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Hounded by US, Huawei finds a more receptive market in Germany

Jill Petzinger
Jill Petzinger, Germany Correspondent, Yahoo Finance UK
Huawei company headquarters in Shenzhen, Guangdong province, China. Photo: Aly Song/Reuters

While US President Donald Trump wages war on Huawei, the Chinese telecoms company appears to be thriving in Germany.

On Monday, Huawei released a study commissioned from the consulting arm of the German Institute for Economic Research (DIW Econ) highlighting its positive effects on the German economy. Entitled “the economic footprint of Huawei in Germany,” the study said the Shenzhen-based company invested over €450m in research and development in Germany between 2013 and 2017.

Huawei directly employs 2,600 workers in Germany — 400 of those at its biggest European R&D centre in Munich — and has indirectly created some 28,000 jobs. In 2018, the study found, Huawei had a gross value-added-effect of €2.3bn and an average revenue growth of 26% annually between 2008 and 2018 — to around €2.7bn last year.

Trump has blocked Huawei’s equipment from the US, and forbidden US tech companies from doing business with the Chinese telecoms company. Germany has refused to bow to Washington’s demands to ban the Chinese company from the 5G network auction over fears that the Chinese government could use Huawei’s tech to spy on other countries.

During his visit to Berlin on 31 May, US secretary of state Mike Pompeo made not-so-veiled threats that the US may withhold national security data from countries whose networks contained Huawei gear.

Last week in Shanghai, Germany’s economy minister Peter Altmaier said “it is up to Huawei to show it meets our security requirements.”

READ MORE: Huawei set to unveil huge UK tech hub just as security fears grow

Walter Haas, the CTO of Huawei in Germany, said that questions about security were nothing new for the company. Speaking in Berlin on Monday about the ongoing issues with the US, Haas said “I assume that the issue will sooner or later be resolved.”

“I can not imagine that the global economy and global value chains will continue to function under the current paradigm,” he added.

Network security, Haas said, is “not the problem.” The more important challenge is keeping connected devices safe from cyberhacks in a fully-connected world.

Jochen Homann, the president of Germany's Federal Network Agency, told the Financial Times earlier this year that Huawei is a major patent holder, and excluding it from the German market “would delay the roll-out of the digital networks."

The British government is considering banning Huawei equipment only from core parts of its 5G network. Yahoo Finance UK reported in May that Huawei is moving ahead with plans for a huge new research and development facility in the UK.