A woman walks by a Huawei logo at a shopping mall in Shanghai, China, on Thursday. Photo: REUTERS file
tech

Japan to bar Huawei, ZTE from gov't contracts, sources say

32 Comments
By Yoshiyasu Shida and Yoshifumi Takemoto

Japan plans to ban government purchases of equipment from China's Huawei Technologies Co Ltd and ZTE Corp to beef up its defenses against intelligence leaks and cyberattacks, sources told Reuters.

Chinese tech companies are under intense scrutiny from Washington and some prominent allies over ties to the Chinese government, driven by concerns they could be used by Beijing for spying.

A government ban in Japan will come after Huawei has already been locked out of the U.S. market and after Australia and New Zealand have blocked it from building 5G networks. Huawei has repeatedly insisted Beijing has no influence over it.

The Yomiuri newspaper, which first reported the news of Japan's planned ban earlier on Friday, said the government was expected to revise its internal rules on procurement as early as Monday.

The government does not plan to specifically name Huawei and ZTE in the revision, but will put in place measures aimed at strengthening security that apply to the companies, a person with direct knowledge and a person briefed on the matter said.

Japan's chief government spokesman, Yoshihide Suga, declined to comment. But he noted that the country has been in close communication with the United States on a wide range of areas, including cybersecurity.

"Cybersecurity is becoming an important issue in Japan," he told a regular news conference. "We'll take firm measures looking at it from a variety of perspectives."

ZTE declined to comment. Huawei did not immediately comment.

Chinese foreign ministry spokesman Geng Shuang expressed "serious concern" about the reports.

The essence of China-Japan business and economic cooperation is mutual benefit and win win, and both companies have legally operated in Japan for a long time, he told a daily news briefing in Beijing.

"We hope the Japanese side can provide a fair competition environment for Chinese companies operating in Japan and not do anything to harm bilateral cooperation and mutual trust."

Huawei supplies some network equipment to private Japanese telcos NTT Docomo and KDDI Corp.

And SoftBank Group Corp has a long relationship with Huawei - which in 2011 became the first Chinese firm to join Japan's conservative Keidanren business lobby - and has partnered with it on 5G trials.

"The government will not buy where there are security concerns but it is difficult to restrict procurement by private companies," one of the sources said.

Docomo and SoftBank did not immediately respond to a request for comment.

"While closely observing changes we will consider appropriate steps," a KDDI spokeswoman said.

Some private companies elsewhere, though, have distanced themselves from the Chinese firms.

In the United States, SoftBank's wireless subsidiary Sprint Corp said it no longer sources equipment from Huawei or ZTE. SoftBank is trying to complete the unit's sale to T-Mobile US Inc.

And Britain's BT Group said on Wednesday it was removing Huawei's equipment from the core of its existing 3G and 4G mobile operations and would not use the company in central parts of the next network.

ZTE's Shenzhen-listed shares rose 1.4 percent on Friday after sliding 5.7 percent the previous day amid a global stocks sell-off sparked by the arrest in Canada of Huawei's top executive at the behest of the United States. Huawei is unlisted.

© (c) Copyright Thomson Reuters 2018.

©2018 GPlusMedia Inc.

32 Comments
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Always figured that the thin line between the Chinese government and "private" entities would come back and bite them. Unless China changes, they will never be a global player in the IT market.

25 ( +27 / -2 )

“Bandwagon jumped on”

1 ( +6 / -5 )

I find it odd that no one has banned Chinese made technologies altogether

18 ( +20 / -2 )

Spyware 2.0

10 ( +11 / -1 )

Good. If Huawei wants to stay close to the CCP, that's their choice. But given that the CCP is a ruthless dictatorship, don't go blaming anyone else when you're shunned.

17 ( +18 / -1 )

This should've been done over a decade ago. Not sure why it's taken so long. Finally. China's notorious for stealing tech.

13 ( +13 / -0 )

Why demonstrations and protests are not happening in China about the trade war?

2 ( +4 / -2 )

Excellent news. Communist China has been stealing Western and Japanese high tech for years, and Huawei is a proxy PRC government company. As is EVERY company in PRC.

I am certain the next step will be to ban the sale of PRC made cellphones. Democratic governments like Japan are finally standing up to PRC. Furthermore, Huawei has been doing business with Iran, which USA will not allow.

9 ( +13 / -4 )

May I know, why Japan is involved in this ???. I thought Japan wants peace & trade with China ???. Are the Japanese people agreeing with this action ???.Never start a fight , just because someone did. Or is it Japanese show to big brother America that Japanese are on yr side Trump. Pls tax us and we, Japanese have money ???.This is not a time to play, taking side games Or trade & friendship with China is tatemae ???. Pls do not make anyone regrets about , taking sides especially not good Japanese people.

-21 ( +3 / -24 )

That's good, no one wants spyware. Good relations require trust not scams

15 ( +16 / -1 )

Basically, you have a choice of buying a phone that will let China spy on you, or buying one that will let the USA spy on you. There are no spy-free phones. For most non-Chinese people, it makes more sense to let the Chinese do the spying, as they have less reach. In Japan's case it makes more sense to let the USA spy on them.

-11 ( +2 / -13 )

This was one of the most frustrating issues that I was very worried for a long time. I remember several years ago, one of the Chinese softwares was found sending every typing of users to its company in China.

The prohibition must also include all wi-fi equipments, security cameras, motherboards with Chinese parts.

11 ( +12 / -1 )

About time! China is communist after all. Controls the people.

12 ( +12 / -0 )

@Schopenhauer I remember back around the year 2000-2001, not long before 9/11 there was a short report coming out of China that reporting negative stories about China in the foreign (and local) media was from then on prohibited. At that time there were already hundreds of thousands of demonstrations and other problems being reported in China. Occasionallly some stat still gets leaked out. It’s not difficult to imagine what’s going on at the present. I’d even say China isclose to collapse given the recent report that the government has also banned twitter.

4 ( +6 / -2 )

As stupid as this sounds, if you’re going to have a government spy on you, at least make it our own.

10 ( +11 / -1 )

Simple fact, China specifically under CCP CONTROL (a party BAE/party power before country) should never be trusted.   They deny freedom to their own people not because of any grand ideal, but because a small group of people in a country of 1.5+ billion want to to control the citizens instead of serving them properly.

Corporations from other countries kept sending their manufacturing to China because they loved "savng" money more than their own security, property and intellectual rights.   China stole the manufacturing blue prints, reverse engineered, and sold bugged tech products to any idiot willing to buy (including the good ol' US of A).  Especially the really dumb corporations and government buyers.   I know African and other Eastern countries that signed up with Chinese contracts are also going through this.    Free money with less restrictions than the US?  Count them in!  Oh wait! Can't pay China back and default on their "goodwill" loan?  China wants to build a military base in your land then since you can't pay them back...  Plus they still sell the cheapest tech/weapons and the only risk is exposing your government and corporate secrets to the CCP.

11 ( +11 / -0 )

They cannot "ban", 100% Chinese made technologies, what they're banning is technology, i.e., chips used in these devices that are mainly Made in the USA. Most of the important and difficult to make chips used in the communication world are Made in the USA. This is why recent new laws in the USA have been passed whereby it forbids certain U.S. Communication companies to be bought out by a foreign entity.... and many deals have been denied recently due to this. This is why China is doing everything possible to design their own chips and manufacture them.... they need the USA too much and they do not like it.

4 ( +4 / -0 )

This was one of the most frustrating issues that I was very worried for a long time. I remember several years ago, one of the Chinese softwares was found sending every typing of users to its company in China.

Motherboard? You just need to google Supermicro embedded spy chip and you can find that.

4 ( +4 / -0 )

Fools will do foolish things, that is why they are always fools.

-2 ( +2 / -4 )

China was caught placing spy chips already. Why would anyone use Huawei when they can just get an Apple, or Samsung phones?

6 ( +6 / -0 )

Now China will have one more reason to ban something from Japan. Huawei has been around for quite some time and operating in many countries around the world. Why would there be a security threat if Japan doesn't try to harm China?

-6 ( +0 / -6 )

China was caught placing spy chips already. Why would anyone use Huawei when they can just get an Apple, or Samsung phones?

They also could have spy chip or malicious SW right at the factories as well. Actually, anyone should pay attention to anything come out from the production line in China.

5 ( +5 / -0 )

Just to clarify, this rule doesn't apply to Japan's private sector.

In other word, Softbank is free to deploy the Chinese 5G equipment nationwide as planned.

Softbank has been a heavy user of Chinese telco equipment and Japanese public didn't seem to care.

2 ( +3 / -1 )

@akie

Fools will do foolish things, that is why they are always fools.

You're correct, but I think the people you think are the fools and the people everyone else thinks are the fools are completely different...

@commanteer

Basically, you have a choice of buying a phone that will let China spy on you, or buying one that will let the USA spy on you.

You must have missed all the ongoing legal battles between Apple and the US government. Apple might be spying on you through their phones to sell you stuff, but they aren't letting the government do it.

4 ( +4 / -0 )

Huawei got where it was by extorting and stealing technology from the West, notably from Ericsson. This is why the company should have been banned long ago.

Huawei's ascent underscores how globalization will eventually strangle the West, apart from its billionaires.

3 ( +3 / -0 )

The problems I have is how did you know the west ewuipments suppliers don't have the same problems their country government still can use them to spy on other country . No doubt the Huawri have certain control by government entity but I believe the extent of the fear are exaggerated .ultimately the country that use this tactic will pay in future.bevause China not going to stop developing it own industry ,it know too depend on outside are like death sentence you will be dictated by those country .Will see how this story end .

-1 ( +0 / -1 )

Huawei's ascent underscores how globalization will eventually strangle the West, apart from its billionaires.

Globalization will end because the world is becoming multi-polar.

You have Russia and China as the foundation of one block and the U.S and Europe as the foundation of another. And you have question marks on Asean, on South America and Africa, which, if they are smart, will try to play that middle ground for as long as possible. To take the benefits, where they can, from both sides.

Interestingly, its India that is the most important player in the whole game going forward since they straddle good relations with Russia and increasingly good relations with the U.S and its partners and I don't really see any sign of that changing because the fundamentals are fairly well locked in. When it comes to India's desire to have an alternative to Western defense tech, the desire to offset Chinese aggression on its borders and the long held desire to keep one step away from any outright formal alliances. This is why India flirts with both the BRIC group and the QUAD group.

This action by the U.S is a sign of things to come. The walls against China will rise as the fortunes of the Wests industrial champions continue to be challenged under China 2025 and in some cases decline and fall. Think Boeing, Airbus, Intel, IBM, Qualcomm. All of these are going to be challenged by China and the heat will be on to secure the future of important Western companies, not only because they are home to a Western elite, but also, because they employ millions and millions of people.

4 ( +4 / -0 )

I wouldn't agree to ban all Chinese technologies, just the ones that promote communication accessible by government entities. That is inclusive of smartphones by these companies since someone's cell information can contain corporate information, including voice conversations that can be hack by those working for government entities.

0 ( +0 / -0 )

As stupid as this sounds, if you’re going to have a government spy on you, at least make it our own.

Well, that's a bad idea. The downvotes pouring in don't change the fact that all phones are beholden to one spy service or another.

You are much better off with a government other than your own spying on you, because what can a foreign government do to you? Nothing. Your own government, though, can arrest you and throw you in jail at will. Just ask the former East Germans how that works.

-3 ( +0 / -3 )

ZTE and Huawei are government-owned in reality but by name, they are private entities. Basically, Chinese government gives money to communist members and they are to start a company of their own and rise as a famous rich person. Using the individual commmunist member's influence as a wealthy and famous person, they try to lobby things in other countries and sometimes, they would even meet with foreign government leaders to discuss things beneficial to China. Well, China's tactics are starting to fail recently; it seems.

2 ( +2 / -0 )

Plain and simple. If it's made with Chinese Tech products then consider it a risk, just as if it were made with Russian or Iranian products.

Now that said, one can extrapolate, that the technology exists, for countries to spy upon each other should they choose to do so simply by telling their home-grown manufacturers to open the back-door.

I guess then, that there's nothing new here.

2 ( +2 / -0 )

BTW ... just how did Turkey have Sound recordings from the inside of the Saudi Embassy ?

2 ( +2 / -0 )

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