China tried to punish EU nations for Huawei bans – report

In another sign that 2021 may not be so different from 2020, Huawei is already dominating the news cycle.

So far this year the big vendor has offered to advise the Australian government on 6G and has found an unexpected Swedish ally in Ericsson.

Now it's been revealed that Chinese negotiators in the EU-China investment treaty made a last-minute effort to punish countries that had placed restrictions on Huawei.

Orders from on high: Chinese negotiators tried to punish countries that had imposed restrictions on Huawei.  (Source: zibik on Unsplash)
Orders from on high: Chinese negotiators tried to punish countries that had imposed restrictions on Huawei.
(Source: zibik on Unsplash)

The Chinese side introduced an eleventh-hour clause that would exclude countries with Huawei bans from eased access to China's cloud market, South China Morning Post reports.

Punitive action

Under the new treaty, known as the CAI, China is allowing EU companies to own up to 50% of a data centers and cloud business. Currently those sectors are off-limits to foreign firms.

But Chinese officials inserted a footnote that would have denied these benefits to any country had banned or limited Huawei. This would include EU members such as Spain, Poland, Italy, the Czech Republic and France.

The Post said the insertion appeared in a draft dated December 11, just over two weeks before the pact was finalized. But the wording was struck out by EU negotiators, indicating it did not make the final agreement.

Hervé Jouanjean, a former EU trade negotiator, described it as a standard Chinese ploy to "try to bulldoze everybody" with language that is "absolutely unacceptable to the other party."

Meanwhile in Africa

In other Huawei news, the unexplained suspension of a Kenyan 5G rollout is raising eyebrows.

Africa is thought to be the last place to find any resistance to Chinese 5G gear, but Safaricom, one of the bellwether African operators, has just put its 5G plans on hold, according to media reports.

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The well-regarded telco, which has around 62% of the local market, ran trials of its Huawei-built network last year and was expected to debut by Q1 2021.

But CEO Peter Ndegwa now says the operator has no short-term plans to launch the service.

It doesn't seem to be stinting on network spending. It has forecast full-year capex to be the same or slightly above last year, at 35-38 billion shillings (approximately US$320-$346 million).

So the sudden change of heart and the lack of explanation suggests the issue is legal or political.

It may be the equipment has failed to pass a security test, or that Safaricom's major shareholders, the Kenyan government (35%), Vodafone and its affiliate Vodacom, are anxious not to land on a US sanction list.

Whatever, it's a sign that the Huawei saga will continue to roll on in 2021.

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— Robert Clark, contributing editor, special to Light Reading

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