Huawei’s billion-euro pitch to Vestager

General view of signage at the headquarters of the Romanian branch of Huawei, the Chinese multinational technology company that provides telecommunications equipment and sells consumer electronics, Bucharest, Romania, 09 September 2019. [EPA-EFE/ROBERT GHEMENT]

Chinese telecoms giant Huawei has released 2018 figures showing its presence in Europe provided a €12.8 billion stimulus to the EU’s economy, backing the company’s claim that it has become an essential element of Europe’s digital ecosystem.

The figures, published on Monday (4 November), were intended particularly for incoming Commission Vice-President Margrethe Vestager who vowed to make “Europe fit for a digital age” as part of her new five-year mandate.

The publication of Huawei’s 2018 economic data in Europe comes as America’s pressure on the company appears to be easing. Wilbur Ross, the US Commerce Secretary, said over the weekend that temporary licenses allowing US firms to trade with Huawei would be on the table “very shortly,” signalling a de-escalation in the current trade dispute with China.

Europe, meanwhile, continues to adopt a cautious approach towards the Chinese telecoms company. Last month, the European Commission published an assessment into the cybersecurity of 5G networks which stressed that “threats posed by states or state-backed actors are perceived to be of highest relevance” – comments that echoed allegations levelled at Huawei by the US administration.

EU governments are now working alongside the Commission and the European Cybersecurity Agency ENISA, in drawing up follow-up plans to alleviate the risks outlined in the report. Those will be ready by the end of December this year.

EU hints at Huawei risk in 5G security assessment

The European Union hinted strongly it viewed Chinese tech group Huawei as a security risk to its roll-out of 5G networks in a report released Wednesday (9 October).

“Our aim is to make Europe fit for the Digital Age”

Amid this context, Huawei is attempting to jockey for influence by drawing attention to the positive economic impact the company has had in Europe.

“We are making a sizeable contribution to the EU economy, helping Europe improve productive capacity and ensuring its firms and industries are not left behind by the pace of digital transformation,” Abraham Liu, Huawei’s Chief Representative to the EU Institutions said on Monday (4 November) at the release of the economic report in Paris.

“Our aim now is to help the European Commission achieve its goal of making Europe ‘fit for the Digital Age’,” Liu said.

The company’s contribution to Europe’s GDP reached €12.8 billion in 2018, according to figures from the publication, conducted by consultancy firm Oxford Economics. The figure comprises indirect, direct and induced impacts, including those arising from the purchase of goods and services from European businesses and the payment of wages which stimulate consumer spending.

The report also draws attention to the company’s tax payments in Europe, which totaled €1.8 billion in 2018.

Digital sovereignty 

Speaking at the event in Paris, Maltese MEP Josianne Cutajar (Socialists and Democrats) underlined the importance of securing Europe’s digital sovereignty – echoing a key message highlighted by Commission President-elect Ursula von Der Leyen in her political guidelines for the upcoming mandate.

“European digital sovereignty is the strongest tool for us to carve out a space for ourselves in the modern world,” Cutajar said, adding that the dream of European digital sovereignty will remain a mere concept unless Europe is able to promote its digital champions “in third countries.”

European tech firms, Cutajar said, should enjoy the “same treatment and conditions in large foreign markets that enterprises from third countries can enjoy when they are welcomed into European markets.”

“Reciprocity is the key.”

Huawei itself is attempting to jump on the European digital sovereignty bandwagon. “When information travels around the world, digital sovereignty is becoming increasingly necessary to support national development. We will resolutely support this concept,” said William Xu, Director of the Board of Huawei, at the opening of the company’s Innovation Day 2019 in Paris.

US 'undermining political independence of Europe,' Huawei says

The US campaign against Chinese telecoms manufacturers is undermining the “political independence of Europe” to decide commercial partnerships for itself, Huawei has warned.

Pitching to Europe

At a time when Huawei’s future in Europe is far from certain, the company is doing its best to pitch itself in a favourable light. Narratives range from highlighting the company’s investments in Europe to supporting the incoming European Commission, as well as drawing attention to next generation mobile networks, or 5G.

The 5G narrative was taken up on Monday evening by Huawei Rotating Chairman Guo Ping. “5G and AI represent a tipping point for ICT. This technology will be further applied in all industries, like electricity was over a century ago,” Ping said.

“This makes ICT a key enabler of industry development,” he stressed.

Whether Huawei’s charm offensive will win Europe around remains to be seen however, as countries weigh up their options in the context of continued pressure from the US.

In August, ambassadors from Romania and the United States signed a memorandum for the development of secure 5G networks, including criteria for selecting companies permitted involvement in 5G infrastructure.

And in September, US and Poland signed a joint declaration to collaborate on 5G security in what US Vice President Mike Pence said would “set a vital example for the rest of Europe”.

The agreement, signed in Warsaw by Pence and Polish Prime Minister Mateusz Morawiecki, backs plans outlined in ‘The Prague Proposals’ – a series of measures contrived in May to ensure the security of next-generation communications networks.

US and Poland 5G agreement an 'example for Europe', Pence says

The US and Poland have signed a joint declaration to collaborate on 5G security in what US Vice President Mike Pence said would “set a vital example for the rest of Europe.”

Europe Divided

But Poland’s doors may not be entirely closed to Huawei yet. Last week, Warsaw signed an agreement with telecoms firms to develop a new company, Polskie 5G, with the aim of building fifth-generation network infrastructure in the country.

It remains to be seen whether Huawei will be included in this initiative, but a spokesperson told EURACTIV on Monday that the company remains “optimistic” about its involvement in Poland’s 5G market.

Elsewhere, UK Prime Minister Boris Johnson will grant Huawei access to “non-contentious” parts of the UK’s 5G network, according to a report in The Times last week.

An announcement with regards to Huawei’s access to the UK’s 5G infrastructure  had been expected this autumn, but could be delayed until after the UK general election on 12 December.

“The security of the UK’s telecoms networks is of paramount importance and a decision on high risk vendors will be made in due course,” a UK government spokesperson told EURACTIV.

That being said, Huawei 5G equipment is “very likely” to be used in core aspects of the UK’s future 5G network infrastructure, Huawei’s founder Ren Zhengfei told EURACTIV in July.

Ren Zhengfei: 'Very likely' Huawei products will be used in UK core 5G networks

Huawei 5G equipment will most probably be used in core aspects of the UK’s future 5G network infrastructure, the founder of the Chinese telecommunications giant, Ren Zhengfei has said. His claim runs contrary to the previous stance held by the UK cabinet, which was to permit the company access only to ‘non-core’ aspects of the country’s 5G networks.

Europe’s fragmented approach with regards to Huawei is something that Juhan Lepassaar, the new chief of EU cybersecurity agency ENISA, recently addressed in an exclusive interview with EURACTIV.

“Countries are in different situations when it comes to the rollout of 5G, when it comes to the vendors that they use, when it comes to the set up and architecture of their current systems,” Lepassaar told EURACTIV.

“Clearly there is no single way of approaching it. ”

While EU member states prepare their risk-alleviating measures for the close of the year, Huawei is set to continue its communications strategy – attempting to win EU policymakers and regulators around to the idea of employing their equipment across a range of industries.

But Margarethe Vestager, the incoming Commission vice-president in charge of digital and antitrust policy, has so far been clear: any future decision on Huawei would be a decision for the bloc alone, in a spirit of safeguarding European sovereignty.

In an interview with Business Insider earlier this year, she said the EU needs to find out if there “could be a danger” in using Huawei products, and that the “discussion must be based on facts” which are “not yet comprehensive”.

With regards to the pressure imposed on EU regulators by US counterparts, Vestager said any future decision on Huawei’s involvement in the EU will be determined solely by EU officials, “no matter what pressure or advice we get”.

Amid continuing US pressure, Huawei looks for the 'European way'

Huawei implored the EU to grasp their future ‘digital sovereignty’, as the company fielded questions from a cross-section of MEPs in Brussels on Wednesday evening (16 October). The hearing came as the US administration renewed its campaign against the Chinese company, claiming it poses a series of risks to the European market.

[Edited by Frédéric Simon]

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