PARIS (Reuters) – Huawei will build its first European manufacturing plant in France, the president said Thursday, as the Chinese telecommunications giant seeks to allay global concerns over US accusations that Beijing may use its equipment to spy.
Liang Hua, president of Huawei Technologies Co Ltd, speaks during a press conference in Paris, France, on February 27, 2020. REUTERS / Charles Platiau
Liang Hua said Huawei [HWT.UL], the world’s largest producer of telecommunications equipment, is reportedly investing € 200 million ($ 217 million) in the first phase of the mobile base station plant. He said it would create 500 jobs.
Huawei, which denies that its equipment poses a security risk, is at the center of a storm pitting the United States against China over 5G, the next generation mobile technology. Europe has become a major battlefield.
“This site will supply the entire European market, not just France,” said Liang at a press conference. “The activities of our group are global and for this we need a global industrial footprint.”
5G technology is expected to provide a huge leap in speed and capacity for communications and an exponential increase in connections between the billions of devices, from smart refrigerators to driverless cars, which should work on 5G networks.
It was not immediately clear whether Huawei’s decision had the blessing of French President Emmanuel Macron, who wooed foreign investors but also issued warnings about China’s encroachment on the Union economy. European.
Liang said Huawei had presented the group’s plan to the French government. “It is not a charm offensive,” he said.
Macron’s office declined to comment.
PRELIMINARY STEPS
The United States has repeatedly warned European allies not to allow the Chinese company to integrate the continent’s 5G infrastructure. But European capitals are divided on how to deal with Huawei.
France has not yet started to deploy its 5G networks, but the first French mobile operator, controlled by the Orange State (ORAN.PA), has already chosen Huawei’s European competitors, Nokia (NOKIA.HE) and Ericsson (ERICb.ST).
Small operators Bouygues Telecom (BOUY.PA) and SFR from Altice Europe (ATCA.AS), whose existing networks are highly dependent on Huawei, urge Paris to clarify its position on Huawei.
France says it will not discriminate against any supplier, but demands that all suppliers be screened in order to get the green light from the cybersecurity agency, which is examining Huawei equipment. Sources close to the French telecommunications industry say they fear Huawei will be banned in practice even if no official ban is announced.
Neighboring Germany is also struggling to reach consensus on the way forward. Chancellor Angela Merkel’s ruling conservatives support tougher rules on foreign suppliers, but have not ended an outright ban on Huawei.
Britain has challenged the United States by allowing “high-risk providers” such as Huawei into insensitive parts of its 5G network, but not what it describes as “essential” components. Washington urged London to reconsider.
The mobile base stations that will be manufactured in France are not considered to be at the heart of the 5G network infrastructure.
Huawei accuses the United States of seeking to curb its growth because no American company can offer the same range of technologies at a competitive price.
The French plant will be Huawei’s second manufacturing plant outside of China. It owns a smartphone manufacturing plant in India, but only has assembly plants elsewhere. The factory in France will generate 1 billion euros in turnover per year.
(GRAPHIC: What is 5G and what are its security risks? Here)
Report by Mathieu Rosemain; Editing by Richard Lough and Edmund Blair