China Says Unfair Treatment of Huawei Could Damage Japan Ties

(Bloomberg) -- Japan’s restrictions on Chinese technology could damage bilateral ties, a Chinese Commerce Ministry spokesman said in a warning that comes as the U.S. has been pushing its allies to bar Huawei equipment from telecommunications networks as a security threat.

Japan is preparing to announce the allocation of bandwidth for 5G communications next month and the tension over telecommunications with China has posed problems for Japanese Prime Minister Shinzo Abe. His government is seeking to rebuild long fractious ties with Beijing and also reliant on the U.S. for its defense.

Abe’s government has been careful not to single out Chinese companies for public criticism. But a December report from Japanese public broadcaster NHK said a change to regulations announced that month will effectively exclude China’s Huawei Technologies Co. and ZTE Corp. from Japanese government procurement.

“If the Japanese government’s approach is obviously unfair, it will definitely shake the confidence of mutual trust and business cooperation between the two countries and undermine the momentum of improvement and development of bilateral relations,” Commerce Ministry spokesman Gao Feng told reporters Thursday. He said he was already aware of damage to Huawei and ZTE in Japan.

‘Normal Path’

Japan’s Chief Cabinet Secretary Yoshihide Suga told reporters Friday that Tokyo is not calling for specific countries or companies to be excluded from procurement. “Ties between Japan and China have returned to a normal path and are beginning to develop further. The government wants to elevate the relationship to a new level through frequent high-level visits,” Suga said.

After inheriting a relationship at its most hostile in decades when he took the helm in 2012 amid a territorial dispute, Abe last year became the first Japanese prime minister to pay an official visit to China since 2011. He hopes to welcome President Xi Jinping to Japan for the Group of 20 leading nations summit in June in what would be the Chinese leader’s first visit since taking office.

Security Risks

Japan’s three largest mobile carriers have banned Huawei and ZTE equipment from their base stations, Kyodo News reported in December. The Nikkei newspaper also said in December that the Japanese government was planning to call on businesses in 14 sectors including water, gas and air transportation, to avoid buying communications equipment seen as posing security risks.

U.S. officials have been pressuring allies to avoid Huawei equipment, citing security concerns. Washington also charges that the company stole intellectual property and violated sanctions on exports to Iran. Huawei has denied wrongdoing and repeated that it doesn’t provide spying back doors for the Chinese government.

The U.K., which is also preparing to roll out 5G services, on Thursday criticized Huawei in a report for failing to address security risks.

The introduction of 5G will provide a huge leap forward in speed, capacity and connectivity. For consumers, the first changes will be faster mobile data speeds -- eventually up to 100 times quicker than those of 4G, letting people download full-length movies in seconds.

--With assistance from Miao Han.

To contact the reporters on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net;Emi Nobuhiro in Tokyo at enobuhiro@bloomberg.net

To contact the editors responsible for this story: Brendan Scott at bscott66@bloomberg.net, Jon Herskovitz, Colin Keatinge

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