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In Rebuke to U.S., Germany Considers Letting Huawei In



BERLIN-The German government is leaning towards letting Huawei Technologies Co. to participate in building the nation's high-speed internet infrastructure, several German officials said, the latest sign of ambivalence among the US allies over Washington's push to ostracize the Chinese tech giant as a national security risk

A small group of ministries reached a preliminary agreement two weeks ago that still needs formal approval by the full cabinet and parliament.

The Trump administration has been pushing its allies for months to restrict Huawei's participation in building their next-generation mobile infrastructure – or even pulling its equipment from existing networks.

But unwillingness in these countries to delay the roll-out of so-called 5G services, the potential additional costs of picking new vendors, and the lack of evidence that Huawei can use its equipment to eavesdrop on or disrupt communications have stymied the U.S. efforts.

In the UK, Washington's closest ally in Europe, a review currently underway is expected to conclude that company products should still be allowed in less vulnerable parts of its network, according to British officials.

And across Eastern Europe, where the U.S. has traditionally held considerable sway, governments have been hesitant to drastically restrict Huawei's access, partly out of concern that could antagonize China, and a big investor in the region.

The German government has been drafting changes to the country's telecommunications laws-independent of the Huawei concerns. While Berlin had initially considered shaping the rules in a way that would make it difficult for Huawei to bid for infrastructure contracts, officials said the stricter security requirements for equipment vendors, including a no-spy pledge, should not be deliberately set so high as

A recent probe by the German cybersecurity agency with help from the US and other allies failed to show that the Chinese company could use its equipment to clandestinely siphon off data, according to a senior agency and other government officials

An official at the Federal Office for Information Security, known as BSI, and two cybersecurity experts at the interior and foreign ministries said the probe in Germany and others among the allies had not uncovered any indication of wrongdoing by Huawei

Germany lags behind the rest of Europe ̵

1; and most of Asia – in internet speed, making a fast 5G rollout crucial to enabling a range of new services such as autonomous vehicles and high-resolution video streaming. German industry representatives also backed a rapid rollout, partly out of concern, that China could retaliate by cutting off German companies from the Chinese market

"We missed the boat here in Germany with regard to broadband internet. "We need fast internet, we need it fast, and we need it cheap," said one senior government official involved in the case.

As well as being a market leader in network infrastructure components needed to build 5G networks, Huawei also

Another official said conversations with the US and British services thought to have more insight into potential vulnerabilities built into Huawei's equipment had proved inconclusive.

In Britain, government officials plan to complete a review of the telecom supply chain by this spring. The goal is to determine whether British telecom networks are overly dependent on Huawei, said the people familiar with the review

. unveiled sweeping charges against Huawei's Chinese tech firm in January. WSJ's Shelby Holliday breaks down the charges.
    

U.K. officials share the American concern that Huawei could put its Western rivals out of business and be the only option for telecom equipment in the near future, the people said. But unlike their U.S. counterparts, British officials believe they can afford some Huawei equipment in the U.K. networks, the people said.

British officials are considering allowing U.K. wireless carriers to use only cellular tower equipment from Huawei, the people said. Such equipment, as opposed to "core" network equipment that transfers calls and data, presents a minimal risk because a hacker could access only limited data, the people said. U.K. Officials are also considering requiring wireless carriers to use multiple suppliers, the people said.

Huawei is already cooperating closely with the German government. Last fall, the company opened a security lab near the BSI headquarters in Bonn, where government officials can review company products and source codes. A Huawei spokesman said the company would support tougher telecom security rules and would sign a no-spy agreement

This would put Huawei at odds with Chinese law. A Vice President Mike Pence warned in a speech in Germany last weekend could compromise the security of communications in markets that allow Huawei in.

Addressing the the same event, Yang Jiechi, and the Chinese Foreign Affairs Officer, rejected the claims and said Huawei was cooperating with European companies

"Chinese law does not require companies to install backdoors … or spy," Mr.

Berlin's preference to give Chinese vendor access has sparked some pushback among a small group of politicians and civil servants who think the government is underplaying security risks due to short-term economic considerations. also concerned about opening another dispute with the Trump administration, adding to a list of flashpoints ranging from trade to Iran nuclear deal and Nord Stream 2, and a German-Russian pipeline project Washington is determined to stop

US Ambassador to Germany Richard A. Grenell said German policy makers should consider that China has gathered and exploited data on an unrivaled scale.

"They leverage an array of legal tools and other mechanisms to exercise control and influence companies to cooperate with Chinese intelligence and security services. This applies to both state-owned enterprises and ostensibly private firms, "said Mr. Grenell

Huawei's founder, former Chinese army engineer Ren Zhengfei, told British Broadcasting Corp. on Monday that "there is no way the US can crush us … The world can not leave us because we are more advanced. Even if they persuade more countries not to use us temporarily, we can always scale things down a bit. "

" If the lights go out in the West, East will still shine, "he added. "And if the North goes dark, there is still the South. America does not represent the world. (19659028) -Stu Woo in London and Dan Strumpf in Hong Kong [19659904] Write to Bojan Pancevski at bojan.pancevski@wsj.com and Sara Germano at sara.germano@wsj.com


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