A Huawei store stands next to a Globe Telecom booth in Makati City, the Philippines on April 14, 2019. Photo: cnsphoto

Huawei is expected to receive approval to build a $494.24 million research and development (R&D) center in the UK, amid a security review that could lead the UK government to ban use of its 5G equipment.

According to a report from the Sunday Times newspaper, the facility, which is used for researching and developing chips for use in mobile broadband, is located in the village of Sawston, seven miles from Cambridge.

"Huawei has been working in the UK for a long time, it's also a goodwill gesture ahead of a key decision from the UK government that could decide its 'fate' in the country," Ma Jihua, a veteran industry analyst and a close follower of Huawei, told Global Times on Sunday.

The UK National Cyber Security Center (NCSC) is now conducting a security review that could cause the UK government to ban Huawei's 5G network in UK.

Widely considered as a response to the new security review, Huawei said in an open letter on its official website in early June that it is committed to providing local telecom operators with the "best equipment."

"For nearly 20 years we've supplied the UK's mobile and broadband companies with 3G and 4G. But some now question our role in helping Britain lead the way in 5G," the letter stated.

The $494.24 million research center will align with Huawei's efforts to convince local regulators and operators that Huawei could bring benefits to Britain, an industry insider surnamed Jiang told the Global Times on Sunday.

The insider said for Huawei, the center is not that important unless it could supply Huawei chips needed under the US ban - as China has the most powerful broadband technology.

The move also comes amid US' intensified crackdown on the Chinese tech giant. On May 15, the Trump administration moved to block all global chip supplies to Huawei, expanding US authority to require licenses for sales to Huawei of semiconductors made abroad with US technology.

In the face of mounting US pressure and as the UK ponders Huawei's role in 5G network development, the nation must decide whether US "recognition and praise" is worth the added expense to operators and consumers who could suffer from strained China-UK relations, analysts said.

"The UK and other EU countries' 5G rollouts have been and will be seriously delayed by the US disturbances, as UK telecom operators are unable to make long-term plans for the US' crackdown on Huawei, and can only watch the rapid 5G construction elsewhere," Ma said.

Moreover, the UK, which has left the EU bloc, has an urgent need to cooperate with China on many fronts including investment and trade, Zhao Junjie, a research fellow at the Chinese Academy of Social Sciences' Institute of European Studies told Global Times.

China's ambassador to the UK had recently told business leaders that Beijing viewed the matter as "a litmus test of whether Britain is a true and faithful partner", according to a report from the Sunday Times.

Global Times