Tuesday, 21 July 2020 10:11

China warns Nokia, Ericsson of blowback over Huawei gear Featured

China warns Nokia, Ericsson of blowback over Huawei gear Image by Gordon Johnson from Pixabay

China may exact revenge if European countries follow the UK's lead in dumping Huawei 5G gear, with the Middle Kingdom indicating that it may hit back at the Chinese operations of Nokia and Ericsson.

The Wall Street Journal reported that the Chinese ministry of commerce was thinking of imposing export controls on Nokia and Ericsson to prevent the two companies from sending product made in China to other countries.

The European Union has not formally banned the use of Huawei equipment as the UK did last week. It has drawn up a set of guidelines for member nations to adopt if they wish when choosing their 5G suppliers. A report on how the guidelines have ben followed is expected soon.

Nokia has about 16,000 employees, many in research and development, in its Greater China market, which includes Hong Kong and Taiwan.

The Ericsson manufacturing site and R&D facilities have about 14,000 employees in its North East Asia region, which includes China, Japan, South Korea and Taiwan.

The Swedish firm has small contracts to supply 5G gear to China's state-run wireless carriers while Huawei and ZTE have much bigger deals with these carriers.

The WSJ report said Nokia had become aware of the likely restrictions ahead and was reviewing its supply chain in order to draft a contingency plan to manufacture elsewhere.

Last Thursday, China's commerce ministry said it would take whatever measures it deemed necessary to protect the legitimate rights of Chinese firms.

The Greater China chairman of advisory and advocacy consulting firm APCO Worldwide, Jim McGregor, told the WSJ: "This kind of action could backfire by frightening some foreign tech companies into moving manufacturing out of China.

“Companies are already very nervous about getting caught in geopolitical battles and are reassessing their manufacturing sites and supply chains to protect their business continuity.”

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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