LONDON—The British government said it would bar telecom
companies from purchasing new equipment made by China’s Huawei Technologies Co.
for their 5G networks in a further sign of the deteriorating relations between
Beijing and the West.
The sharp about-face by the U.K.—only six months ago it said
it could manage the risks of Huawei’s presence in 5G—was a direct consequence
of new U.S. sanctions on Huawei, the government said. It marks a significant
victory for the U.S. policy and is likely to increase pressure on other
countries to follow suit.
The decision follows British condemnation of China’s
imposition of a new security law over the former British territory of Hong
Kong. A growing body of British lawmakers from the ruling Conservative Party
have been pressing the government to take tougher action against China and
recognize it as an adversary.
Tensions between Beijing and the West have heightened since
the new coronavirus broke out in China late last year, and what western
officials see as an increasingly assertive Chinese foreign policy. This week,
U.S. Secretary of State Mike Pompeo condemned China’s pursuit of territorial
claims to islands in the South China Sea that he described as “completely
unlawful.”
The U.S. has also positioned warships, including two
aircraft carriers, on exercises to the region, heightening tensions between the
two sides that have seen rounds of tit-for-tat sanctions in recent weeks over other
issues that also include trade, technology, human rights and U.S. defense aid
for Taiwan.
The U.K. decision will make purchases of Huawei equipment
for the country’s 5G networks illegal from the end of this year and give
carriers until the end of 2027 to strip out existing Huawei gear from 5G
networks.
China’s ambassador to the U.K. called the Huawei decision
“disappointing and wrong.” He tweeted “It has become questionable whether the
UK can provide an open, fair and non-discriminatory business environment for
companies from other countries.”
The move comes as U.S. pressure builds on European
governments to shut Huawei out of their networks. Senior U.S. officials, led by
national security adviser Robert O’Brien, and counterparts from Italy, Germany,
France and the U.K. are meeting in Paris to discuss the issue this week.
The Trump administration ratcheted up its pressure on Huawei
in May with restrictions that stop foreign semiconductor manufacturers whose
operations use U.S. software and technology from shipping chips to Huawei
without first getting a license from U.S. officials. British officials said
this restriction raised questions about the quality of Huawei equipment in the
future.
U.S. officials have long said Beijing could direct Huawei to
sabotage or spy through 5G networks, which promise to provide superfast
wireless speeds for coming technologies such as self-driving cars. Huawei and
the Chinese government reject the charges.
Oliver Dowden, the British minister in charge of digital
issues, said the move, which would be written into law in the fall, would delay
the development of 5G by two to three years and cost up to £2 billion ($2.5
billion).
He said the U.S. measure was “a significant material change”
in the risk associated with using Huawei technology. He said the sector
suffered from “a global market failure” and was “dangerously reliant on too few
vendors.”
The U.K. is also launching a consultation over banning the
purchase of Huawei equipment for the country’s fiber-optic network. This would,
if necessary, be followed by a transition period that isn’t expected to exceed
two years.
The U-turn followed a new review by the U.K.’s National
Cyber Security Centre, part of the nation’s GCHQ electronic intelligence
agency, triggered by the U.S. export bans in May. U.K. cyber officials said the
U.S. left the U.K. with little choice. Their analysis suggested that even if
Huawei were to find workarounds, the U.S. would modify the rules again to meet
its goals, rather than back down.
Ed Brewster, a spokesman for Huawei UK, said the decision
“threatens to move Britain into the digital slow lane.” Urging the government
to reconsider, he said the new U.S. restrictions wouldn’t have affected the
security of the products supplied to the UK.
He said Huawei, whose equipment will remain in 2G, 3G and 4G
networks in the U.K., would conduct a detailed review of its business in the
U.K. Hours before the announcement, John Browne, chairman of Huawei’s U.K.
board, resigned.
The long phaseout of Huawei gear suggests the government has
listened to British telecom executives who argued that imposing a rapid
deadline to tear out Huawei gear from their networks would lead to coverage
blackouts for customers.
However, several Conservative lawmakers complained Tuesday
that the seven-year phaseout of Huawei was too slow and questioned why its
technology would remain in non-5G networks.
The decision is expected to fuel broader discussions about
how the U.K., U.S. and other allies can wean themselves off Chinese technology
and production, an issue underscored during the coronavirus pandemic by
reliance on Chinese-made medical supplies for hospitals and caregivers.
U.K. officials are talking about ways to diversify 5G
suppliers in the U.K. and Europe, both domestically and alongside allies. The
government could roll out government-supported testing programs to help smooth
entry for new players, saving wireless operators from some of the financial
risk, officials said.
The U.K.’s decision barring Huawei is expected to accelerate
work toward an international alliance to bolster non-Chinese competitors,
something U.S. officials have discussed. Part of the idea is to incentivize
companies long daunted by Huawei’s strength to expand and diversify.
In an interview with The Wall Street Journal, Huawei’s Ren
Zhengfei discusses how his company will navigate the trade war, concerns over
whether its equipment could be used to spy for Beijing and his road trip across
America. Photo: Anthony Kwan for The Wall Street Journal
The U.K. joins Australia and the U.S. in barring Huawei
equipment from its 5G network. Among the countries in the Five Eyes
intelligence alliance, Canada has yet to decide whether Huawei equipment can be
used in its 5G network after beginning a review in the fall of 2018. While the
New Zealand government hasn’t made a formal call, wireless carriers so far have
awarded 5G contracts to other companies.
In Europe, increasing U.S. pressure is likely to focus on
Germany where the government of Chancellor Angela Merkel opposes banning Huawei
but faces pushback from a group of cross-party legislators who want to exclude
the Chinese company on security grounds. A law that will set the criteria for
all vendors bidding to participate in building the 5G network has been delayed
due to the standoff.
The French authorities are planning to restrict where
operators can use Huawei’s 5G equipment, keeping the gear out of sensitive
areas around Paris or near French military installations, among other
locations. France also plans to deliver time-limited authorizations for Huawei
gear already on the network that would expire after three to eight years.
Italy also appears to be growing cooler toward Huawei. Under
U.S. pressure, the Italian government has increased its powers to review and
veto 5G supply deals, and people across the political spectrum are becoming
increasingly vocal about the risk of interference by Beijing.
The Italian government so far hasn’t blocked Huawei from any
part of its 5G network. Italian intelligence and security officials have said
the government should consider doing so for security reasons.
—Jenny Strasburg and Margherita Stancati contributed to this
article.
Write to Stephen Fidler at stephen.fidler@wsj.com and Max
Colchester at max.colchester@wsj.com.
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