Business

Japan sets policy that will block Huawei and ZTE from public procurement as of April

Kyodo

Japan decided on a policy Monday that will effectively exclude Chinese telecommunication equipment giants Huawei Technologies Co. and ZTE Corp. from public procurement starting in April next year, the government said.

The decision comes amid concerns about security breaches that have already prompted the United States, Japan’s key ally, and some other counties to ban the two companies from supplying infrastructure products.

“It is extremely crucial not to procure equipment that embeds malicious functions including information theft and destruction,” Chief Cabinet Secretary Yoshihide Suga said at a news conference after cybersecurity officials from relevant government ministries and agencies agreed on the plan.

But the government did not explicitly name the companies apparently in consideration of the potential impact on ties between Tokyo and Beijing, which have shown signs of improvement.

The top government spokesman stressed that the new policy is not aimed at excluding any particular companies.

Suga said Beijing has made inquiries about Tokyo’s move, which was first reported last week, and that Japan has told China it will take measures that are “in line with international rules.”

In a statement posted on its website, the Chinese Embassy in Tokyo has expressed strong opposition to the move.

The Japanese government will study what to do with products made by the two companies that it has already procured. In the meeting, the officials confirmed that the government should pay careful attention to the security of systems that deal with national security, highly confidential information and a large volume of personal data.

The administration of U.S. President Donald Trump has banned the use of Huawei and ZTE technology products and services out of concern over their connections with Chinese intelligence under the National Defense Authorization Act introduced in August.

Australia and New Zealand have also excluded both firms from its next-generation mobile network.

In a move that could further intensify the trade war between Washington and Beijing, Canadian authorities arrested Meng Wanzhou, the chief financial officer of Huawei and the daughter of its founder, in Vancouver on Dec. 1 at the request of U.S. authorities.

Meng faces U.S. fraud charges associated with sanctions-skirting business dealings with Iran, according to a Canadian media report.

In April, the U.S. Commerce Department announced a ban on U.S. firms shipping products to ZTE, alleging that the company violated its sanctions against North Korea and Iran.

Huawei and ZTE are known as leading companies in the field of next-generation 5G mobile communications networks.

They have played a crucial role in the “Made in China 2025” blueprint, under which Beijing has been trying to create global leaders in robotics, artificial intelligence and other advanced technologies at the state’s initiative.

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