"Portugal paved the way for a ban on Huawei from the country's 5G network!" Germany's "Economic Weekly" reported on the 28th that the Portuguese government issued a statement on its website this week, prohibiting the country's 5G network from using equipment from suppliers headquartered outside the European Union or not members of the "NATO" or "Organization for Economic Cooperation and Development". This means that Portugal will now ban the entry of equipment from Chinese companies such as Huawei from the country's 5G network.
The Portuguese government, the cybersecurity assessment body, the High Commission for Cybersecurity (CSSC), noted in a document that businesses from outside these jurisdictions are considered to be "high risk" to the country's cybersecurity. Although the document does not name specific companies to be banned. However, mainstream media such as Bloomberg and the Financial Times agreed that the decision was effectively excluding Chinese equipment and service providers, including Huawei.
European media coverage.
According to the law passed last August, the Portuguese government has the power to decide "to exclude, restrict or deactivate the use of equipment or services of a telecommunications company" and to set terms and deadlines that operators must comply with.
Since the United States asked allies to block Chinese telecom companies on national security grounds, whether Huawei equipment is used in 5G networks has become a major issue in Europe. Some European governments use the term "high-risk suppliers" to refer to Chinese telecom companies such as Huawei.
At present, countries such as the United Kingdom, Denmark, Sweden, Estonia, Latvia and Lithuania have banned Huawei from participating in the construction of their 5G networks. Germany's interior ministry also said earlier this year it would review the use of Chinese equipment in the country's 5G network to see if the law needed to be changed.
European 5G antenna.
Portugal is one of the few European countries to resist the U.S. government's lobbying. European media believe that today, Portugal's decision represents a "major shift" in the relatively moderate relationship between Portugal and China, and will also hit Huawei's development in Europe with the ambitions of China Telecom Equipment Group in Europe.
Just last November, Huawei announced on its official website that its Hertz platform FDD 8T8R antenna was commercially deployed in Portugal for the first time, which will help operators build 5G infrastructure networks with excellent performance and energy saving. If Huawei is eventually evicted from Portugal's 5G network, Huawei's efforts in the country will be in vain and deal a major blow. Huawei said in a statement that the company was not aware of and had not been consulted on the matter, and that the company was still collecting information for evaluation purposes, hoping to continue to serve Portuguese customers.
The Prime Minister of Portugal visits China.
Of course, this will also be a big loss for Portugal. Local media had predicted that 5G networks and related services would drive Portugal's gross domestic product (GDP) growth and bring about 130,000 jobs, and if Huawei was excluded from the construction of 5G networks, it could cost the Portuguese economy 1.1 billion euros by 2023. The problem is that Huawei has helped them and is expelled halfway.
In fact, the Portuguese government has always welcomed Chinese companies. In 2019, Portuguese Prime Minister Costa said Chinese companies "have demonstrated full respect for the mainland's legal framework and market norms." At the time, Huawei had signed cooperation agreements with a number of Portuguese telecommunications companies to supply equipment for the country's 5G network.
But since the beginning of this year, Portugal's main telecom operators Altice, NOS and Vodafone have announced that they will not use Huawei equipment in the 5G core network due to concerns that China's involvement in key infrastructure may endanger security.
Information on Huawei's official website in 2022.
The major change in Portugal's attitude towards Chinese telecom companies has also raised fears that in the future the country may restrict investment by Chinese companies in other areas, or even suddenly change cooperation agreements.
The Sino-Portuguese trade dates back to the 16th century, when traders used their hub in Macau to ship large quantities of Chinese silk and Asian spices back home. Today, Portugal is one of the top European destinations for Chinese investment.
Official figures show that nearly 100 billion yuan of foreign direct investment (FDI) has poured into the country from China since the turn of the century, making it Portugal's fourth-largest foreign investor, after neighboring Spain, France and the United Kingdom. This places Portugal among the top 10 destinations for FDI in Europe, ranking higher than larger economies such as Belgium and the Netherlands.
Chinese companies have invested a lot in Portugal.
Chinese investors have provided much-needed cash infusions to Portugal, such as China's Three Gorges 2011 acquisition of a 21 percent stake in state power company EDP for about $3 billion, the largest acquisition by a Chinese investor in Europe at the time. The Chinese company also bought a 49% stake in EDP Renewables for $400 million in the same year and in 2012 a 25% stake in REN, which operates Portugal's power grid. There is also a lot of investment in banking, insurance, and healthcare. China's Fosun International, which holds about 30 percent of Portugal's largest bank, also invests in the insurance industry and Luz Saude, the country's largest healthcare provider.
Portugal also became the first EU country to buy Chinese-made metro trains, ordering 18 low-energy, high-tech smart trains worth more than $50 million. China Railway's Tangshan train will run on Porto's metro line.
Lisbon, the capital of Portugal.
Portugal's new 5G policy document shows that European countries, even countries with the most stable economic policies, are not static, and will be "turned around" under the pressure of the United States and the European Union. When Chinese companies invest in any European country, they must consider future policy risks.