coalition'

Huawei Vice President Victor Zhang urged the UK to assess the long-term impact of US sanctions before deciding to exclude the company’s products.

The American government, which wanted Europe to ban Huawei outright because of concerns that the Shenzhen-based company’s equipment was vulnerable to infiltration by Chinese spies, hit back.

Trump berated Johnson in a call after the UK’s announcement, a person familiar with the matter said at the time, and Vice President Mike Pence didn’t rule out that the clash could affect trade talks for post-Brexit Britain said.

Europe walks the American way

The fatal blow for Huawei’s relationship with Europe may have come in May when the US banned the company from sourcing microchips that use American technology.

The prevalence of chips that are made with or incorporate American technology caused New Street Research analyst Pierre Ferragu to declare in May that “Huawei has 12 months left to live”.

Those sanctions were so severe they prompted British security services to re-open their review of how secure and sustainable a supplier Huawei could be in national networks. That review has now been completed and sent to UK digital and culture secretary Oliver Dowden. He said they were “likely to have an impact on the viability of Huawei as a provider” and more details on the UK next steps will come soon.

Sirf News Network

By Sirf News Network

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