The headquarters of Swedish communications equipment giant Ericsson in Stockholm, Sweden, on December 9, 2018 Photo: IC

China on Tuesday dismissed a Wall Street Journal report suggesting that China is considering retaliation against two European telecom companies - Nokia and Ericsson - as "fake news" that is aimed at undermining the "good" China-EU relationship, saying China's huge market will be open to European companies.

Retaliating against Sweden-based Ericsson and Finland-based Nokia are not only irrelevant in the rising tensions between China and the US-led so-called "Five Eyes" alliance over Huawei, but also runs counter to China's opening-up policies, Chinese officials and industry insiders noted. 

Quoting unnamed "people familiar with the matter," the Wall Street Journal reported that the Chinese Ministry of Commerce is planning to impose export controls to prevent exports of products made by Nokia and Ericsson in China to other countries, if the EU moves to ban Huawei's 5G.

"This piece of information is made up with ulterior motives, it is maliciously fabricated news aimed at undermining good and cooperative relations between China and EU," Wang Wenbin, a spokesperson for the Chinese Foreign Ministry, told a press briefing in Beijing, adding that China has always adopted a clear stance on 5G and that China is open to cooperation with companies from all countries on 5G, including Nokia and Ericsson.  

Wang pointed out that some media outlets also quoted the piece of fake news from the Wall Street Journal, which is aimed at nothing but "sowing discord in the good cooperative relationship between China and the EU."

The Wall Street Journal report was published Monday as China and the EU are making major progress in landmark trade agreements, including a sweeping bilateral investment treaty (BIT). 

On Monday Beijing time, the EU Council authorized the signature of a bilateral agreement to protect geographic indications (GIs) of 200 Chinese and EU agricultural products, in what Chinese analyst call a goodwill gesture amid plans to the conclude the broader BIT by the end of the year. The EU Council called the deal on the GIs as the "first significant bilateral trade agreement signed between the EU and China."

"[The Wall Street Journal] wants to destroy China-EU friendly relations," an industry insider who worked for Ericsson told the Global Times on Tuesday, noting that both Germany and France have pledged they will continue to use Huawei's advanced 5G technology.

Also on Tuesday, French Finance Minister Bruno Le Maire said that France would not restrict Huawei from investing in the country. Germany and the broader EU have not banned the Chinese company, like the UK, which voted to exit from EU.

Industry analysts in China also pointed out that despite the smaller market share of Nokia and Ericsson in China, the participation of the two major telecom players is needed in China and that the two have won some 5G contracts in China market.

"Even though the two firms lag behind Huawei in terms of technology, costs and services, we still need the participation of foreign players in the market, which is also in line with the opening-up policy of this country," a source close to the companies told the Global Times Tuesday. 

Ericsson said as recently as June 8 that it had won new 5G contracts with three of the top telecom operators in China - China Mobile, China Unicom and China Telecom.

Nokia has a "poor record" in winning bids in China because of the performance of its equipment and the relocation of research and development and supply chains have already begun, mostly because of the China-US trade war, according to Jiang Junmu, chief writer for telecom industry news website c114.com.cn. 

Jiang said that it was unlikely China would target Nokia and Ericsson in the first place and it was obvious that the WSJ report was aimed at stirring up trouble between China and the EU.

Ericsson said Tuesday that it was "inappropriate" to comment on the speculation. Nokia referred requests for comment to the comments of the Chinese Foreign Ministry spokesperson. The spokesperson Tuesday also urged European countries to offer a fair, open and non-discriminatory business climate for all businesses, including China's. 
Newspaper headline: FM rejects 'fake' 5G retaliation