Beijing is considering retaliating against the Chinese operations of two major European telecommunication-equipment manufacturers, Nokia Corp and Ericsson AB, should European Union members follow the lead of the US and UK in barring China’s Huawei Technologies from 5G networks, reported the Wall Street Journal.
China’s Ministry of Commerce is mulling export controls that would prevent Nokia and Ericsson from sending products it makes in China to other countries, said WSJ sources. One person added that this was a worst-case scenario that Beijing would use only if European countries came down hard on Chinese suppliers and banned them from their 5G networks.
The Chinese Commerce Ministry said last Thursday that the country will take necessary measures to protect the legitimate rights of Chinese companies, in response to a recent ban on Huawei by the British government.
“This kind of action could backfire by frightening some foreign tech companies into moving manufacturing out of China,” said Jim McGregor, the Greater China chairman of advisory and advocacy consulting firm APCO Worldwide. “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.”