China Threatens EU Plans to Ban Huawei and ZTE

Chinese Economic Coersion on the EU

China has warned it will retaliate if the EU adopts a proposal to ban Huawei and ZTE equipment across the bloc. Beijing’s mission to the EU urged removal of language labeling Chinese vendors as “high risk,” and said it would undertake reciprocal measures — including investigations of EU businesses — if the Cybersecurity Act forces European firms to phase out Chinese gear.  This comes against a backdrop of EU caution over business with China. 

The proposal (pushed by Commission EVP Henna Virkkunen) would require member states to phase out Huawei and ZTE from critical telecom infrastructure under the Cybersecurity Act. China asked the commission to delete wording that brands Chinese equipment a cybersecurity concern or companies as “high risk.”

Economic Coersion Tactics: Beijing warned of “corresponding countermeasures” and potential investigations of EU entities if the EU proceeds.

Several European countries and the UK have already restricted Huawei in sensitive network areas; critics say bans reduce supplier choice and raise costs, with Nokia and Ericsson as the main alternative vendors.

German and Spanish Opposse the Plan

Germany and Spain are opposing an EU-wide ban. They argue that national governments should keep control over such decisions and warn that a blanket restriction could trigger retaliation from China and raise costs for Europe’s digital and AI infrastructure.

We think Germany is stating this strategically not to incur Chinese wrath since the German economy depends on China. In the case of Spain, the current left-wing government is actively courting China and Chinese investments.

However in 2024, Germany’s ruling coalition had agreed to phase out Huawei and ZTE equipment from the country’s 5G networks over the next several years, citing national security concerns. The plan sets deadlines for removing components from the core network by end-2026 and from the access/transport network by end-2029.

The decision follows a year-long security review and reflects pressure from security concerns, especially around sabotage and espionage. German telecom operators Deutsche Telekom, Vodafone, and Telefonica Deutschland have agreed to contracts enforcing the removal timeline.

The plan is a compromise among coalition parties, with stricter security demands from the Interior Ministry and more cautious views from the Digital Ministry.  Huawei disputes the threat claims, while Germany is aligning more closely with broader Western efforts to limit reliance on Chinese telecom technology.

Europe Following US Santions on Huawei and ZTE

U.S. sanctions and security concerns targeted Huawei over fears of spying and Chinese technological influence, but the company has still managed a major comeback in China. Backed by the Chinese government, Huawei has expanded into semiconductors, AI chips, software, and other tech areas, making it a key player in China’s push for technological independence. 

The U.S. blacklisted Huawei over national security and spying concerns, especially tied to telecom networks and access to advanced chips.  The sanctions severely hurt Huawei’s global smartphone and equipment business, but it remained strong inside China.  Huawei responded by building domestic alternatives, including chips, HarmonyOS, AI hardware, and other tech businesses.  Its comeback has intensified U.S.-China competition over semiconductors, AI, and global tech leadership.  Finally, Huawei denies spying claims and says U.S. actions are aimed at preserving American tech dominance.