Sources told Japan that it plans to ban government purchases of equipment from China’s Huawei Technologies Co Ltd and ZTE Corp to bolster its defenses against intelligence leaks and cyberattacks. Reuters.
Chinese tech companies are under intense scrutiny from Washington and some prominent allies for their ties to the Chinese government, motivated by concerns that Beijing could use them to spy.
A government ban in Japan will come after Huawei has already been banned from the US market and after Australia and New Zealand have prevented 5G networks from being built. Huawei has repeatedly insisted that Beijing has no influence over it.
The Yomiuri newspaper, which first reported the news of Japan’s planned ban on Friday, said the government was expected to review its internal procurement rules on Monday.
The government does not plan to specifically name Huawei and ZTE in the review, but will implement measures aimed at strengthening security that apply to the companies, said a person with direct knowledge and a person briefed on the matter.
The main spokesman for the Japanese government, Yoshihide Suga, declined to comment. But he noted that the country has been in close communication with the United States in a wide range of areas, including cybersecurity.
“Cybersecurity is becoming a major issue in Japan,” he said at a regular press conference. “We will take firm action by looking at it from a variety of perspectives.”
ZTE declined to comment. Huawei did not immediately comment.
Chinese Foreign Ministry spokesman Geng Shuang expressed “grave concern” over the reports.
The essence of China-Japan business and economic cooperation is mutual benefit and win-win, and both companies have been operating legally in Japan for a long time, he said at a daily press conference in Beijing.
“We hope that the Japanese side can provide a fair competition environment for Chinese companies operating in Japan and do nothing to harm bilateral cooperation and mutual trust.”
Huawei supplies some network equipment to private telecommunications companies NTT Docomo and KDDI Corp.
And SoftBank Group Corp has a long-standing relationship with Huawei, which in 2011 became the first Chinese company to join Japan’s conservative Keidanren business group, and has partnered with it on 5G trials.
“The government will not buy where there are security problems, but it is difficult to restrict the hiring of private companies,” said one of the sources.
Docomo and SoftBank did not immediately respond to a request for comment.
“While we closely watch the changes, we will consider appropriate steps,” said a KDDI spokeswoman.
However, some private companies in other places have distanced themselves from Chinese companies.
In the United States, SoftBank’s wireless affiliate, Sprint Corp, said it no longer buys equipment from Huawei or ZTE. SoftBank is seeking to complete the sale of the unit to T-Mobile US Inc.
And Britain’s BT Group said on Wednesday that it was pulling Huawei equipment from the core of its existing 3G and 4G mobile operations and would not use the company in the core parts of the next network.
ZTE’s Shenzhen-listed shares rose 0.5 percent on Friday after falling 5.7 percent the day before amid a worldwide share sell-off triggered by the arrest in Canada of the chief executive of Huawei at the behest of the United States. Huawei is not listed.