A flagship store of Huawei Photo: VCG

 
Chinese technology giant Huawei - which has been put on the US Entity List - is entering a critical time for returning to Europe as major economies in the EU signal a policy turnaround involving new restrictions on telecom market access, analysts said.

The UK government announced plans to delay removing Huawei gears from its mobile networks by six months on Friday. The original deadline for cutting the share of Huawei equipment to 35 percent of its telecom network was set at January 2023. 

According to a statement from the UK government, the delay was "because the COVID-19 pandemic and associated social distancing measures have impacted providers' abilities to reconfigure their networks in order to meet the advisory deadline".

Ma Jihua, a veteran telecommunications industry analyst, told the Global Times on Sunday that the UK has actually made "little substantial moves" on removing Huawei gears in recent years, due to its business interests and the immense expense to dismantle Huawei equipment that the virus-hit economy cannot afford.

Ma said that the UK's six-month delay could also be a strategy for it to "wait and see" the results of the US midterm elections in November and how that will reshape US policies, and it leaves time for Britain to adjust its policies correspondingly.

In 2020, the UK government announced measures restricting Huawei's access to its market, including the 35-percent share cap and a pledge to remove all Huawei equipment from its 5G networks by 2027. 

The Telegraph reported over the weekend that the UK government is not revising the 2027 deadline.

"The global pandemic is entering the third year, and things are now quite different from 2020, when some Western developed economies formed small circles to crack down Huawei in order to echo US sanctions," Ma said, noting that there's little incentive for the EU bloc now to either continue or impose new restrictions on Huawei.

Now, many European governments are preoccupied with a bunch of issues ranging from economic rebooting to settling the Ukraine situation, industry observers said. 

In fact, major economies in Europe in recent months have shown a U-turn in their stances with regard to economic ties with China. More countries are pushing for pragmatic cooperation with China. 

UK Prime Minister Boris Johnson is reportedly considering restarting trade talks with China that have been on ice for years. The top leaders from China and France had a phone call on February 16, and now, China stands ready to work with France to advance the ratification of the China-EU investment agreement, the Xinhua News Agency reported.

The two countries also reached a consensus on each providing a fair, just and non-discriminatory business environment for companies from the other, which has significant implications for Huawei's future operations in France. 
"How the major economies in Europe act is symbolic and could sway smaller European economies' policies toward Chinese firms," Ma said. 

Global Times