'France's stance on first ever European Huawei factory underscores EU's inaction on China', Megan Khoo
In February, financial prosecutors raided Huawei’s offices in France for “breach of probity” which includes offences such as influence peddling, favouritism, and corruption. While this raid and its accompanying preliminary investigation are not stopping Huawei from breaking ground on its first-ever factory in the EU worth EUR 200 million in Alsace, French and EU officials must work together to prevent the establishment of a Huawei factory on EU soil. The recent raid and allegations, France’s de-facto Huawei ban, and Huawei’s extensive links to the government of the People’s Republic of China (PRC), the Hong Kong government, and human rights violations in Xinjiang provide a sufficient case for them to do so.
Existing EU bans and restrictions on Huawei
After the European Commission released its 5G cybersecurity toolbox which advises EU member states to exclude or restrict high-risk 5G suppliers from their telecommunications networks in January 2020, ten EU member states including France introduced bans or restrictions on Huawei. In February 2020, Latvia signed a joint declaration with the US on vetting 5G technology products to determine whether software suppliers are controlled by a foreign government, ensuring software suppliers have transparent ownership, and confirming that software suppliers practise ethical corporate behaviour and are accountable to a legal regime with transparent corporate practices. France was the second EU member state to do so in July 2020 by informing telecommunications operators that they would not be able to renew existing licences for Huawei products. In October 2020, Sweden banned Huawei from selling 5G products following assessments by the Swedish Security Service and Armed Forces, which referred to Huawei as “one of the biggest threats against Sweden”. The same month, Italy prevented Huawei from signing a deal to supply products for its 5G network with Fastweb, the Italian unit of Swisscom which is one of Italy’s lead telecommunications operators.
In June 2023, the European Commission considered imposing a mandatory ban on Huawei in EU member states in response to concerns that national governments were delaying action on the matter. In February 2024, a Commission spokesperson presented data exposing EU member states’ lack of implementation of the 5G toolbox. Still, the Commission is yet to provide further comment on the consideration of a blanket Huawei ban throughout the EU, partly due to the bloc’s strong economic ties to China, as well as a lack of consensus among EU member states.
Despite France’s de-facto Huawei ban in July 2020, Huawei announced initial plans to establish a factory in France — its first-ever factory in the EU — just five months later. Undeterred at the time, the company reported, “France has mature industrial infrastructure and a highly educated labour pool, and its geographic positioning is ideal for Huawei. This manufacturing plant will add to Huawei’s integrated value chain within Europe, improving the timeliness and reliability of Huawei’s deliveries to European customers”. Plans for the factory were then delayed due to the COVID-19 pandemic.
In July 2023, Huawei gained ground in opening the proposed factory following a meeting between French Economy and Finance Minister Bruno Le Maire and Chinese Vice Premier He Lifeng at the China-France Economic and Financial Dialogue, where Le Maire said that France would extend 5G licences for Huawei in some cities. There was no explicit reasoning for the move. Still, it seems to have been economically motivated as Le Maire raised market access issues faced by French banking, agricultural, nuclear, and cosmetics companies. Beijing approved of the move, but Le Maire should reconsider and take into account its close ties to the Chinese Communist Party and lack of transparency.
Huawei claims to be a private company fully owned by its employees, but it was founded and continues to be led by former People’s Liberation Army (PLA) officer Ren Zhengfei, suggesting close relations with the Chinese Communist Party. Like other Chinese companies, Huawei is mandated to share information with Chinese intelligence agencies under the National Intelligence Law of the PRC. With no accountability for what data is transmitted under this law, transparency is compromised.
In addition to EU member states, many other governments have placed Huawei under scrutiny for its suspected national security risks. The United States and other countries found Huawei guilty of violating international sanctions and stealing intellectual property from T-Mobile in 2017. Three years later, the US Department of Justice prosecuted Huawei for conspiracy to steal trade secrets and conspiracy to breach the Racketeer Influenced and Corrupt Organizations Act (RICO), both of which the indictment said gave Huawei an unfair competitive advantage in trade.
Huawei’s ties to Hong Kong and Xinjiang
Although Huawei is a Chinese-owned company, it also maintains a heavy presence in Hong Kong, where Hong Kong Chief Executive John Lee and other officials continue their campaign to eradicate the rule of law and disregard human rights. Back in 2016, Huawei partnered with the PRC-owned China Mobile Hong Kong (CMHK) to launch an LTE-Advanced Pro network. The partnership continues today, as Director and Chief Executive Officer Sean Lee said in 2023, “We are honoured to collaborate with Huawei to create revolutionary ‘5G Advanced’ technology. ‘5G Advanced’ will bring digital transformation to a different level and promote a smart world in terms of connecting people, things, cars, homes, and enterprises”.
Huawei also partners with TPV Technology, which is headquartered in Hong Kong, to make curved displays for Huawei PCs. At City University of Hong Kong (CityU), Huawei deployed a converged network to service the whole hospital with Wi-Fi, 5G, and an Information of Things (IoT) database, leading CityU Hospital to be Hong Kong’s first 5G smart hospital in 2023.
In addition to Hong Kong, The Washington Post exposed links between Huawei and Xinjiang in 2021 after reviewing Huawei marketing presentations which demonstrated the company’s capacity to assist Beijing in monitoring individuals of interest, creating labour schedules for prisoners, and managing ideological reeducation in Xinjiang.
The Australian Strategic Policy Institute (ASPI) has documented Huawei working with Xinjiang’s public security apparatus, including providing the Xinjiang Public Security Bureau with digital services and technical support as well as a public security cloud solution to ensure “Xinjiang’s social stability and long-term security”. ASPI also identified Huawei as one of at least 82 popular global brands with Uyghurs working in their factories under conditions which strongly suggest forced labour.
These links between Huawei and regions such as Hong Kong and Xinjiang, which house flagrant violations of human rights and even the risk of genocide, must not be overlooked for the mere 500 jobs that would be created by a Huawei factory in France.
France should lead the EU in preventing the establishment of Huawei factories on EU soil
As Hong Kong Watch has recommended in a new briefing on the economic, ethical, and security risks of a Huawei factory in the EU, the European Parliament should hold a hearing with Huawei representatives, as well as expert witnesses, on Huawei’s ties to human rights abuses in Hong Kong and forced labour in Xinjiang, which the EU Parliament has previously referred to as “crimes against humanity and represent a serious risk of genocide”. Likewise, the European Commission should launch a thorough and independent investigation into the risks of Huawei operating a factory in the EU, similar to the anti-subsidy investigation of Chinese electric vehicle (EV) imports launched by the Commission in October 2023.
The European Commission should also reconsider imposing a mandatory ban on “high-risk suppliers” such as Huawei which pose security risks to 5G networks throughout EU member states, and EU member states should immediately be held accountable for implementing the Commission’s 5G toolbox to impose country-level bans or restrictions on Huawei to safeguard their national security. Noting the particular threat of Huawei, the Second Progress report on the implementation of the toolbox published in June 2023 states, “The Commission will take measures to avoid exposure of its corporate communications to mobile networks using Huawei and ZTE as suppliers”.
France has the unique opportunity to lead the way among EU member states in calling attention to the national security risks posed by Huawei and to be consistent with their earlier restrictions which are inconsistent with permitting Huawei to build a factory inside France itself. Anything less than preventing a Huawei factory in France blatantly disregards France’s current restrictions on Huawei, French national security, and the greater security of the EU.
This article was published in 9DASHLINE on 11 April 2024.