EU digital data protection

Amidst issues of interdependency, technological sovereignty and US bans over alleged CCP infiltration, the EU’s continued integrated partnership with Huawei is not without concern

In light of the pandemic, the efficient and timely rollout of cellular 5G technology will undoubtedly prove instrumental for the recovery of states in the post-Covid world. Nowhere is this more prevalent than in the functioning of the EU’s single market, which has taken a digitalised turn after the initial paralysis of national economies. Central to this rollout, utilising the technical expertise of telecom companies would seem a given. This is why the US-led rhetoric over bans on one of the world’s leaders in the 5G field, Huawei, comes as a great blow to the world economy. Fears over Chinese infringements on technological sovereignty and corporate espionage lie at the root of these bans. But have these fears been well-founded? Or have they become entangled in an increasingly hostile clash between the US and China?

The partnership with Huawei

Quite simply, the narrative of Huawei as the direct instrument of Chinese foreign policy is grounded in politicised rhetoric propagated in a US struggle to maintain its influence, rather than hard-grounded facts. Direct Chinese government grants to the firm, for example, totalled 0.3% of total Huawei sales from 2009-2018; far from the Chinese puppet-strung architecture narrative of the company circulated by the US. Taken in a context where European competitors such as Nokia and Ericsson receive similar, proportionate subsidies, this assertion of an infiltration by the Chinese Communist Party fades under scrutiny.

As Europe is Huawei’s biggest export market and has a third of its telecommunications system supplied by the company, the economic ramifications of banning Huawei in the US indicate why doing so would prove devastating to the European economy, especially as countries look to gain headway in recovery from the pandemic. European R&D, for example, received over 1 billion USD from the telecom giant since the company’s rise to international prominence in 2001.

By recognising the economic importance of Huawei for the development and rollout of 5G in Europe, the EU not only signalled its changing stance of toeing the line for the transatlantic partnership, but emphasised the changing nature of global economic governance. This was shown by the European Commission’s report of March 2019, which recognised Huawei “as the standard-setter in 5G and the top 5G equipment vendor in the world”.

The “Made in China 2025” strategy

The EU, however, has certainly not been naïve to the potential dangers surrounding unchecked activity of Chinese companies in Europe regarding 5G. The announcement of China’s 2025 “Made in China” strategy in 2015 by premier Xi Jinping, to be a technological leader rather than just a manufacturing powerhouse, sparked concerns over the implications this would have with China’s involvement in Europe. Most tangibly, China’s 2017 National intelligence and cyber security laws requiring companies to share data with the Chinese government if requested to do so, caused much alarm for the EU.

The most visible manifestation of an EU-wide response came with an attempt to strengthen internal cohesion and implement the necessary transparency mechanisms to safeguard European technological sovereignty. The European Commission’s adoption of the European Council’s “Recommendation on the cybersecurity of 5G networks” on 26 March 2019, and the subsequent completion by member states of national risk assessments of their 5G network infrastructures, demonstrated the progress made towards member states’ cohesion.

With the 2020 joint EU toolbox of mitigating measures, setting out an objective assessment of the identified risks related to the rollout of 5G, the diversification of suppliers spearheaded these concerns for reform within the Union. And with the pandemic exposing issues of interdependency with China for Europe, in the midst of lockdowns and increasing digitalisation of the world economy, such risks have become ever more present.

EU member states’ adaptive capacities

As Europe grapples with Covid-19 amidst second waves and its recovery from economic recession, the underlying concerns over European solidarity with 5G was exposed in the July 2020 report of the Commission on the progress made in implementing the joint EU toolbox of mitigating measures. Amongst other concerns, the principal shortfall to cohesive European action regarding 5G rollout was shown in how 13 member states lacked a national FDI screening mechanism. In the context of the approaching application of the EU investment screening framework as of October 2020, the implementations of this mechanism become increasingly apparent.

More concerningly however, for the EU, such disparities in member states’ adaptive capacities to combat possible infiltrations represent the wider trend of the split between west and east Europe. The 17+1 Initiative with China, stemming from the disillusionment of Eastern European countries in the aftermath of the Financial Crash, exposed the fault lines of balkanization which are yet to be fully addressed within the EU. In unison with rising authoritarianism and nationalism in Europe, the necessity to reform the functioning of the EU remains a potent force in the forging of future relations, therefore.

Whilst this has been reconciled in part by the EU-wide response to the pandemic, with the centrality of solidarity in recovery from the pandemic through the collective agreement at the July 2020 summit of the 750 billion stimulus package for member states, the narrative within the CEE condemning a Brussels Consensus and the underlying Euroscepticism remains fierce. Furthermore, the UK’s recent banning of Huawei in July will undoubtedly put considerable strain on the EU as the US pushes for it to follow suit, in an increasingly polarising geopolitical landscape.

The role of Huawei in European digital networks has therefore exposed the necessity to harness European solidarity. This was the case even before the pandemic struck. But whether this means European technological sovereignty will stay intact will surely depend on the degree to which this solidarity endures. Signing agreements is one thing. Upholding them is another.