China is considering export controls on Nokia and Ericsson if more European countries follow the UK in banning Huawei from their 5G networks, people familiar with the matter told the Wall Street Journal.
China’s Ministry of Commerce is mulling export controls that would prevent Nokia and Ericsson from sending products made in China to other countries, the report said. One person added that this was a worst-case scenario that Beijing would use only if European countries came down hard on Chinese suppliers and banned them from their 5G networks.
The EU hasn’t banned Huawei, but recommended member states adopt their own controls on risky vendors. It is expected to soon publish a report detailing how the 27 countries have acted.
The EU’s biggest country, Germany, isn’t expected to decide whether to bar Huawei from its 5G networks until September at the earliest. France has passed legislation allowing the government to vet suppliers before operators build their networks.
The Chinese Commerce Ministry said that the country will take necessary measures to protect the legitimate rights of Chinese companies, in response to a recent ban on Huawei by the British government. The ministry didn’t respond to a request for comment from the WSJ on its report.
Chinese officials quoted by the state-backed paper Global Times rejected the WSJ report. "This piece of information is made up with ulterior motives, it is maliciously fabricated news aimed at undermining good and cooperative relations between China and EU," Wang Wenbin, a spokesperson for the Chinese Foreign Ministry, told a press briefing in Beijing. He said that China is open to cooperation with companies from all countries on 5G, including Nokia and Ericsson.
Both Nokia and Ericsson have manufacturing plants and thousands of employees in China. Tipped off about the potential restrictions a few weeks ago, Nokia commissioned a review of its supply chain and made contingency plans to shift global production, according to a person familiar with the matter. Both Nokia and Ericsson could manage Chinese restrictions by shifting production to elsewhere in Asia, or to Europe or North America, people familiar with the companies said.
