China has formally warned the European Union that it will take matching steps against the bloc and European companies should the EU press ahead with a proposal to exclude Huawei Technologies Co. equipment from telecom networks across Europe. The warning was delivered in a statement by China\'s mission to the EU at a meeting in Brussels on Wednesday.
According to the mission\'s statement, Chinese officials asked the European Commission to remove wording from a proposal put forward by Commission Executive Vice President Henna Virkkunen. The contested language would identify equipment from China as a cybersecurity concern and classify companies from China as high-risk suppliers.
Virkkunen is pursuing mechanisms that could require EU member states to phase out gear from Huawei and ZTE Corp. in their telecommunications infrastructure. In January, she proposed mandatory measures under the Cybersecurity Act with the stated aim of strengthening network security.
The Chinese mission said the EU\'s adoption of the proposal would prompt China to take "corresponding countermeasures". The statement said China could open investigations into the EU or into EU businesses and take reciprocal actions if the legislation forces European firms to remove Chinese-made equipment.
Restrictions on Huawei equipment are not unprecedented in Europe. Several EU countries and the United Kingdom have already limited Huawei\'s presence in sensitive parts of their telecommunications networks, citing security concerns tied to the company\'s links to China. The European Commission previously issued voluntary advice in its 5G toolbox that encouraged countries to restrict the use of vendors deemed high-risk.
Implications for markets and industry are concentrated in the telecommunications and technology sectors, where supplier decisions affect network operators, equipment vendors and the supply chains of European firms. The prospect of formal EU restrictions and Chinese countermeasures also bears on trade exposure for companies that rely on cross-border equipment and services.
At present, the available record is limited to the Chinese mission\'s statement and the public outline of Virkkunen\'s proposal. The statement outlines potential investigative and reciprocal actions but does not specify particular measures or timelines.