October 15, 2019
Germany chooses Huawei for 5G
Handelsblatt has the story that Angela Merkel has personally intervened in favour of Huawei in the choice of suppliers for Germany’s 5G network. Merkel did so because she feared a break with China that Germany can ill afford.
We are not surprised. The fall in Chinese imports is one of the main sources for the slowdown in German manufacturing output. If China started to retaliate against German firms, the damage to the German economy could be substantial. Germany also left itself no technological alternatives. Several German mobile operators already use Huawei equipment. It is the only technology on the market that allows Germany a nationwide 5G coverage.
Handelsblatt obtained the latest version of the security catalogue of the federal network agency, which oversees the 5G network bidding process. Huawei was listed among the companies eligible to supply components. The final decision is due in the next few days. The document no longer contains the clause that Huawei is barred from supplying components.
The paper notes that it is highly unusual for the chancellor to get involved in an administrative decisions of that kind.
We also note that the decision is quite symbolic of the state of EU diplomacy. There was no coordination at EU level. The priority was to safeguard access of German companies to the Chinese market. This means that EU member states will likely all end up with their own disparate policies towards China.