China: Export ban reportedly on table for Nokia, Ericsson if EU cuts Huawei from networks deals

According to Wall Street Journal, China is considering taking action towards restricting or banning exports of China-made goods by Nokia and Ericsson if the EU and ex-EU countries continue cutting Huawei off their networks infrastructure.

This report appeared after the United Kingdom decided to prohibit UK operators from purchasing Huawei gear starting next year and ordered the removal of Huawei’s fixed equipment from their infrastructure till 2023 and mobile equipment till 2027. China described that move as caving in to US pressure. Analysts estimate that this decision will prolong 5G rollout in the UK by 2 years and add extra 2.5 billion dollars of cost to operators.

WSJ now reports that China might ban Nokia and Ericsson from exporting their products made in China if pressure on Huawei continues in Europe. Both Nokia and Ericsson have been moving their manufacturing capacity out of China anticipating complications in relationships of word’s superpowers. An estimate by Citi analysts Amit Harchandani and Robert Lamb is that in 2018 Ericsson had 45% manufacturing-facility area in China, with Nokia having 10%. Considering the tensions since 2018, that numbers probably further decreased but China still remains a significant market and manufacturing hub for both companies.

I’m not really sure that such decision will happen, considering Nokia and Ericsson together have around 30,000 employees in that area, says lightreading.com. They also added that this seems more like a warning what might happen, than a solid plan that will happen. In any case, things are heating up.