Japan has apparently excluded Huawei as a potential equipment supplier for the country’s 5G infrastructure build-out. The decision was made after Japan’s key allies — including the U.S., New Zealand, and Australia — enacted laws to prevent Huawei from supplying 5G equipment due to security concerns. It is believed that Huawei might be colluding with the Chinese Communist Party (CCP) to spy on other countries.
Banning Huawei 5G equipment
Cybersecurity officials from various Japanese governmental departments reached an agreement to block Huawei, but have not explicitly named the company publicly to avoid straining ties with China. A ban from Japan would be a huge setback for Huawei, as it would be the first time that an Asian country has pushed back against its business.
In August, various Japanese media outlets reported that the government might ban Huawei. The company dismissed such reports as unsubstantiated rumors. As of 2017, Huawei had about a 13 percent share in the Japanese telecom equipment market. With the new ban, the company’s market share is expected to drop over the coming years.
Meanwhile, Japanese mobile carrier SoftBank will be replacing their Huawei 4G hardware with equipment from Nokia and Ericsson. For 5G, the company is said to have contracted two European firms. Since SoftBank is the only telecom carrier in the country that uses Huawei hardware, the latest move would mean a complete boycott of Huawei by Japanese private telecom carriers.
Beijing is reportedly furious with Japan’s action and has termed it discriminatory. “There is no evidence that Huawei and ZTE products have security risks… [The ban might signify] discriminatory practices against specific companies in specific countries, which is unfavorable not only for Japan in attracting foreign investment, but also for economic cooperation between China and Japan,” the Chinese embassy in Tokyo said in a statement (Nikkei Asian Review).
Despite China’s protest, it is very unlikely that Japan would consider using Huawei or any other Chinese tech in the government sector anytime soon.
Private sector boycott
The Japanese administration is also planning to expand the boycott of Chinese tech equipment to the private sector, especially in sensitive industries like communications, transportation, energy, finance, and so on. Such industries are considered to be critical for the efficient functioning of society. As such, the Japanese government does not want companies to be vulnerable to Chinese technologies and subsequent espionage.
“The government will create a critical infrastructure investigation committee in January under its cybersecurity strategy headquarters, led by Chief Cabinet Secretary Yoshihide Suga. The committee will explain its guidelines to representatives from groups including the Federation of Electric Power Companies of Japan, the Japan Water Works Association, the finance industry, and the insurance sector, and ask them to refrain from buying vulnerable communications equipment,” according to Nikkei Asian Review.
However, the Japanese government will stay away from officially preventing these companies from using Chinese tech hardware. Instead, the administration will negotiate and request private sector companies to comply with its directions.
The U.S. has already banned the use of Huawei products in government departments through the National Defense Authorization Act passed in August this year. Australia and New Zealand followed suit and banned the company’s 5G hardware. Countries like the UK and Canada are also said to be seriously considering banning Huawei products.