Trump's Huawei Threats Dismissed in Italian Pivot Toward China

(Bloomberg) -- A senior Italian government member has pushed back against U.S. pressure in the global tussle over Huawei Technologies Co., saying the Chinese networking giant is not a specific concern for the populist coalition.

“People always say Huawei yes or no, the real question should be about foreign equipment manufacturers being allowed to access your network,” Michele Geraci, undersecretary at the Ministry for Economic Development, said in an interview at his Rome office.

Trump's Huawei Threats Dismissed in Italian Pivot Toward China

“I don’t see Huawei as an issue, for me it’s just one of 25 names of equipment manufacturers that you can choose from, with different prices and different quality,” said Geraci, a professor of finance who spent a decade teaching in Shanghai and was picked for his government job by Deputy Premier Matteo Salvini of the anti-immigration League.

U.S. envoys have toured the European Union in recent week to pressure their allies, threatening countermeasures against any nations allowing Chinese equipment to be used in future 5G telecom networks.

Vice President Mike Pence tried to hammer the message home again Saturday, telling a security conference in Munich that Chinese law requires Huawei “to provide Beijing’s vast security apparatus with access to any data that touches their networks or equipment.” Chinese politburo member Yang Jiechi, speaking at the same event, disputed that and insisted Huawei cooperates closely with European governments.

Turning to China

As telecom companies prepare for 5G networks which will boost speed and capacity of mobile data transmission, EU countries are divided on how to respond to the U.S. campaign against Huawei, which has become a lightning rod in a broader battle for influence between the U.S. and China.

Trump's Huawei Threats Dismissed in Italian Pivot Toward China

Partly due to Geraci’s influence, the populist coalition made of up Salvini’s League and the anti-establishment Five Star Movement of Luigi Di Maio has been pivoting toward China, pushing for business and ditching efforts by the previous center-left government and EU allies to curb Chinese investment in critical infrastructure and strategic companies.

Di Maio has told Lewis Eisenberg, the U.S. ambassador to Rome, that the ministry for economic development will set up a structure to ensure security checks on all equipment in the telecom sector, newspaper Il Messaggero reported Tuesday. Di Maio told Eisenberg that the 5G contracts have been awarded and that the government could go no further than tightening general checks, Messaggero said. The administration will not use any tools against Huawei, nor will it cancel existing contracts, the newspaper said.

Asked about the U.S. concern on cooperation with Chinese intelligence, Geraci said China is misunderstood. “China is growing and growing, but it has one of the poorest populations in the world,” said Geraci. “China is very peaceful, it is trying to feed its people. We in the West don’t understand what China is doing and this creates friction, anxiety, mistrust.”

Italy’s government is carrying out “a deep discussion” about foreign firms bringing in technology “but this is not specifically about China,” said Geraci. With Huawei long entrenched in the country, canceling existing contracts “would be an issue,” he added. Huawei’s business partners in Italy include Telecom Italia SpA, the country’s largest phone carrier.

U.S. Pressure

U.S. Secretary of State Michael Pompeo last week threatened that nations buying from Huawei could be shut out of initiatives involving the U.S.

But Geraci said the Rome government would remain a steadfast ally. “The U.S. should not be worried about our loyalty to our alliance with it, to Europe or to NATO. We never call this into question,” he said. “If there is an issue, we can be helped to make the best decision, but I don’t see this as doing anything against the interest of our U.S. allies.”

After repeat visits by Italian leaders to China since the populist government took power in June, Chinese President Xi Jinping may come to Rome in late March, Geraci said. The visit may see the signing of a memorandum of understanding to boost Italian business involvement in China’s massive Belt & Road Initiative infrastructure project.

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