As someone who has immense respect for the European Parliament, I have no doubt that those members who signed the letter of 14 October to the European Commission and Member State governments about Huawei did so in good faith.
Regrettably the letter contains statements about Huawei which are demonstrably inaccurate.
A key point in the submission builds a case for closing Huawei out of European markets on the basis that European ICT equipment suppliers are closed out or restricted in the Chinese Telecoms market.
That argument is unfounded. Over the past 20 years, Ericsson and Nokia have been awarded major contracts with China Mobile, China Telecom and China Unicom. Both companies have supplied equipment for 4G and 5G core network and access network projects in China.
In a press statement on 8 June, Ericsson noted that it had “strengthened its market in China” by winning 5G contracts with China’s major telecom operators. The statement pointed out that Ericsson’s strengthened market position in China “is strategically important for Ericsson as this will generate scale advantages and strengthen Ericsson’s position in the world’s largest 5G market.”
On 15 June Nokia issued a press statement announcing, “China Unicom selects Nokia core networking products for 5G”. The statement said that Nokia is “proud to expand (its) working relationship with China Unicom”.
The points about Huawei finances made in the letter reflect unsupported and unfounded allegations circulated in the US.
“As someone who has immense respect for the European Parliament, I have no doubt that those members who signed the letter of 14 October to the European Commission and Member State governments about Huawei did so in good faith”
Those allegations were comprehensively addressed in a detailed submission made to the US Federal Communications Commission, in February 2020 by the respected Professor of Free and Competitive Enterprise at Columbia University Graduate School of Business, Dr Wei Jiang.
If the US authorities and politicians who have ‘piled in’ on Huawei had any evidence on which to question that submission, they would have done so.
The idea that Huawei has benefitted from “billions of dollars of public subsidies” is also at variance with the facts. Huawei meets 90 per cent of its financial requirements through its business operations; the balance comes mostly from international banks at standard commercial terms.
The average effective tax rate paid by Huawei is similar to that paid by US companies. Like any other company, Huawei is entitled to apply for R&D support. There is nothing unique in that, many if not all EU Member States provide support for R&D activity.
The submission recycles unfounded assertions made by the Trump administration regarding Huawei’s “trustworthiness” as an ICT equipment supplier. The assertions have never been supported by any evidence.
The unsubstantiated labelling of Huawei as a “high-risk vendor” is disturbing, unfair, unwarranted and overlooks the facts that:
- Huawei has been a trusted supplier to Europe’s major network operators for over 20 years,
- Huawei is the most heavily scrutinised ICT supplier in the market,
- The company has never once suffered a major cybersecurity incident and Huawei’s products have consistently been found ‘clean’.
Those who attack Huawei’s security record have not produced a shred of evidence to support their claims.
Huawei operates cybersecurity centres in the UK, Germany and in Brussels. It shares access to source-codes and other sensitive data with European governments, state agencies & network operators to an unparalleled degree.
Those who attack Huawei’s security record have not produced a shred of evidence to support their claims. Huawei operates cybersecurity centres in the UK, Germany and in Brussels. It shares access to source-codes and other sensitive data with European governments, state agencies & network operators to an unparalleled degree
In addition to all of this, those who advocate closing Huawei out of Europe fail to recognise either the economic benefits that the company’s operations in Europe deliver or the costs that will arise if the policies they are pushing were to be followed.
In September, Oxford Economics, a leader in global forecasting and quantitative analysis issued a study, commissioned by Huawei, which found that on a direct, indirect and induced basis Huawei, in 2019, supported a total contribution to European GDP worth billions, supports tens of thousands of European jobs and generated billions in tax revenues for European authorities.
The considerable economic self-harm that would be inflicted by removing Huawei from Europe is ignored by those advocating that action.
Those who want Huawei ‘out’ also ignore the company’s extraordinary contribution to research and development. The 2020 EU Industrial R&D Investment Scoreboard produced by the EU’s JRC ranks Huawei in the top three global innovative companies.
Huawei which established its first European research centre in Sweden in 2000 carries out significant R&D at 23 sites across Europe and currently partners with over 150 European universities. The company recently announced a €70m R&D investment programme in Ireland.
The submission also fails to examine the very substantial costs that excluding Huawei will impose on Europe’s telecom operators.
Another study by Oxford Economics examines the costs associated with restricting competition in 5G network equipment throughout Europe.
“Public policy should be based on objective analysis and founded on fact. Much of the debate on Huawei is anything but objective or fact-based. It’s time to reset the debate”
The study concludes that excluding a key equipment supplier like Huawei would increase investment costs by almost €3bn per year, on average, over the next decade (in 2020 prices), an annual real cost increase of 19 percent which will inevitably impact on 5G rollout.
Those increased costs which would ultimately be passed on to European businesses and to European citizens.
Also overlooked is the fact that for over 20 years Huawei has served the European telecommunications industry, become a key supplier to Europe’s leading network operators, put down deep roots with them and built a relationship based on mutual trust and respect.
The company has developed relationships with hundreds of European suppliers which support thousands of European jobs directly and indirectly. That should count for something.
Huawei has been used by the discredited Trump administration as a pawn in a geopolitical game. An unprecedented campaign of disinformation against a private company has been spun from the US by agencies which have been shown to be less than truthful in the past.
The point made at the outset is worth repeating; public policy should be based on objective analysis and founded on fact. Much of the debate on Huawei is anything but objective or fact-based.
It’s time to reset the debate.