(May 28): Germany and Spain are leading opposition to European Commission plans to ban Chinese technology suppliers from telecommunications networks as part of new cybersecurity rules, according to people familiar with the negotiations.
Officials from the countries want to keep state-level control, and have expressed concerns that banning products from Huawei Technologies Co and other Chinese suppliers at the European Union (EU) level risks retaliation from Beijing, the people said, asking not to be identified as the discussions aren’t public. The states also warned that a ban risks making the bloc’s plans to build out artificial intelligence (AI) infrastructure more expensive, they said.
The commission has labelled Huawei and compatriot ZTE Corp “high-risk suppliers” for telecommunications networks, and Brussels has urged member states to exclude the two companies from connectivity infrastructure. While infrastructure decisions are made by national governments, the EU’s executive governing body is pushing for stronger oversight via a revision to its Cybersecurity Act. The changes would expand cybersecurity assessments to include the risks of foreign state influence and dependency on particular suppliers, and would make the commission’s recommendations legally binding across the EU.
China’s Foreign Ministry said its government departments have expressed “serious concerns” about the potential new regulations to the EU. The ministry warned of economic fallout for Europe and retaliation if it proceeds with imposing restrictions on the country’s corporations.
“If Chinese companies are subjected to discriminatory treatment as a result, China will take resolute measures in accordance with relevant regulations to safeguard the legitimate rights and interests of Chinese companies,” the ministry wrote in response to a request for comments.
European governments are caught in the middle of a power struggle between the US and China, balancing the benefits of trading with the Asian nation and the need to scrutinise foreign sources of critical infrastructure. German Chancellor Friedrich Merz, previously critical of over-reliance on China, said this year that he will push ahead with a new effort to strengthen Sino-German ties. The EU is also planning to propose temporarily lifting sanctions on a Chinese chip supplier to shore up the automotive supply chain.
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Lawmakers and security experts in Europe and the US have for years raised concerns that Chinese companies could embed backdoors into their equipment that would allow unauthorised access to Europeans’ personal data. Both Huawei and ZTE have denied such claims. A Huawei spokesperson said a proposal to exclude Chinese suppliers based on their country of origin “violates the EU’s basic legal principles of fairness”.
A spokesperson for the European Commission declined to comment on individual national positions, but emphasised that “Europe cannot afford to leave its strategic networks exposed to high-risk suppliers”. The commission has estimated that mobile companies will need to spend EUR3.4 billion (US$3.9 billion or $5.1 billion) to EUR4.3 billion over three years to replace the technology.
A spokesperson for the German Interior Ministry said discussions on the Cybersecurity Act were ongoing, adding that consultations between ministries began this week. A representative of Spain said that the country supports the act’s revision and “believes that member states must continue having an adequate participation in the decision process regarding whether a country, supplier or products present certain structural risks”.
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Spain has also become a more vocal proponent of Chinese interests in the EU in recent years. Prime Minister Pedro Sánchez has travelled to Beijing four times in as many years as he courts Chinese investment in sectors such as electric vehicles and renewable energy.
Germany has joined that effort even as there is disagreement within the ruling coalition and between the different ministries concerned with the process, some of the people said. While parts of the government generally agree with reducing reliance on China, others have been calling the idea a political bombshell, the people said.
The German government agreed in 2024 to strip Huawei and ZTE components from the core 5G mobile network by year end for national security reasons.
On Wednesday, German Economy Minister Katherina Reiche said the EU should ensure that any measures it applies on Chinese trade don’t harm the bloc’s exports to the country.
“As an exporting nation, we have two interests,” Reiche said in comments to reporters during a visit to Beijing. “We need to counter unfair competition, for example, in steel and ferroalloys, with appropriate measures, while at the same time ensuring that our companies can continue to export.”
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