Chinese telecom equipment giant Huawei is pitching lucrative goodies to European governments in the hopes of fending off bans.

The company has floated multimillions of euros in investments into research facilities and manufacturing centers to countries including the Netherlands, France, Germany, the U.K. and Poland in the past year. Investments were often proposed at meetings where Huaweis executives also pushed back on attempts to restrict the use of its equipment in 5G networks.

The company doubled down on those pledges on Thursday, confirming it will invest €200 million to build a manufacturing site in France. The factory, which would employ 500 people, is the first of its kind in Europe and a far-reaching effort to move Huaweis supply chain to the Continent as it seeks to alleviate concerns that its gear poses security risks.

“Its really the next level of the localization strategy,” said Mathieu Duchâtel, director of the Asia program at French think tank Institut Montaigne. “It makes sense in terms of diversification of the supply chain.”

Huawei has been under immense pressure from the U.S. government in the past year, including through a ban on companies supplying components and software to the Chinese network gear and smartphone maker.

“How can you invest billions of euros in a location where you expect the government to still make a decision that could be discriminatory?” — Huawei spokesperson

Its move to pour millions of investment into Europe also comes with clear demands to stop banning its equipment, officials told POLITICO.

“How can you invest billions of euros in a location where you expect the government to still make a decision that could be discriminatory?” a Huawei spokesperson told POLITICO ahead of Thursdays announcement.

“There needs to be investment clarity and assurances that we know we are there to stay,” the spokesperson added.

European governments are currently implementing measures to reduce telecom security risks, including those associated with Chinese 5G equipment vendors. Capitals have until the end of April to introduce the new measures recommended in the EUs 5G security “toolbox” document.

A billboard advertising telecom products, including 5G, is displayed in Londons Waterloo Underground Station on January 28, 2020 | Justin Tallis/AFP via Getty Images

The U.K. already introduced restrictions on using Huaweis equipment, including banning it from “core” networks and introducing a 35 percent market share cap to use it in “radio access networks” like base stations and antennas. France is currently rolling out new restrictions on using Huawei equipment, including blocks on areas and cities deemed sensitive.

Alsace courted, not confirmed

While Huaweis announcement didnt disclose where the factory would be located, top-level staff courted French local lawmakers in the Alsace region in the months leading up to Thursdays announcement.

Abraham Liu, the companys chief EU representative, visited Strasbourg twice in the past months — once to deliver a public speech to members of the European Parliament suggesting investment in a factory.

Chief public affairs executive Catherine Chen visited the French region in January to meet with lawmakers about setting up a manufacturing site, local paper Le Canard Enchaîné reported. The companys founder Ren Zhengfei also visited Alsace in 2019, a Huawei spokesperson said.

A spokesperson for the Grand-Est region, which includes Alsace, did not immediately respond to a request for comment.

A Huawei spokesperson said Thursdays decision did not go into details about the specific location of the factory.

Dutch investment pitch

The Chinese vendors moves to pitch investments are a key part of its strategy to prevent partial bans from popping up across Europe.

Huawei confirmed its plans to build a British research center in Cambridge last May, set to open in 2021.

Correspondence between the Dutch government and Huaweis local, European and global executives — obtained by POLITICO through a freedom of information request in the Netherlands — show how the telecom giant floated its investment pitch even as it pleaded with policymakers in The Hague not to impose new 5G security restrictions.

The letters and meeting notes date back to December 2018, when the government started considering imposing stricter requirements that could limit or downsize Huaweis market presence.

Huawei said in numerous exchanges that it was “considering” setting up a multimillion-euro research and development center in the Netherlands while holding off for the government to solve its domestic security discussions.

At the end of March, one of Huaweis rotating chairmen (the company has three) sent a letter to Dutch Prime Minister Mark Rutte to angle for a meeting in April.

“Regretfully, mischievous attempts are being made to discredit Huawei in the eyes of European governments and undue pressure is being put on them,” said the chairman in his letter to Rutte. “I am confident that these countries, including your country, will not yield to that pressure and that you will base your position solely on the facts and your own experience.”

After flagging the potential R&D center, the letter goes on to say, “I would like to discuss with you how we can continue to develop our presence in the future.”

Huawei sent a letter to Dutch Prime Minister Mark Rutte requesting a meeting | Aris Oikonomou/AFP via Getty Images

Other correspondence dates back to the Read More – Source

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