Huawei to build first European 5G factory in France to soothe Western nerves

In the first phase of setting up the mobile base station plant, the company would invest €200m and would create 500 jobs

Huawei Chairman Liang Hua

Huawei will build its first European manufacturing plant in France, company's chairman Liang Hua said on Thursday, as the Chinese telecom giant seeks to ease worldwide concerns stoked by US charges that Beijing could use its equipment for spying.

“This site will supply the entire European market, not just France’s,” Liang told a news conference. “Our group’s activities are worldwide and for this we need a global industrial footprint.”

The French plant will be Huawei’s second manufacturing facility outside China. As stated by Liang, in the first phase of setting up the mobile base station plant, Huawei would invest €200m and create 500 jobs. Then, when its operational, the plant will generate €1bn a year in sales.

It was however not immediately clear whether Huawei’s decision had the blessing of French President Emmanuel Macron, who has courted foreign investors but also led warnings about Chinese encroachment into the European Union’s economy. Yet, Liang said Huawei had outlined the group’s plan’s to the French government.

“This is not a charm offensive,” he inisted.

5G technology is expected to deliver a huge leap in the speed and capacity of communications and an exponential spike in connections between the billions of devices, from smart fridges to driverless cars, that are expected to run on 5G networks. But the development of the technology hs turned Europe into a major battleground between the United States and China.

The United States has repeatedly warned European allies against allowing the Chinese firm into the continent’s 5G infrastructure. But European capitals are divided over how to deal with Huawei.France says it will not discriminate against any vendor, but requires all suppliers to be screened so they can secure a green light from the cybersecurity agency, which is examining Huawei equipment. Sources close to the French telecoms industry say they fear Huawei will be barred in practice even if no formal ban is announced.

Unsurprisingly, France's mobile operators are divided over the issue. The top French mobile operator, state-controlled Orange, for instance, has already chosen Huawei’s European rivals, Nokia and Ericsson. At the same time, smaller operators Bouygues Telecom and Altice Europe’s SFR, whose existing networks rely heavily on Huawei, are urging Paris to clarify its position on Huawei.

Neighboring Germany is also struggling to reach consensus on the way forward. Chancellor Angela Merkel’s ruling conservatives back tougher rules on foreign vendors, but have stopped short of an outright ban on Huawei.

Britain has defied the United States by allowing “high-risk vendors” such as Huawei into non-sensitive parts of its 5G network but not what it describes as “core” components. Washington has pressed London to reconsider.

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