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Decouple Bit by Bit: European Commission Call to Remove Chinese Companies’ Infrastructure

Updated: May 23


In a push for 'digital sovereignty' and protection against cybersecurity concerns, the European Commission made a steady move towards reducing the dependency on the fifth-generation mobile internet connectivity (5G) infrastructure from the Chinese tech giants - Huawei and ZTE.


On the 15th of June, the European Commissioner for Internal Market, Thierry Breton, urged more Member States to apply the necessary measures endorsed by the European Union to mitigate the various risks associated with 5G networks. In addition to emphasising that the restriction or exclusion of Huawei and ZTE follows the European guidelines, Breton announced the Commission is going to avoid these companies in its own procurements and allocation of funds across programs.


However, this action does not make up a major significant shift in European policy. Rather, it is a reiteration and reinforcement of the pre-existing strife for the EU strategic autonomy in the digital field and the securitization of the 5G. Albeit, the Commission's June crackdown might single out the states being the central 'sore points' and increase pressure on them.


5G is of monumental importance. As the next generation of mobile broadband technology, 5G is expected to revolutionise the digital landscape with unprecedented speed, reduced latency, and enhanced capacity - it is not just an incremental upgrade to 4G. It paves the way for many new applications, from autonomous vehicles and smart cities to the Internet of Things.


The underlying technological advancements of 5G - such as network slicing and massive machine-to-machine communications - enable a much more tailored approach to the specific needs of various sectors, such as defence. High-speed data transfers will enhance situational awareness in critical missions and boost connectivity between those on the field and in headquarters. Reduced latency will notably improve remote control operations and precision in drone controls.


However, alongside these remarkable capabilities comes a heightened risk, as 5G will form the backbone of future digital infrastructures, making it a prime target for cyber threats and raising concerns over critical dependencies. Hence, securing 5G networks becomes an issue of paramount importance as well.


Chinese companies occupy a special place within the discourse on the cybersecurity of 5G. Huawei is at the forefront of research and development on the fifth-generation mobile network and is in possession of the most standard essential patents, with over 6,500 in 2022. Although the Shenzhen-based company is a trailblazer in the wireless communication sector, it is also at the centre of global scrutiny over security concerns.


Given the geopolitical and geoeconomic significance of the technology, many states are alarmed about the potential espionage on behalf of Chinese authorities and the possible weaponization of the infrastructure through the 'chokepoint effect,' i.e., severing network access. Firstly, Huawei's opaque governance structure and its strong ties to the central government forced by, e.g. China's 2017 National Intelligence Law which compels companies to hand over the data to the party officials, forms the primary layer of suspicion. Moreover, Christopher Balding’s research suggests a significant personal interconnection between the Chinese security apparatus and the company's employees. Hence, the perception of the threat of economic coercion grows.


'Digital sovereignty' is one of the priorities of the Ursula von der Leyen administration and refers to Europe's ability to act independently in the digital world. The security of the systems and the information infrastructure is part and parcel of it.


In 2020, the Union published a Toolbox on 5G cybersecurity which comprised measures aiming at strengthening the security of the networks as well as applying relevant restrictions for suppliers considered high risk, including necessary exclusions. According to the report on Member States' progress in implementing the Toolbox - presented at the previously-mentioned conference by Commissioner Breton - only ten member states of the EU have enacted restrictions on "high-risk" suppliers (such as Huawei and ZTE), while three others are in the process of formulating national legislation to address this issue.


It is imperative to note that twenty-four Member States have either already established or are in the process of developing legal frameworks which empower national authorities to perform this assessment and impose necessary limitations. The Breton conference and the report are a reminder of a risk coming from the overdependence on Chinese companies, rather than a new course of action.


Germany is the crucial actor in this debate. According to data from the Center for European Policy Analysis, 59% of the 5G infrastructure in Germany comes from Chinese companies. Moreover, Germany represents 25% of mobile users in Europe. Should there be an exclusion of technology from Huawei and ZTE, the impact on Germany would be profound and far-reaching.

Deutsche Telekom alone, Germany's largest operator maintaining a strategic partnership with Huawei, would have to spend €1.1 billion ($1.2 billion) to remove its partner's infrastructure.


Yet, the landscape of the German regulatory framework is witnessing a shift in its stance towards the so-called 'high-risk' suppliers. In the past months, the Federal Ministry of the Interior and Community (BMI, Bundesministerium des Innern und für Heimat) took necessary measures to screen the equipment used by the telecoms in their network infrastructure. If these installations are identified as a risk to the "public order or the security of the Federal Republic," the ministry has the authority to ban their ongoing use and command their removal. While the regulation does not explicitly prohibit operations, it will practically result in the expulsion of Chinese suppliers from a crucial market segment.


The final implementation of the BMI initiative remains uncertain. However, the media outlets say the audit should be "completed by summer 2023". The politics of ending the relationship with the Chinese tech companies are nonetheless full of ambiguities given the differing priorities of actors, ranging from the particular ministries to telecoms. The Commission's recent outcry might provoke the regulators in Germany and other countries to rethink their approaches.


These developments have put a further strain on the relations between Brussels and Beijing.


ZTE and Huawei, following the Commission's ban, rejected its allegations and criticised its move, reckoning it was not based on a “verified, transparent, objective and technical assessment of 5G networks”. Even though the European Union is confronting China openly in its plans to be more independent technologically, the Member States might not want to endanger their relations with Beijing.


Consideration for cordial exchanges with China is a major factor that shapes the decisions of actors in Europe. Addressing the issue of Chinese 5G providers falls within the realm of national security. Therefore, it is entirely up to the policy-making of the national governments for now.


Nevertheless, Breton increased the pressure on countries lagging behind, renewed a debate on banning the Chinese companies, and amplified the Commission's adamant stance on weaning off the Union's interdependence on the strategic infrastructure.



Image: Christophe Licoppe

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Cultures Post
Cultures Post
Jun 29, 2023

Good read

https://culturespost.blogspot.com

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