Huawei sign

China “prepares retaliation against Portugal because of Huawei”

China “ready to use influence in companies like EDP/ REN/ BCP and Mota-Engil”

China is described as ready to use its influence in some of Portugal’s largest businesses to pressure the country to reverse its decision that effectively bans Huawei from the developing 5G networks.

According to Jornal de Negocios, unless Portugal rethinks in Huawei’s favour, “China is ready to respond politically against Portugal and use its influence in businesses like EDP, REN, Mota-Engil and BCP (bank)”.

The paper says Beijing was taken by surprise by the decision by the Supreme Council for Cyberspace Security, which it interpreted as being “a tougher response compared to other countries in Europe”.

This is a bit of a non-sequitur, in as much as a number of other European countries have reportedly taken exactly the same stand as Portugal (among them Denmark, Sweden, Estonia, Latvia, Lithuania, and the United Kingdom) – their reasoning lying in the “high risk for the security of networks and national services” if “suppliers or providers (…) are headquartered in a country where the government exercises control, interference or pressure on its activities in third countries”. As such, the decision was taken to ban any and all suppliers and providers based outside EU/USA/NATO/OECD countries.

When the news broke over the weekend, it wasn’t only Beijing that was taken by surprise: operators in Portugal were also fairly perplexed – for the simple reason that it creates a very grey area: ‘what happens to the technology already in place?’ (The country to date has close to 7,000 5G antennae installed on national territory).

Today, the answer came, through a number of sources: ANACOM (sector regulator) will enforce this change-over: Chinese technology (and any other from non-EU/US/OECD/NATO sources) must be “expelled” from the 5G ‘core’ networks in three years, and from non-core in five. (Non-core extends to management systems, radio access networks, networks transmission and transport systems and interconnection systems between networks).

That leads to the next ‘very large question’: who is going to pay for stripping Chinese and other technology out of these systems? And into this minefield comes another query, explains ECO online: what if there are ‘delivery delays’ on equipment for replacement? This comes in the context of component scarcity (an issue since the pandemic, exacerbated by the war waged by Russia against Ukraine).

ECO says it has sent “several questions about this process to the office of Mário Campolargo, which answers directly to the prime minister”, but this far has not received any answers beyond the statements sent earlier this week.

As for the purported Chinese threats of retaliation, these have simply been mentioned, obliquely. Some media sources just use the word ‘retaliate’ with no examples given, others go a further, citing potential companies that could be involved in the retaliation, admitting “political and economic consequences for Portugal” if it doesn’t rethink.

“Considering that China is, for several years, the fourth major investor in this country, having applied close to €11.22 billion in Portugal in 2022 (alone), it is admissible that Beijing could use some of its many investments on national territory to confront the government over what it considers to be the injustice of this decision”, says ECO.

[email protected]