Germany could ban Chinese firms from its 5G auctions

While in the past German policies have been guided by business interests rather than strategic factors, surely Germany, Europe’s biggest and strongest economy, has gained from history’s strategic insight and will take the right decision.

Senior German officials are telling German Chancellor Angela Merkel’s government that it should consider excluding Chinese firms, including Huawei, from bidding for the country’s 5G infrastructure midst growing concerns of national security.

The development, isn’t surprising given that Australia and the United States have already banned Chinese suppliers from their 5G auctions.

Germany expected to start its 5G auctions in early 2019.

The move underscores the extent of concerns that Berlin ministries have regarding China’s role in building Germany’s next generation mobile network.

“There is serious concern. If it were up to me we would do what the Australians are doing,” said a senior German official on the condition of anonymity given the sensitivity of the matter.

Officials from Germany’s interior and foreign ministries are exceedingly concerned and have already held talks with their Australian and U.S. counterparts on the risks posed by using 5G equipment supplied by Chinese companies such as Huawei.

The opposition parties have however decided to play hardball. Last week the Greens submitted a motion in parliament questioning the government stance and said, there is no legal basis for excluding certain suppliers from the 5G rollout.

“Excluding all investors from a certain country is the wrong approach,” said Katharina Droege, a Greens lawmaker who co-authored the Bundestag motion. “But we need to be able to vet individual cases in order to ensure our critical infrastructure is protected. That could lead to the exclusion of Chinese firms from building our 5G infrastructure.”

So far the public debate in Germany over 5G has revolved around how extensive 5G mobile network coverage will be rather than issues concerning security.

National Intelligence Law

In 2017, China passed its National Intelligence Law, which required that Chinese “organizations and citizens shall, in accordance with the law, support, cooperate with, and collaborate in national intelligence work”.

This has sparked fears that Chinese companies could be asked by the Chinese government to install “backdoors” into their equipment which will provide Chinese intelligent a free hand in intelligence gathering, or sabotaging activities.

Many experts also see risks stemming from Chinese intelligence developing the ability to subvert Huawei’s equipment.

In a development that lends weight to such thinking is a news report by The Australian which states, that Huawei staffers had been used by Chinese intelligence to obtain access codes to infiltrate a foreign network.

Huawei has denied that it had ever “provided or been asked to provide customer information for any government or organization”.

To counter growing awareness of security issues, Beijing has increased its lobbying efforts. Recent months have seen a flurry of German politicians, from the state as well as local governments, visiting Huawei’s headquarters in Shenzhen.

“Following Australia’s decision to exclude the Chinese from their 5G network, there is huge angst at Huawei,” said a senior industry official. “They fear a domino effect. If it stops with Australia it is not such a big deal. But if it continues it’s serious. A 5G setback in Germany could ripple across Europe.”

Increasing concerns

In recent months, there have been growing concerns regarding China which are not just related to 5G security. The debate in Germany comes at a time when Chinese investments across the globe are being questions. So much so, that Berlin is in the process of tightening its foreign takeover rules to prevent Chinese rivals from acquiring its tech companies.

Largely mirroring such concerns, the European Commission has also kicked off a debate about strategic autonomy, arguing that Europe must ensure that it does not become overly reliant on the United States or China in the digital age.

If Europe were to exclude Chinese firms such as ZTE and Huawei, it could lean on European alternatives such as Nokia and Ericsson.

“If the conclusion of your strategic autonomy debate is that you as a state must have control over everything then it’s going to cost a lot of money,” said Paul Timmers, a research fellow at Oxford University and former director of cybersecurity at the European Commission’s digital directorate. “You have to think about whether it’s realistic and whether you can afford it.”

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