New UK ban on Huawei ‘hits trust’

By GT staff reporters Source: Global Times Published: 2020/11/25 22:53:40

Ties with China’s fast-growing economy may be at risk: observers

Huawei. Photo: VCG

The UK's latest move to act in line with the US in cracking down on Chinese companies provoked Beijing on Wednesday, with the Chinese Foreign Ministry making a rare comment that it will "negatively impact the mutual trust basis of China-UK cooperation." Observers warned that the UK may face further decline in its trade with China, arguably the largest source of global economic momentum over the next 10-15 years that it could rely on for growth after Brexit.

The UK unveiled a new security law on Tuesday that bans the involvement of Huawei in the 5G mobile network. Amid pressure from the US, the new bill was revised to order the complete swapping out of Huawei telecom kit from the entire 5G network by 2027.

British telecommunications companies that fail to meet deadlines for higher security requirements could face heavy fines - 10 percent of their turnover, or more than 100,000 pounds ($133,460) a day.

"It's disappointing that the British government is looking to exclude Huawei from its 5G rollout," Huawei vice-president Victor Zhang said. "This UK Telecom Security Bill is politically motivated and not based on a fair evaluation of the risks," he said.

Zhao Lijian, a spokesperson of Foreign Ministry, blasted the UK at a regular press briefing on Wednesday. "Without any evidence, the UK side, in tandem with the US, continues to discriminate against and crack down on Chinese companies, using the pretext of a groundless national security rationale," Zhao said.

"The UK side has blatantly violated economic and free trade principles, severely impeded the normal operation of Chinese companies, and affected the trust between China and the UK," Zhao said. 

The openness, fairness and security of foreign investment in the UK are now facing serious concerns, he said.

The UK ban on Huawei's involvement in 5G, along with its stance on the Hong Kong question, has led some to think the China-UK relationship has entered a tumultuous period with grave economic implications.

In the telecommunications sector alone, British mobile network operators warned in July that the removal of Huawei equipment from their networks could lead to blackouts and extra costs.

Vodafone's head of networks in the UK said the carrier would have to spend "single-figure billions" of pounds if it was forced to remove Huawei equipment, while BT's network consists of two-thirds Huawei and one-third Nokia, CNBC reported.

Wang Yiwei, director of the Institute of International Affairs at Renmin University of China, told the Global Times on Wednesday that the UK's mentality of following the US to contain China, even at the cost of sacrificing its own development interests, may risk sending already cold China-UK trade relation into a freeze, which the Chinese side doesn't want to see.

In the first 10 months of this year, trade between China and the UK rose 2.8 percent year-on-year to $73.33 billion, but China's imports from the country plunged 16.4 percent, the largest decline among major European economies.

Cao Heping, an economist at Peking University, said "The UK will probably change its strategies in dealing with China within two years when it will find that it doesn't have to get attached to the US for development."

The US economy will not likely maintain its pivotal position in the global arena over the next 20 years, while India may not be able to maintain 40 years of fast economic growth like China did, he told the Global Times on Wednesday.

Experts said that the UK doesn't want to see China-UK trade relations be damaged by the Huawei incident, especially at a time when it's faced with the unprecedented challenges of COVID-19 and withdrawal from the EU.

While China led the world in posting economic growth in the third quarter of this year, the UK's GDP still contracted 9.6 percent year-on-year.

British Minister for Exports Graham Stuart told the Global Times during the third China International Import Expo (CIIE) held in early November that "our presence at the CIIE and my virtual participation - I would have liked to have been there in person - is an indication of how the UK government is committed to a strong trading and investment relationship with China."


blog comments powered by Disqus