EU Tech Chief Warns Again on Cyber Threat From China 

(Bloomberg) -- The European Union’s digital chief is urging the bloc’s member states to consider the risk of partnering with Chinese companies like Huawei Technologies Co.

In an interview, Andrus Ansip, European Commission Vice-President for digital affairs, said China’s National Intelligence Law, passed in 2017, has increased the risk in dealing with Chinese companies in Europe. The law mandates any organization and citizen to support and assist national intelligence in their investigations and to keep information related to such investigations.

“When it’s written in the law, then we have to understand those risks they are higher. We cannot be naive anymore,” Ansip said, adding that Chinese companies are "under suspicion" as a result of the legislation. He said he was referring to all Chinese companies – not just Huawei.

The comments by one of the EU’s top officials come as Huawei is under mounting scrutiny by governments around the world. The U.S. is urging its allies to avoid using Huawei’s equipment for fear it can be used in spying, something the company has repeatedly denied. Earlier in January, Poland arrested one of the company’s local executives, accusing him along with a local former security agent, of conducting espionage against the country.

Asked whether European countries should restrict partnerships with Huawei, Ansip said he wouldn’t give such recommendations but rather that “I would like to ask all the governments, all the responsible people, to deal with the risk assessment in a very serious way.”

He said, while the risks are higher after China passed the law, it doesn’t necessarily mean there should be a definitive break in Europe with Chinese companies or products.

Chinese Response

Huawei said it had commissioned a legal opinion to analyze the consequences of the law. The opinion says the law doesn’t require it to cooperate with state intelligence if it would contradict the legitimate rights and interests of individuals and organizations, a spokesman said.

In a statement, the Chinese Mission to the EU said it has noted that some people “in certain countries” say Chinese high-tech companies may pose threats to national security, “but none of them have yet to produce any convincing evidence on how their national security has been affected.”

The mission added it was “opposed to the relevant parties’ one-sided interpretation of Chinese laws” and that such rules “never give any institution the mandate to force companies to build ’mandatory back doors.’ Such actions have never happened.”

The EU’s Ansip has previously voiced his concerns about Chinese espionage. When asked at a Brussels press conference in December whether Europe should be concerned about Huawei or other Chinese companies, Ansip said “Yes, I think we have to be worried,” pointing to the new Chinese law, which he called “mandatory backdoors.”

Huawei at the time said it was “surprised and disappointed” by his comments and that it “categorically reject any allegation that we might pose a security threat.” It said it has never been asked by any government to build any backdoors or interrupt any networks, and that it would “never tolerate” such behavior by staff.

Huawei Equipment

Romanian telecoms minister Alexandru Petrescu said in an interview that singling out countries or suppliers doesn’t better defend the bloc from cyber-threats. Romania currently leads the EU’s rotating presidency of member states, during which time it acts as a neutral broker to drive forward negotiations on EU legislation and other matters.

“The threats will always be there,” Petrescu said. “It’s about us getting better in what we do in terms of securing the data of European citizens and European businesses.”

Huawei has been pitching heavily to sell its equipment to European telecoms. On Thursday, it said it’s now shipped over 25,000 of its 5G base stations worldwide. Ryan Ding, chief executive of the carrier business, said 18 out of Huawei’s 30 contracts so far have come from Europe. 5G will be key in underpinning future technologies such as autonomous cars and AI-assisted services.

Some countries have sought to limit the company’s influence over their future networks. Australia and New Zealand banned Huawei equipment from the planned 5G networks of carriers, and other nations, including Germany, are considering restricting Huawei’s role in its future telecom infrastructure.

In the U.K., Vodafone Group Plc on Friday said it has suspended purchases of equipment from Huawei for the core of its wireless networks.

When asked whether decisions by European member states to limit Huawei’s role could hinder the development of 5G in Europe, Ansip said there are other suppliers of the network equipment, such as Ericsson AB and Nokia OYJ, but noted that Huawei is very advanced in the field.

“Exactly because of this – risk assessment is needed,” Ansip said.

--With assistance from Gao Yuan.

To contact the reporter on this story: Natalia Drozdiak in Brussels at ndrozdiak1@bloomberg.net

To contact the editors responsible for this story: Giles Turner at gturner35@bloomberg.net, Nikos Chrysoloras

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