Huawei’s Poland spying case threatens China’s efforts to win over Eastern and Central Europe

  • Latest controversy surrounding Chinese telecoms giant could hit Beijing’s efforts to boost its presence in the region
PUBLISHED : Monday, 14 January, 2019, 10:04pm
UPDATED : Monday, 14 January, 2019, 11:11pm

The controversy involving Huawei Technologies in Poland will not only exacerbate the ongoing crisis surrounding the Chinese telecoms giant’s global operations, but also threaten Beijing’s overtures towards Eastern and Central Europe, analysts have said.

Chinese observers also warned that the escalating tensions over the arrest of a Huawei employee in Poland on spying charges could put further strains on China’s relations with Europe amid simmering tensions over trade and growing concerns about the Belt and Road Initiative.

Last week’s detention of Wang Weijing, Huawei’s sales director in Poland, showed the US-China rivalry over technology pre-eminence has spilled over into Europe, according to Wang Yiwei, head of the Centre for EU Studies at Renmin University of China.

“Clearly, the United States is desperate to check China’s rapid economic and technological ascendancy and is trying to use its allies and partners in Europe to curb Huawei,” he said.

The latest controversy followed the December arrest of Meng Wanzhou – also known as Sabrina Meng and Cathy Meng – Huawei’s chief financial officer in Canada, who was later released on bail.

The world’s largest telecoms equipment supplier is facing intense international scrutiny led by the US amid growing suspicion over its ties with the Chinese government and military.

Global Times, a tabloid controlled by the Communist Party mouthpiece People’s Daily, lashed out at Warsaw on Monday after Poland’s internal affairs minister called for the European Union and Nato to take a “joint stance” on Huawei.

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Describing Poland as a US accomplice, the nationalist newspaper said in an editorial that Poland “must pay for the offence” and “China must not be soft at this point”.

“Beijing should resolutely negotiate with Warsaw and conduct relative counter-measures, helping the world understand that Poland is an accomplice of the US,” it said, without elaborating on what Beijing should do.

Poland, which is Huawei’s headquarters for Central and Eastern Europe and the Nordic region, is strategically important for both the company and Beijing’s European policy, according to Pang Zhongying, a Beijing-based international affairs expert.

“After having suffered setbacks in major English-speaking nations, such as the US, Australia and New Zealand, it has become even more challenging for Huawei to maintain its firm foothold in Central and Eastern Europe,” he said.

“It could even be a fatal blow for Huawei’s global strategy if it fails in Europe,” which is Huawei’s biggest foreign market at the moment, Pang said.

Both Pang and Wang Yiwei also said Wang’s arrest will test Beijing’s relations with Poland and complicate relations with Central and Eastern Europe.

Beijing has invested heavily in Eastern and Central Europe in recent years under the Belt and Road Initiative, an ambitious transcontinental infrastructure programme.

Since 2012, when China held the first “16+1” summit with central and eastern European countries in 2012, it has pledged around US$15 billion in investments in the region.

Poland, one of the biggest economies in the region which hosted the first regional summit, has enjoyed close trade ties with Beijing and rolled out a “Go China Strategy” five years ago.

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But the move has caused growing concern among Western European countries, and EU Commissioner Johannes Hahn last year warned of the danger that Balkan states risked becoming “Trojan horses” for Chinese influence.

“Like most other European countries, Poland relies heavily on the security and military alliance with the US and the latest arrest is another example of Warsaw trying to please Washington by having aligned itself with the US over security concerns about Huawei,” Wang said.

Other European countries and probably many others around the world may face a similar dilemma in future, he continued, as they will be increasingly caught up in the showdown between Beijing and Washington.

Norway and Sweden recently said they would investigate whether Huawei should be allowed to build 5G infrastructure due to security concerns, while the Czech government banned civil servants and ministers from using the company’s phones for similar reasons.

Pang also said the latest arrest also showed despite their trade and political differences, Europe and the US may have found common ground in countering China.

“It is a difficult time for China’s relations with Europe as well, and we should be careful about a possible chain reaction in the trilateral relationship between China, Europe and the US.

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“Amid the trade war with the US, China’s ties with Europe could become even more challenging because European countries share a lot of concerns with Americans about China’s unfair trade policies.

“Many analysts believe Europe may want to follow [US President Donald] Trump’s example and take a tougher stance on China if Beijing makes important concessions in trade talks with Washington,” he said.

Both Pang and Wang also warned the trend could affect a belt and road summit to be held in April and this year’s 16+1 summit in Croatia.

Marcin Przychodniak, a China analyst at the Polish Institute of International Affairs, said he did not expect a negative policy change in Central and Eastern European countries towards China.

“I think Poland is taking a more active stance trying more to focus on bilateral issues with China rather than regional mostly due to negative reviews of 16+1.

“But now that might not be possible in the short term due to possible Chinese retaliation in the recent case,” he said.

Chinese Foreign Ministry spokeswoman Hua Chunying said on Monday that China hoped the Polish side would work to create mutual trust and maintain relations.

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Hua said “some people” sought to use groundless accusations about security threats to “suppress and restrict Chinese technology companies’ development abroad”.

“We urge relevant parties to cease the groundless fabrications and unreasonable restrictions toward Huawei and other Chinese companies, and create a fair, good and just environment for mutual investment and normal cooperation by both sides’ companies,” Hua said.

“Using security reasons to hype, obstruct or restrict normal cooperation between companies in the end will only hurt one’s own interests,” she added.

Additional reporting by Keegan Elmer