China and the World

A difficult call

Trouble ahead as Britain bans Huawei from its 5G network

Huawei-w

A less golden era in the UK

Boris Johnson took an ear-bashing over the phone from Donald Trump earlier this year, following the UK’s decision to grant Huawei a limited role in building its 5G mobile network. And now the British prime minister will be waiting for another angry call on how he has handled the Huawei situation – this time from Beijing.

This follows the reversal of an agreement in January that Huawei could be involved in ‘non-sensitive’ parts of the country’s 5G network (see WiC481). Now the Chinese giant is unwelcome, even in limited form: phone firms won’t be allowed to add its equipment to their networks from the end of this year and all of Huawei’s existing kit will have to be ripped out by 2027.

Intelligence chiefs have altered their advice on the basis that Huawei is going to have problems securing the supply of American parts and components, because of trading restrictions ordered from Washington. “Given the uncertainty this creates around Huawei’s supply chain, the UK can no longer be confident it will be able to guarantee the security of future Huawei 5G equipment,” said Oliver Dowden, the government minister with responsibility for 5G policy.

The change of heart is a triumph for the Trump administration’s efforts to throttle Huawei’s supply chain, although Huawei is said to have pleaded with UK regulators to reconsider, claiming that it has enough American parts to meet its rollout commitments for the next five years.

But Johnson’s government has also come under heavy pressure from backbench members of parliament, many of whom want Huawei stripped out of the network altogether. Opposition to the initial deal has strengthened since Beijing’s passing of a new national security law in Hong Kong, although Huawei’s critics have been buoyed most by changes in the public mood in the UK, which has darkened towards China since the onset of the coronavirus pandemic.

Consumers will now have to bear the costs of reconfiguring the 5G networks in a process that could take at least five years to complete if service failures are to be avoided. A fuller ban on Huawei equipment across all mobile and fixed-line networks could take more than a decade to deliver, the UK telecoms operators claim.

The about-turn will infuriate the Chinese government, which thought that a deal had been done. There were stern warnings against going back on that decision. “If you do not want Huawei, it is up to you,” Liu Xiaoming, the Chinese ambassador to the UK, told reporters last week. “We want to be your friend, we want to be your partner, but if you treat China as a hostile country, you have to bear the consequences.”

More than £80 billion of annual trade between the two nations, plus billions more in Chinese investment in the UK, could now be in jeopardy, with fears that British export earnings from sectors like tourism and education will be early targets for reprisals. The Chinese are doing something similar in Australia by telling their nationals not to study there, in retaliation for Canberra’s calls for an enquiry into the origins of the coronavirus (see WiC496).

“It is necessary for China to retaliate against the UK, otherwise wouldn’t we be too easy to bully? Such retaliation should be public and painful for the UK,” the Global Times warned in an ominous editorial on Wednesday.

If trade ties do deteriorate it will be a complete reversal of the ‘golden decade’ in relations promised by David Cameron, the former prime minister, five years ago (see WiC300). His finance chief George Osborne was even keener on closer ties, boasting that Britain was more open to Chinese investment than any other Western economy. Critics say that the benefits have been limited and that the policy has caused anxiety among Britain’s traditional allies, especially the Americans. “It’s been called the golden era, but I prefer to call it the golden error,” Charles Parton, a former diplomat and China specialist, told the Financial Times this week.


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