Beijing Threatens ‘Consequences’ If U.K. Treats China as Hostile

(Bloomberg) -- China warned the U.K. it will face “consequences” if it chooses to be a “hostile partner” after it emerged Prime Minister Boris Johnson is preparing to begin phasing out the use of Huawei Technologies Co. equipment in the U.K.'s 5G telecommunications networks as soon as this year.

A report from the National Cybersecurity Centre concluded that new U.S. sanctions mean Huawei will have to use untrusted technology, making security risks impossible to control, a person familiar with the matter said, confirming a story in the Sunday Telegraph newspaper.

“If you do not want Huawei, it is up to you,” Liu Xiaoming, China's ambassador to the U.K., said on a video call with reporters on Monday. “We want to be your friend, we want to be your partner, but if you want to make China a hostile partner you have to bear the consequences.”

Officials are drawing plans to speed up the removal of existing Huawei kit, although an exact timetable is yet to be set, said the person, who asked not to be named discussing unpublished proposals. No date has yet been set for a cross-government discussion at the National Security Council.

‘Significant Impact'

“If the U.S. imposes sanctions, which they have done, we believe that could have a significant impact on the reliability of Huawei equipment and when we can use it safely,” Culture Secretary Oliver Dowden told Sky News on Monday when asked about the prospect of phasing out Huawei. “If it's appropriate to change policy, we'll clearly make a statement to the House of Commons when we've been through that and made a decision.”

Speaking later on LBC Radio, Dowden said he'd make a statement on Huawei to Parliament before it rises for summer recess on July 22.

Johnson told reporters during a visit to the east of England that he is still determined to deliver on his promise of high-speed broadband across the country, but will have to find a way of doing it that is secure.

“I'm determined that the U.K. should not be in any way vulnerable to high-risk state vendors,” he said in a pooled TV interview. “We'll have to think carefully about how we handle that and we'll have to come up with the right solutions, but also we have to make sure we continue to deliver the broadband the U.K. needs.”

If taken, the decision would mark a U-turn by Johnson's administration, which in January cleared Huawei to participate in the U.K.'s 5G build-out subject to strict conditions, including a 35% cap on its involvement and a bar on its gear being used in parts of the network deemed sensitive. Ministers argued the U.K. needed diversity in its suppliers, and that any risks involved in using Chinese equipment could be mitigated.

Trump Opposition

But the decision was opposed by Donald Trump's administration, which wanted Johnson to impose an outright ban on the Shenzhen-based tech giant, citing concerns that its gear could be vulnerable to infiltration by Chinese spies. The U.K. prime minister also faced growing hostility from opponents within his own Conservative Party, who believed they had the numbers to block any legislation on the matter.

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The Chinese ambassador said if the British government does ban Huawei it would show it can no longer follow an independent foreign policy.

“If you dance to the tune of other countries, how can you call yourself Great Britain?” Liu asked. He added that such a move would “punish Britain's image” as a supporter of free trade and damage trust between China and the U.K.

Defence Secretary Ben Wallace told Parliament's Defence Committee on June 30 that U.S. sanctions on Huawei -- which put its microchip supply in jeopardy -- are “designed to make 5G designed by Huawei very hard to do.” Sitting alongside him, Culture Secretary Dowden said the sanctions were “likely to have an impact on the viability of Huawei as a provider for the 5G network.”

Other Suppliers

He also said Huawei won't be part of the U.K.'s 5G telecommunications networks in the long term, adding that he welcomes approaches from alternative vendors including South Korea's Samsung Electronics Co. and Japan's NEC Corp.

Dowden may provide Johnson with formal advice as soon as this week on Huawei, according to the person familiar.

“We are considering the impact the U.S.'s additional sanctions against Huawei could have on U.K. networks,” the British government said Sunday in an emailed statement. “This is an ongoing process and we will update further in due course.”

For its part, Huawei said in a statement on Sunday it's “open to discussions” with the government.

“We are working closely with our customers to find ways of managing the proposed U.S. restrictions so the U.K. can maintain its current lead in 5G,” Huawei Vice-President Victor Zhang said. “We believe it is too early to determine the impact of the proposed restrictions, which are not about security, but about market position.

©2020 Bloomberg L.P.