Keep knowledgeable with free updates
Merely signal as much as the Chinese language politics & coverage myFT Digest — delivered on to your inbox.
China is curbing using European telecom package suppliers Nokia and Ericsson in its networks as President Xi Jinping pushes to decouple the nation’s vital tech infrastructure from the west.
Two individuals acquainted with the matter stated Chinese language state-backed consumers of IT tools — which embrace cellular community operators, utilities and different industries — have begun extra carefully analysing and policing international bids.
That course of has required contracts by Sweden’s Ericsson and Finland’s Nokia to be submitted for “black box” nationwide safety evaluations by the Our on-line world Administration of China the place the businesses will not be instructed how their gear is assessed.
The evaluations by the highly effective tech watchdog can stretch three months or longer. Even in circumstances the place the European teams in the end safe approval, the prolonged and unsure audits typically depart them at a drawback to Chinese language rivals that face no such scrutiny, the individuals stated.
“If China is doing this for national security reasons, the question is why Europe does not reciprocate by applying the same standard,” stated one of many individuals, who requested to not be named.
Beijing’s effort to curtail European distributors follows an identical drive in Europe, the place some governments have warned in opposition to working with Chinese language telecoms giants Huawei and ZTE. However up to now these calls have had a small affect on the Chinese language firms’ market share on the continent.
China’s nationwide safety evaluations come as Xi pushes a self-strengthening drive aiming to change broad swaths of international expertise. Final month, with Russia’s Vladimir Putin and North Korea’s Kim Jong Un at his facet, Xi declared China “does not fear power or coercion” because it “stands strongly on its own with self-reliance.”
Beijing’s efforts to section out European tools deepened after a 2022 replace to the cyber safety legislation, which required operators of “critical information infrastructure” to submit any buy with potential safety dangers for evaluate by CAC.
State consumers of telecom tools now require bidders to incorporate detailed documentation on each element of their methods and the portion of native content material, stated the individuals acquainted with the method, noting international teams had been even together with the main points of Chinese language R&D efforts to attempt to bolster their purposes.
Prospects ship the detailed packets to CAC for approval, which evaluations the bundle and instantly notifies the state-owned consumers whether or not they can proceed with the purchases.
Beijing’s rising gross sales restrictions have collapsed Ericsson’s and Nokia’s mixed market share in China’s cellular telecoms networks to about 4 per cent final yr from 12 per cent in 2020, in keeping with analyst Stefan Pongratz at analysis supplier Dell’Oro Group.
Each firms have reported declining China revenues, with Nokia’s in-country revenues falling by double digit percentages from 2023.
“It’s so slow that even the breadcrumbs of market share [the European companies] get from major tenders are often shifted to Chinese vendors,” stated one of many individuals.
The European Union Chamber of Commerce in China just lately stated the localisation necessities in IT and telecom posed an “existential threat” to the continent’s tech teams. Almost three quarters of respondents to the chamber’s current member survey stated the restrictions had misplaced them enterprise.
European policymakers have additionally voiced safety issues about Chinese language telecom distributors, warning of espionage dangers and potential backdoor entry. However most capitals have been gradual to impose bans, deterred by the low value of Chinese language tools and the need to keep away from upsetting Beijing.
Round 5 years after the European Fee urged member states to bar high-risk suppliers reminiscent of Huawei and ZTE, solely 10 of the EU’s 27 nations had launched restrictions as of June 2025, in keeping with regulatory analysis agency Cullen Worldwide.
Huawei and ZTE have retained 30 to 35 per cent of the European cellular infrastructure market, down solely 5 to 10 share factors from 2020, knowledge from Dell’Oro Group reveals.
Germany has 59 per cent of put in 5G gear sourced from Chinese language teams, in keeping with John Strand of Strand Seek the advice of, despite the fact that the nation plans to section out excessive threat Chinese language distributors by 2029.
“All the mobile network equipment in Berlin is Chinese,” stated Strand. “Germany has big industries like chemicals and cars that don’t want relations with China to be hurt.”
Ericsson and Nokia declined to remark. CAC didn’t reply to a request for remark.
