EU efforts to ban Huawei from 5G networks won the backing of a top court advisor Thursday, in a legal opinion that is likely to galvanize security hawks seeking to restrict Chinese tech in Europe. A lawyer for the EU’s top court in Luxembourg said rules blocking telecom operators from using risky suppliers can be set by the EU, not just national governments. They also said telecom operators don’t need to be compensated for the cost of replacing Huawei equipment. It’s a blow for Europe’s telecom giants, which have pushed back against banning China’s Huawei from 5G procurement and have told EU officials that large-scale bans are an “act of self-harm” that could even bring down networks. It is a win for China hawks, who have fought to impose tougher measures against Huawei — with strong backing from Washington. The EU has spent years trying to persuade national governments to voluntarily kick out Huawei and ZTE over concerns that their presence in European telecom networks could enable large-scale spying and surveillance by the Chinese government. It is now working on broader rules that seek to reduce the bloc’s reliance on foreign “high-risk” suppliers and limit foreign government control over its digital networks. The case was brought by Estonian telecom operator Elisa, which is seeking compensation for the costs of removing Huawei and is challenging whether the EU has the competence to ask for restrictions on Chinese vendors. Thursday’s opinion said national security authorities can follow EU guidance when imposing bans on Huawei. The Court of Justice is expected to issue its final ruling on the case later this year, and may take the opinion from Advocate General Tamara Ćapet into account. Laszlo Toth, head of Europe at global telecom lobby association GSMA, said in reaction that “blanket rip-and-replace mandates are an unreasonable approach to what is a highly nuanced situation.” The industry considers national security measures should remain the responsibility of national governments, he said. Huawei said the opinion “recognizes that all restrictive measures with regards to telecom equipment must be subject to judicial review, under a strict standard of proportionality” and that “decisions cannot rest on general suspicion … but must be based on a specific assessment.” “We expect EU or national restrictions to be scrutinized under this principle,” Huawei said. BOON FOR BRUSSELS Progress towards an EU-wide ban has been sluggish, with many national governments dragging their feet, in part due to fears of Chinese trade retaliation. European Commission Executive Vice President Henna Virkkunen told POLITICO in January that she is “not satisfied” with voluntary efforts by EU capitals to kick out Huawei. The EU executive now wants binding rules, laid out in a proposal in January. Large telecom players in Europe have pushed back hard against restrictions on Huawei, arguing that blocking risky vendors is a national security measure — an area handled exclusively by national governments. Efforts to clamp down on risky vendors should respect “the competence of member states for national security matters,” industry group Connect Europe said in January. Thursday’s opinion suggests operators will have a harder time fighting the bans.  It also bodes badly for operators hoping to get compensated for ripping out Huawei equipment. Many have sought financial support and compensation for the measures, which they say add massive unexpected costs to network rollouts. The EU executive previously estimated that phasing out “specific high-risk equipment” would cost between €3.4 billion and €4.3 billion per year for three years. Only if the burden for replacing Huawei is “disproportionately heavy,” could telcos seek compensation, according to the opinion. Elisa said it welcomed the legal recommendation that all decisions made on the grounds of national security should still be subject to judicial review. It said the restrictions in Estonia “amounted to a deprivation of its ownership rights … as the impacted equipment has become unusable” and that Elisa “already swapped the majority of its network equipment to Nokia.” Chinese vendor ZTE, the smaller rival of Huawei, did not respond to a request for comment. Mathieu Pollet contributed reporting.

Chinese technology giant Huawei is participating in 16 projects funded by the European Commission’s Horizon Europe research and innovation program despite being dubbed a high-risk supplier. The Commission restricted Huawei from accessing Horizon projects in 2023 after saying that it (and another Chinese telecom supplier, ZTE) posed “materially higher risks than other 5G suppliers” in relation to cybersecurity and foreign influence. However, public data reviewed by POLITICO’s EU Influence newsletter shows that Huawei still takes part in several projects, many of which are in sensitive fields like cloud computing, 5G and 6G telecom technology and data centers. These projects mean Huawei has been working alongside universities and tech companies in Spain, France, Sweden, Denmark, the Netherlands, Germany, Belgium, Finland and Italy. It also has access to the intellectual property generated by the projects, as the contracts require the sharing of information as well as joint ownership of the results between partners. A Commission spokesperson confirmed that of the 16 projects, 15 were signed before the restrictions took place. The remaining project “was signed in 2025 and was assessed as falling outside the scope of the existing restrictions.” Many of the projects started in January 2023, with the contracts running out at the end of this year, while others will last until 2027, 2028 and 2030. “Huawei participates in and implements projects funded under Horizon Europe in a lawful and compliant manner,” a company spokesperson said. One of the projects is to develop data privacy and protection tools in the fields of AI and big data, along with Italy’s National Research Council, the University of Malaga, the University of Toulouse, the University of Calabria, and a Bavarian high-tech research institute for software-intensive systems. Huawei received €207,000 to lead the work on “design, implementation, and evaluation of use cases,” according to the contract for that project, seen by POLITICO. COMMISSION CRACKDOWN Last month the Commission proposed a new Cybersecurity Act that would restrict Huawei from critical telecoms networks under EU law, after years of asking national capitals to do so voluntarily. “I’m not satisfied [with] how the member states … have been implementing our 5G Toolbox,” the Commission’s executive VP for tech and security policy, Henna Virkkunen, told POLITICO at the time, referring to EU guidelines to deal with high-risk vendors. “We know that we still have high-risk vendors in our 5G networks, in the critical parts … so now we will have stricter rules on this.” The Commission is also working on measures to cut Chinese companies out of lucrative public contracts. Bart Groothuis, a liberal MEP working on the Cybersecurity Act, told POLITICO that the Commission should “honor the promises and commitments” it made “and push them out.” “They should be barred from participating. Period.” Huawei was also involved in an influence scandal last year, with Belgian authorities investigating whether the tech giant exerted undue influence over EU lawmakers. The scandal led to Huawei’s being banned from lobbying on the premises of the European Commission and the European Parliament.

Europe enters a more contested decade than any since the end of the Cold War. Yet the frontline shaping its security is no longer limited to land, sea, air or even space.   It runs directly through the digital backbone that powers modern life: the networks, data infrastructures and connectivity systems on which governments, economies and armed forces depend.  But Europe will not be secure until it takes this digital backbone’s security seriously, and governs its openness through risk-based, verifiable sovereignty rather than isolationism or complacency.  >  Europe will not be secure until it takes this digital backbone’s security > seriously, and governs its openness through risk-based, verifiable sovereignty A digital frontline that remains dangerously exposed  Hybrid threats no longer sit at the margins of European security. In reality, they cut straight through its core systems. Hospitals, energy grids, transport networks, financial markets and military command-and-control all rely on constant, resilient connectivity.   Via Vodafone. Joakim Reiter, group chief external and corporate affairs officer, Vodafone. And when those systems falter, nations falter. Recent blackouts in Portugal and Spain revealed what this means in practice. A ‘digital failure’ is not an IT incident. It is a national security event.   Adversaries have already drawn the lesson. Subsea cables carrying 95 percent of the world’s internet traffic face mounting sabotage risks. Satellites have become open theatres of geopolitical competition. And cyberattacks now routinely target both critical national infrastructure and the commercial networks that underpin defense readiness.   Despite this, much of Europe’s digital backbone is still approached as a utility, not a strategic asset. Market forces, on their own, cannot deliver the resilience, redundancy and diversity that modern deterrence requires. Piecemeal upgrades and fragmented responsibilities across civil, military and regulatory silos leave avoidable gaps that adversaries will inevitably exploit.  > A ‘digital failure’ is not an IT incident. It is a national security event.   Europe must therefore elevate secure connectivity to the level of defense preparedness — politically, financially and operationally. It requires moving beyond incrementalism to a coordinated framework that fosters and defends critical digital infrastructure — one that enables governments and operators to plan, train and respond together before, not during, the next crisis.  Sovereignty is about control, not isolation  Connectivity alone is not the issue. Europe’s strategic vulnerability also stems from how it governs the technologies on which its digital backbone depends.  And while digital sovereignty is one pillar of Europe’s wider resilience agenda — spanning critical value chains such as defense, automotive, chemicals and energy — it is the pillar without which none of the others can function.  Europe cannot attain digital sovereignty by continuing excessive dependence on a small number of non-European providers. But it also cannot achieve it by walling itself off from global innovation. Both extremes weaken resilience.  That’s why sovereignty done right means governing openness on Europe’s terms. Europe must keep critical operations in trusted European hands while maintaining access to the scale, performance and innovation that global platforms can provide.   This approach starts with understanding sovereignty across three dimensions:  — Data sovereignty: who has lawful access to information.  — Operational sovereignty: who runs and can intervene in critical systems.  — Technological sovereignty: which capabilities Europe must own or control.  The false choice between ‘ban foreign tech’ and ‘do nothing’ is a trap. The real path forward is risk-based, proportionate and verifiable. We must define what truly requires European control and work with like-minded international partners to build a trusted technology ecosystem. Sovereignty needs to be demonstrated in practice, not merely asserted in policy.  This approach would also enable Europe to pool industrial capacity with trusted partners such as Japan, Canada, Australia, the United Kingdom and South Korea. This is cooperation that strengthens Europe rather than diluting control.   From principles to verifiable control  Europe should reject blanket bans based on EU borders that raise costs, slow next-generation deployment and fail to deliver true control. Instead, sovereignty must be translated into concrete, auditable mechanisms that strengthen resilience.   To deliver it, Europe should follow four core principles:   1. Harden the backbone: Europe must create a much better business case for investing in resilient fiber, advanced 5G technologies and future networks built with defense-grade security. And it must fortify subsea cables, satellite systems and cross-border infrastructure against hybrid threats. This is defense spending by another name.  2. Engineer sovereignty into operations: ensure Europe retains verifiable control over access to sensitive systems and require European oversight of critical operations. Authorities must be able to verify who operates critical systems, where data is processed and which legal jurisdiction applies.  3. Certify ‘Trusted European Operators’: establish an EU-wide certification enabling European-anchored providers to manage access to global platforms within EU-governed environments. Make interoperability and portability mandatory to prevent lock-in and ensure resilience.  4. End ‘sovereignty washing’: providers claiming sovereign capabilities must prove it. Europe must require auditable disclosures and rigorous, risk-based assessments. If claims cannot be verified, they should not determine Europe’s critical infrastructure decisions.  In parallel, Europe should adopt a single EU framework defining practical levels across the data, operational and technological dimensions. This would give CIOs, regulators and public bodies clarity and consistency.   From doctrine to delivery  As the dust settles on the annual Munich Security Conference, Europe faces a defining choice. It can carry on treating its digital backbone as regulatory plumbing and watch vulnerabilities compound. Or it can recognise this backbone for what it is — a core line of defence.  > The real test of seriousness is whether governments and operators can plan > together, train together and respond together when systems are stressed.  The real test of seriousness is whether governments and operators can plan together, train together and respond together when systems are stressed. And this depends on whether investment, procurement and certification systems finally move at the speed security demands.  The way forward lies neither in dependence nor in fantasies of self-sufficiency. It must be grounded in risk-based sovereignty, delivered through verifiable control, modernized infrastructure and deeper public–private cooperation, aligned with trustworthy allies.  Ultimately, Europe cannot defend what it cannot connect, and it cannot compete if it closes itself off. Europe will fail this critical strategic test if the regulatory agenda for connectivity — the Digital Networks Act, Cybersecurity Act and merger guidelines revisions — does little to strengthen the very networks its security depends on.  If Europe gets this right, it can build a digital backbone capable of deterring adversaries, supporting allies, protecting citizens and powering innovation for decades to come.  -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Vodafone Group plc * The ultimate controlling entity is Vodafone Group plc * The political advertisement is linked to EU-level security and digital policy with particular focus on the Digital Networks Act, Cybersecurity Act, merger guidelines and broader digital sovereignty strategy. More information here.

BRUSSELS — European Parliament members on Monday slammed the Spanish government for using Huawei to store judicial wiretaps, with one leading lawmaker warning Madrid is putting its “crown jewels” at risk. The Spanish government has drawn criticism since the summer after it awarded a multimillion euro contract to Huawei for the storage of judicial wiretaps — a move that led the United States to threaten to cease intelligence sharing with Madrid. The outcry over Spain’s use of the Chinese tech giant for sensitive services lays bare how Europe continues to grapple with how to secure its digital systems against security threats. The European Union considers Huawei to be a high-risk supplier and wants to crack down on countries that still afford it broad market access. The EU proposed new draft cybersecurity legislation last month that, if approved, would force EU member countries to kick Huawei out of their telecoms networks, after years of trying to get capitals to ban the Chinese vendor voluntarily.  Lawmakers from several political groups said Spain’s contract with the Chinese tech giant could endanger the EU as a whole.  “We cannot operate in a union where one of the states actively strips high-risk vendors from its networks while another entrusts them with the crown jewels of its law enforcement,” said Markéta Gregorová, a Czech Pirate Party lawmaker who is part of the Greens group. Gregorová leads negotiations on a cyber bill that would give the EU the power to force Huawei and other — often Chinese — suppliers out of critical infrastructure in Europe. “When you introduce a high-risk vendor … we do not just risk a localized data breach, we risk poisoning the well of European intelligence sharing,” she said on Monday. Juan Ignacio Zoido Álvarez, a member of Spain’s center-right opposition party, said the decision puts “the entirety of the EU at risk.” The Spanish government has defended the contract it struck for storing wiretaps. Spain’s Interior Ministry said in a statement that the government had awarded a contract to “European companies,” which then bought storage products. “There is no risk to security, technological and legal sovereignty, nor is there any foreign interference or threat to the custody of evidence,” the ministry said. Interior Minister Fernando Grande-Marlaska told the Spanish parliament last September that Telefónica, the country’s telecom champion, operated a state surveillance system called SITEL and that storage “cabinets” had been integrated into that system.   Bloomberg reported last July that Huawei equipment is not used for classified information, with one government official saying the storage “represents a minor part of a watertight, audited, isolated and certified system.” On Monday, Juan Fernando López Aguilar, a prominent member of the European Parliament for the Socialists and Democrats group and a member of Prime Minister Pedro Sanchéz’s party in Spain, defended Madrid’s contract and pushed back on EU moves to intervene on the issue. In terms of “security, espionage, or violation of technological sovereignty,” there is “no risk,” Aguilar said. Huawei did not respond to a request for comment.

MUNICH, Germany — U.S. officials have countered Europe’s push for technology sovereignty from America with a clear message: It’s China you should worry about, not us. The European Union is rolling out a strategy to reduce its reliance on foreign technology suppliers. Donald Trump’s return to office has put the focus on American cloud giants, companies like Elon Musk’s Starlink and X and others — with European officials increasingly concerned that Washington has too much control over Europe’s digital infrastructure. As political leaders and security and intelligence officials met in Germany for the Munich Security Conference, Washington sought to calm nerves. The idea that Trump can pull the plug on the internet is not “a credible argument,” the United States’ National Cyber Director Sean Cairncross told an audience Thursday. Europe and the U.S. “face the same sort of threat and the same threat actors,” said Cairncross, who advises Trump on cybersecurity policy. Rather than weaning off America, wean off China, he said: “There is a clean tech stack. It is primarily American. And then there is a Chinese tech stack.” Claiming that U.S. tech is as risky as Chinese tech is “a giant false equivalency,” according to Cairncross. “Personal data doesn’t get piped to the state in the United States,” he said, referencing concerns that the Beijing government has laws requiring firms to hand over data for Chinese surveillance and espionage purposes. The attempt to quell concerns is notable even if it may not change the direction of travel in Europe. The European Commission wants to boost homegrown technology with a “tech sovereignty” package this spring. It presented a cybersecurity proposal in January that, if approved, could be used to root out suppliers that pose security risks — including from America. “We want to ensure that we don’t have risky dependencies when it comes to critical sectors,” the Commission’s Executive Vice President Henna Virkkunen told POLITICO in an interview in Munich on Friday. “We see this in AI, quantum technologies and semiconductors — we must have a certain level of capacity ourselves.” Europe’s attempt to pivot away from U.S. dependencies, while not new, has gained support in past months as the transatlantic alliance creaked. The POLITICO Poll conducted in February showed far more people described the U.S. as an unreliable ally than a reliable one across four countries, including half the adults polled in Germany and 57 percent in Canada. “The leadership claim of the U.S. is being challenged, perhaps already lost,” German Chancellor Friedrich Merz told the conference Friday. REBALANCING ACT Europe is still working out what a forceful attempt to build technology sovereignty would look like, as it reforms everything from industrial policy programs to procurement rules and data and cybersecurity requirements on companies and governments. Top European cyber officials in Munich told POLITICO that technological sovereignty does not mean cutting ties with trusted partners. Vincent Strubel, director of France’s cybersecurity agency ANSSI, said sovereignty means avoiding being bound by rules set elsewhere. “It’s about identifying what leverage non-European countries may have based on the technology they provide,” Strubel said in an interview. “It’s not about being friendly or unfriendly with any country — it’s about recognizing that we [currently] have no say in how that leverage might be used.” Claudia Plattner, head of Germany’s cybersecurity agency BSI, said, “We need to become more independent. We need to strengthen our local and European industries … We need to become digitally successful — that is essential to economic strength and to security.” The BSI plans to test sovereign cloud offerings from several large tech companies, including AWS and Google. The testing will examine whether European services can operate independently from parent systems and will help inform Germany’s national cloud strategy. Critics of Europe’s efforts to turn away from the U.S. say it is bound to lead to worse security. Christopher Ahlberg, the CEO of threat intelligence firm Recorded Future, said he understood that things like military command and control must remain national, “but if you start choosing sub-par cyber products just to achieve sovereignty, you’re going to be target No. 1 because threat actors will discover the vulnerabilities.” COMMON GROUND ON CHINA While tensions persist over the U.S.’s dominant position, Washington and European capitals have common ground when it comes to caution over Chinese tech. The EU is drafting legal requirements to cut out Chinese tech from critical supply chains including telecom networks, energy grids, security systems and railways. That move drew the ire of the Chinese government, which called it “blatant protectionism.” Many of the measures mirror what U.S. authorities have done in the past decade. “The U.S. understands what national security is. They don’t want to hear: ‘The U.S. is a threat.’ But they understand resilience,” said Sébastien Garnault, a prominent French cyber policy consultant. Trump “is putting America first, and the same goes in cyberspace,” Cairncross said. But, he added, “we don’t want it to be America alone. We want that partnership.” Laurens Cerulus contributed reporting.

LONDON — Canadian Prime Minister Mark Carney left Beijing and promptly declared the U.S.-led “world order” broken. Don’t expect his British counterpart to do the same. Keir Starmer will land in the Chinese capital Wednesday for the first visit by a U.K. prime minister since 2018. By meeting President Xi Jinping, he will end what he has called an “ice age” under the previous Conservative administration, and try to win deals that he can sell to voters as a boost to Britain’s sputtering economy. Starmer is one of a queue of leaders flocking to the world’s second-largest economy, including France’s Emmanuel Macron in December and Germany’s Friedrich Merz next month. Like Carney did in Davos last week, the British PM has warned the world is the most unstable it has been for a generation. Yet unlike Carney, Starmer is desperate not to paint this as a rupture from the U.S. — and to avoid the criticism Trump unleashed on Carney in recent days over his dealings with China. The U.K. PM is trying to ride three horses at once, staying friendly — or at least engaging — with Washington D.C., Brussels and Beijing.  It is his “three-body problem,” joked a senior Westminster figure who has long worked on British-China relations. POLITICO spoke to 22 current and former officials, MPs, diplomats, industry figures and China experts, most of whom were granted anonymity to speak frankly. They painted a picture of a leader walking the same tightrope he always has surrounded by grim choices — from tricky post-Brexit negotiations with the EU, to Donald Trump taking potshots at British policies and freezing talks on a U.K.-U.S. tech deal. Starmer wants his (long-planned) visit to China to secure growth, but be cautious enough not to compromise national security or enrage Trump. He appears neither to have ramped up engagement with Beijing in response to Trump, nor reduced it amid criticism of China’s espionage and human rights record. In short, he doesn’t want any drama. “Starmer is more managerial. He wants to keep the U.K.’s relationships with big powers steady,” said one person familiar with planning for the trip. “You can’t really imagine him doing a Carney or a Macron and using the trip to set out a big geopolitical vision.” An official in 10 Downing Street added: “He’s clear that it is in the U.K.’s interests to have a relationship with the world’s second biggest economy. While the U.S. is our closest ally, he rejects the suggestion that means you can’t have pragmatic dealings with China.” He will be hoping Trump — whose own China visit is planned for April — sees it that way too. BRING OUT THE CAVALRY Starmer has one word in his mind for this trip — growth, which was just 0.1 percent in the three months to September. The prime minister will be flanked by executives from City giants HSBC, Standard Chartered, Schroders and the London Stock Exchange Group; pharmaceutical company AstraZeneca; car manufacturer Jaguar Land Rover; energy provider Octopus; and Brompton, the folding bicycle manufacturer. The priority in Downing Street will be bringing back “a sellable headline,” said the person familiar with trip planning quoted above. The economy is the overwhelming focus. While officials discussed trying to secure a political win, such as China lifting sanctions it imposed on British parliamentarians in 2021, one U.K. official said they now believe this to be unlikely. Between them, five people familiar with the trip’s planning predicted a large number of deals, dialogues and memorandums of understanding — but largely in areas with the fewest national security concerns. These are likely to include joint work on medical, health and life sciences, cooperation on climate science, and work to highlight Mandarin language schemes, the people said.  Officials are also working on the mutual recognition of professional qualifications and visa-free travel for short stays, while firms have been pushing for more expansive banking and insurance licences for British companies operating in China. The U.K. is meanwhile likely to try to persuade Beijing to lower import tariffs on Scotch whisky, which doubled in February 2025. A former U.K. official who was involved in Britain’s last prime ministerial visit to China, by Theresa May in 2018, predicted all deals will already be “either 100 or 99 percent agreed, in the system, and No. 10 will already have a firm number in its head that it can announce.” THREADING THE NEEDLE Yet all five people agreed there is unlikely to be a deal on heavy energy infrastructure, including wind turbine technology, that could leave Britain vulnerable to China. The U.K. has still not decided whether to let Ming Yang, a Chinese firm, invest £1.5 billion in a wind farm off the coast of Scotland. And while Carney agreed to ease tariffs on Chinese electric vehicles (EVs), three of the five people familiar with the trip’s planning said that any deep co-operation on EV technology is likely to be off the table. One of them predicted: “This won’t be another Canada moment. I don’t see us opening the floodgates on EVs.” Britain is trying to stick to “amber and green areas” for any deals, said the first person familiar with the planning. The second of the five people said: “I think they‘re going for the soft, slightly lovey stuff.” Britain has good reason to be reluctant, as Chinese-affiliated groups have long been accused of hacking and espionage, including against MPs and Britain’s Electoral Commission. Westminster was gripped by headlines in December about a collapsed case against two men who had been accused of spying for China. Chinese firm Huawei was banned from helping build the U.K.’s 5G phone network in 2020 after pressure from Trump. Even now, Britain’s security agencies are working on mitigations to telecommunications cables near the Tower of London. They pass close to the boundary of China’s proposed embassy, which won planning approval last week. Andrew Small, director of the Asia Programme at the European Council on Foreign Relations, a think tank working on foreign and security policy, said: “The current debate about how to ‘safely’ increase China’s role in U.K. green energy supplies — especially through wind power — has serious echoes of 5G all over again, and is a bigger concern on the U.S. side than the embassy decision.”  Starmer and his team also “don’t want to antagonize the Americans” ahead of Trump’s own visit in April, said the third of the five people familiar with trip planning. “They’re on eggshells … if they announce a new dialogue on United Nations policy or whatever bullshit they can come up with, any of those could be interpreted as a broadside to the Trump administration.” All these factors mean Starmer’s path to a “win” is narrow. Tahlia Peterson, a fellow working on China at Chatham House, the international affairs think tank, said: “Starmer isn’t going to ‘reset’ the relationship in one visit or unlock large-scale Chinese investment into Britain’s core infrastructure.” Small said foreign firms are being squeezed out of the Chinese market and Xi is “weaponizing” the dependency on Chinese supply chains. He added: “Beijing will likely offer extremely minor concessions in areas such as financial services, [amounting to] no more than a rounding error in economic scale.” Chancellor Rachel Reeves knows the pain of this. Britain’s top finance minister was mocked when she returned with just £600 million of agreements from her visit to China a year ago. One former Tory minister said the figure was a “deliberate insult” by China. Even once the big win is in the bag, there is the danger of it falling apart on arrival. Carney announced Canada and China would expand visa-free travel, only for Beijing’s ambassador to Ottawa to say that the move was not yet official. Despite this, businesses have been keen on Starmer’s re-engagement.  Rain Newton-Smith, director-general of the Confederation of British Industry, said firms are concerned about the dependence on Chinese rare earths but added: “If you map supply chains from anywhere, the idea that you can decouple from China is impossible. It’s about how that trade can be facilitated in the best way.” EMBASSY ROW Even if Starmer gets his wins, this visit will bring controversies that (critics say) show the asymmetry in Britain’s relationship with China. A tale of two embassies serves as a good metaphor.  Britain finally approved plans last week for China’s new outpost in London, despite a long row over national security. China held off formally confirming Starmer’s visit until the London embassy decision was finalized, the first person familiar with planning for the trip said. (Others point out Starmer would not want to go until the issue was resolved.) The result was a scramble in which executives were only formally invited a week before take-off. And Britain has not yet received approval to renovate its own embassy in Beijing. Officials privately refer to the building as “falling down,” while one person who has visited said construction materials were piled up against walls. It is “crumbling,” added another U.K. official: “The walls have got cracks on them, the wallpaper’s peeling off, it’s got damp patches.” British officials refused to give any impression of a “quid pro quo” for the two projects under the U.K.’s semi-judicial planning system. But that means much of Whitehall still does not know if Britain’s embassy revamp in Beijing will be approved, or held back until China’s project in London undergoes a further review in the courts. U.K. officials are privately pressing their Chinese counterparts to give the green light. One of the people keenest on a breakthrough will be Britain’s new ambassador to Beijing Peter Wilson, a career diplomat described by people who have met him as “outstanding,” “super smart” and “very friendly.”  For Wilson, hosting Starmer will be one of his trickiest jobs yet. The everyday precautions when doing business in China have made preparations for this trip more intense. Government officials and corporate executives are bringing secure devices and will have been briefed on the risk of eavesdropping and honeytraps. One member of Theresa May’s 2018 delegation to China recalled opening the door of what they thought was their vehicle, only to see several people with headsets on, listening carefully and typing. They compared it to a scene in a spy film. Activists and MPs will put Starmer under pressure to raise human rights issues — including what campaigners say is a genocide against the Uyghur people in Xinjiang province — on a trip governed by strict protocol where one stray word can derail a deal.  Pro-democracy publisher Jimmy Lai, who has British nationality, is facing sentencing in Hong Kong imminently for national security offenses. During the PM’s last meeting with Xi in 2024, Chinese officials bundled British journalists out of the room when he raised the case. Campaigners had thought Lai’s sentencing could take place this week. All these factors mean tension in the British state — which has faced a tussle between “securocrats” and departments pushing for growth — has been high ahead of the trip. Government comments on China are workshopped carefully before publication. Earlier this month, Foreign Secretary Yvette Cooper told POLITICO her work on Beijing involves looking at “transnational repression” and “espionage threats.” But when Chancellor Rachel Reeves met China’s Finance Minister He Lifeng in Davos last week to tee up Starmer’s visit, the U.K. Treasury did not publicize the meeting — beyond a little-noticed photo on its Flickr account. SLOW BOAT TO CHINA Whatever the controversies, Labour’s China stance has been steadily taking shape since before Starmer took office in 2024. Labour drew inspiration from its sister party in Australia and the U.S. Democrats, both of which had regular meetings with Beijing. Party aides argued that after a brief “golden era” under Conservative PM David Cameron, Britain engaged less with China than with the Soviet Union during the Cold War. The result of Labour’s thinking was the policy of “three Cs” — “challenge, compete, and cooperate.” A procession of visits to Beijing followed, most notably Reeves last year, culminating in Starmer’s trip. His National Security Adviser Jonathan Powell was involved in planning across much of 2025, even travelling to meet China’s top diplomat, Wang Yi, in November. Starmer teed up this week’s visit with a December speech arguing the “binary” view of China had persisted for too long. He promised to engage with Beijing carefully while taking a “more transactional approach to pretty well everything.”  The result was that this visit has long been locked in; just as Labour aides argue the London embassy decision was set in train in 2018, when the Tory government gave diplomatic consent for the site. Labour ministers “just want to normalize” the fact of dealing with China, said the senior Westminster figure quoted above. Newton-Smith added: “I think the view is that the government’s engagement with eyes wide open is the right strategy. And under the previous government, we did lose out.” But for each person who praises the re-engagement, there are others who say it has left Britain vulnerable while begging for scraps at China’s table. Hawks argue the hard details behind the “three Cs” were long nebulous, while Labour’s long-awaited “audit” of U.K.-China relations was delayed before being folded briefly into a wider security document. “Every single bad decision now can be traced back to the first six months,” argued the third person familiar with planning quoted above. “They were absolutely ill-prepared and made a series of decisions that have boxed them into a corner.” They added: “The government lacks the killer instinct to deal with China. It’s not in their DNA.” Luke de Pulford, a human rights campaigner and director of the Inter-Parliamentary Alliance on China, argued the Tories had engaged with China — Foreign Secretary James Cleverly visited in 2023 — and Labour was simply going much further. “China is pursuing an enterprise to reshape the global order in its own image, and to that end, to change our institutions and way of life to the extent that they’re an obstacle to it,” he said. “That’s what they’re up to — and we keep falling for it.” END OF THE OLD ORDER? His language may be less dramatic, but Starmer’s visit to China does have some parallels with Canada. Carney’s trip was the first by a Canadian PM since 2017, and he and Xi agreed a “new strategic partnership.” Later at Davos, the Canadian PM talked of “the end of a pleasant fiction” and warned multilateral institutions such as the United Nations are under threat. One British industry figure who attended Davos said of Carney’s speech: “It was great. Everyone was talking about it. Someone said to me that was the best and most poignant speech they’d ever seen at the World Economic Forum. That may be a little overblown, but I guess most of the speeches at the WEF are quite dull.” The language used by Starmer, a former human rights lawyer devoted to multilateralism, has not been totally dissimilar. Britain could no longer “look only to international institutions to uphold our values and interests,” he said in December. “We must do it ourselves through deals and alliances.” But while some in the U.K. government privately agree with Carney’s point, the real difference is the two men’s approach to Trump. Starmer will temper his messaging carefully to avoid upsetting either his Chinese hosts or the U.S., even as Trump throws semi-regular rocks at Britain. To Peterson, this is unavoidable. “China, the U.S. and the EU are likely to continue to dominate global economic growth for the foreseeable future,” she said. “Starmer’s choice is not whether to engage, but how.” Esther Webber contributed reporting.

It seems impossible to have a conversation today without artificial intelligence (AI) playing some role, demonstrating the massive power of the technology. It has the potential to impact every part of business, and European policymakers are on board. In February 2025, Ursula von der Leyen, the European Commission president, said, “We want Europe to be one of the leading AI continents … AI can help us boost our competitiveness, protect our security, shore up public health, and make access to knowledge and information more democratic.” Research from Nokia suggests that businesses share this enthusiasm and ambition: 84 percent of more than 1,000 respondents said AI features in the growth strategy of their organization, while 62 percent are directing at least 20 percent of ICT capex budgets toward the technology. However, the equation is not yet balanced. Three-quarters of survey respondents state that current telecom infrastructure limits the ability to deliver on those ambitions. Meanwhile, 45 percent suggest these limitations would delay, constrain or entirely limit investments. There is clearly a disconnect between the ambition and the ability to deliver. At present, Europe lags the United States and parts of Asia in areas such as network deployment, related investment levels and scale. > If AI does not reach its full potential, EU competitiveness will suffer, > economic growth will have a ceiling, the creation of new jobs will have a > limit and consumers will not see the benefits. What we must remember primarily is that AI does not happen without advanced, trusted and future-proofed networks. Infrastructure is not a ‘nice to have’ it is a fundamental part. Simply put, today’s networks in Europe require more investments to power the AI dream we all have. If AI does not reach its full potential, EU competitiveness will suffer, economic growth will have a ceiling, the creation of new jobs will have a limit and consumers will not see the benefits. When we asked businesses about the challenge of meeting AI demands during our research, the lack of adequate connectivity infrastructure was the fourth common answer out of 15 potential options. Our telecom connectivity regulatory approach must be more closely aligned with the goal of fostering AI. That means progressing toward a genuine telecom single market, adopting a novel approach to competition policy to allow market consolidation to lead to more investments, and ensuring connectivity is always secure and trusted. Supporting more investments in next-generation networks through consolidation AI places heavy demands on networks. It requires low latency, high bandwidth and reliability, and efficient traffic management. To deliver this, Europe needs to accelerate investment in 5G standalone, fiber to enterprises, edge data centers and IP-optical backbone networks optimized for AI. > As industry voices such as Nokia have emphasized, the networks that power AI > must themselves make greater use of automation and AI. Consolidation (i.e. reducing the number of telecom operators within the national telecom markets of EU member states) is part of the solution. Consolidation will allow operators to achieve economies of scale and improve operating efficiency, therefore encouraging investment and catalyzing innovation. As industry voices such as Nokia have emphasized, the networks that power AI must themselves make greater use of automation and AI. Policy support should therefore extend to both network innovation and deployment. Trust: A precondition for AI adoption Intellectual property (IP) theft is a threat to Europe’s industrial future and only trusted technology should be used in core functions, systems and sectors (such as energy, transport and defense). In this context, the underlying connectivity should always be secure and trusted. The 5G Security Toolbox, restricting untrusted technology, should therefore be extended to all telecom technologies (including fiber, optics and IP) and made compulsory in all EU member states. European governments must make protecting their industries and citizens a high priority. Completing the digital single market Although the single market is one of Europe’s defining projects, the reality in telecoms — a key part of the digital single market — is still fragmented. As an example, different spectrum policies create barriers across borders and can limit network roll outs. Levers on top of advanced connectivity To enable the AI ecosystem in Europe, there are several different enabling levers European policymakers should advance on top of fostering advanced and trusted connectivity: * The availability of compute infrastructure. The AI Continent Action Plan, as well as the IPCEI Compute Infrastructure Continuum, and the European High-Performance Computing Joint Undertaking should facilitate building AI data centers in Europe.   * Leadership in edge computing. There should also be clear support for securing Europe’s access to and leadership in edge solutions and building out edge capacity. Edge solutions increase processing speeds and are important for enabling AI adoption, while also creating a catalyst for economic growth. With the right data center capacity and edge compute capabilities available, European businesses can meet the new requirements of AI use cases.  * Harmonization of rules. There are currently implications for AI in several policy areas, including the AI Act, GDPR, Data Act, cybersecurity laws and sector-specific regulations. This creates confusion, whereas AI requires clarity. Simplification and harmonization of these regulations should be pursued.  * AI Act implementation and simplification. There are concerns about the implementation of the AI Act. The standards for high-risk AI may not be available before the obligations of the AI act enter into force, hampering business ambitions due to legal uncertainty. The application date of the AI Act’s provisions on high-risk AI should be postponed by two years to align with the development of standards. There needs to be greater clarity on definitions and simplification measures should be pursued across the entire ecosystem. Policies must be simple enough to follow, otherwise adoption may falter. Policy needs to act as an enabler, not a barrier to innovation.  * Upskilling and new skills. AI will require new skills of employees and users, as well as creating entirely new career paths. Europe needs to prepare for this new world.  If Europe can deliver on these priorities, the benefits will be tangible: improved services, stronger industries, increased competitiveness and higher economic growth. AI will deliver to those who best prepare themselves. We must act now with the urgency and consistency that the moment demands. -------------------------------------------------------------------------------- Author biography: Marc Vancoppenolle is leading the geopolitical and government relations EU and Europe function at Nokia. He and his team are working with institutions and stakeholders in Europe to create a favorable political and regulatory environment fostering broadband investments and cross sectoral digitalization at large. Vancoppenolle has over 30 years of experience in the telecommunication industry. He joined Alcatel in 1991, and then Alcatel-Lucent, where he took various international and worldwide technical, commercial, marketing, communication and government affairs leadership roles. Vancoppenolle is a Belgian and French national. He holds a Master of Science, with a specialization in telecommunication, from the University of Leuven complemented with marketing studies from the University of Antwerp. He is a member of the DIGITALEUROPE Executive Board, Associate to Nokia’s CEO at the ERT (European Round Table for Industry), and advisor to FITCE Belgium (Forum for ICT & Media professionals). He has been vice-chair of the BUSINESSEUROPE Digital Economy Taskforce as well as a member of the board of IICB (Innovation & Incubation Center Brussels).

LONDON — British ministers have been laying the ground for Keir Starmer’s handshake with Xi Jinping in Beijing this week ever since Labour came to power. In a series of behind-closed-door speeches in China and London, obtained by POLITICO, ministers have sought to persuade Chinese and British officials, academics and businesses that rebuilding the trade and investment relationship is essential — even as economic security threats loom. After a “Golden Era” in relations trumpeted by Tory Prime Minister David Cameron, Britain’s once-close ties to the Asian superpower began to unravel in the late 2010s. By 2019, Boris Johnson had frozen trade and investment talks after a Beijing-led crackdown on Hong Kong’s democracy movement. At Donald Trump’s insistence, Britain stripped Chinese telecoms giant Huawei from its telecoms infrastructure over security concerns. Starmer — who is expected to meet Xi on a high-stakes trip to Beijing this week — set out to revive an economic relationship that had hit the rocks. The extent of the reset undertaken by the PM’s cabinet is revealed in the series of speeches by ministers instrumental to his China policy over the past year, including Chancellor Rachel Reeves, then-Foreign Secretary David Lammy, Energy Secretary Ed Miliband, and former Indo-Pacific, investment, city and trade ministers. Months before security officials completed an audit of Britain’s exposure to Chinese interference last June, ministers were pushing for closer collaboration between the two nations on energy and financial systems, and the eight sectors of Labour’s industrial strategy. “Six of those eight sectors have national security implications,” said a senior industry representative, granted anonymity to speak freely about their interactions with government. “When you speak to [the trade department] they frame China as an opportunity. When you speak to the Foreign, Commonwealth and Development Office, it’s a national security risk.”  While Starmer’s reset with China isn’t misguided, “I think we’ve got to be much more hard headed about where we permit Chinese investment into the economy in the future,” said Labour MP Liam Byrne, chair of the House of Commons Business and Trade Committee. Lawmakers on his committee are “just not convinced that the investment strategy that is unfolding between the U.K. and China is strong enough for the future and increased coercion risks,” he said. As Trump’s tariffs bite, Beijing’s trade surplus is booming and “we’ve got to be realistic that China is likely to double down on its Made in China approach and target its export surplus at the U.K.,” Byrne said. China is the U.K.’s fifth-largest trade partner, and data to June of last year show U.K. exports to China dropping 10.4 percent year-on-year while imports rose 4.3 percent. “That’s got the real potential to flood our markets with goods that are full of Chinese subsidies, but it’s also got the potential to imperil key sectors of our economy, in particular the energy system,” Byrne warned. A U.K. government spokesperson said: “Since the election, the Government has been consistently transparent about our approach to China – which we are clear will be grounded in strength, clarity and sober realism. “We will cooperate where we can and challenge where we must, never compromising on our national security. We reject the old ‘hot and cold’ diplomacy that failed to protect our interests or support our growth.” While Zheng Zeguang’s speech was released online, the Foreign Office refused to provide Catherine West’s own address when requested at the time. | Jordan Pettitt/PA Images via Getty Images CATHERINE WEST, INDO-PACIFIC MINISTER, SEPTEMBER 2024 Starmer’s ministers began resetting relations in earnest on the evening of Sept. 25, 2024 at the luxury Peninsula Hotel in London’s Belgravia, where rooms go for £800 a night. Some 400 guests, including a combination of businesses, British government and Chinese embassy officials, gathered to celebrate the 75th anniversary of the People’s Republic of China — a milestone for Chinese Communist Party (CCP) rule. “I am honored to be invited to join your celebration this evening,” then Indo-Pacific Minister Catherine West told the room, kicking off her keynote following a speech by China’s ambassador to the U.K., Zheng Zeguang.  “Over the last 75 years, China’s growth has been exponential; in fields like infrastructure, technology and innovation which have reverberated across the globe,” West said, according to a Foreign Office briefing containing the speech obtained through freedom of information law. “Both our countries have seen the benefits of deepening our trade and economic ties.”  While London and Beijing won’t always see eye-to-eye, “the U.K. will cooperate with China where we can. We recognise we will also compete in other areas — and challenge where we need to,” West told the room, including 10 journalists from Chinese media, including Xinhua, CGTN and China Daily. While Zheng’s speech was released online, the Foreign Office refused to provide West’s own address when requested at the time. Freedom of information officers later provided a redacted briefing “to protect information that would be likely to prejudice relations.” DAVID LAMMY, FOREIGN SECRETARY, OCTOBER 2024 As foreign secretary, David Lammy made his first official overseas visit in the job with a two-day trip to Beijing and Shanghai. He met Chinese Foreign Minister Wang Yi in Beijing on Oct. 18, a few weeks before U.S. President Donald Trump’s re-election. Britain and China’s top diplomats discussed climate change, trade and global foreign policy challenges. “I met with Director Wang Yi yesterday and raised market access issues with him directly,” Lammy told a roundtable of British businesses at Shanghai’s Regent On The Bund hotel the following morning, noting that he hoped greater dialogue between the two nations would break down trade barriers. “At the same time, I remain committed to protecting the U.K.’s national security,” Lammy said. “In most sectors of the economy, China brings opportunities through trade and investment, and this is where continued collaboration is of great importance to me,” he told firms. Freedom of information officers redacted portions of Lammy’s speech so it wouldn’t “prejudice relations” with China.  Later that evening, the then-foreign secretary gave a speech at the Jean Nouvel-designed Pudong Museum of Art to 200 business, education, arts and culture representatives. China is “the world’s biggest emitter” of CO2, Lammy told them in his prepared remarks obtained by freedom of information law. “But also the world’s biggest producer of renewable energy. This is a prime example of why I was keen to visit China this week. And why this government is committed to a long-term, strategic approach to relations.” Shanghai continues “to play a key role in trade and investment links with the rest of the world as well,” he said, pointing to the “single biggest” ever British investment in China: INEOS Group’s $800 million plastics plant in Zhejiang. “We welcome Chinese investment for clear mutual benefit the other way too,” Lammy said. “This is particularly the case in clean energy, where we are both already offshore wind powerhouses and the costs of rolling out more clean energy are falling rapidly.” “We welcome Chinese investment for clear mutual benefit the other way too,” David Lammy said. | Adam Vaughan/EPA POPPY GUSTAFSSON, INVESTMENT MINISTER, NOVEMBER 2024 Just days after Starmer and President Xi met for the first time at the G20 that November, Poppy Gustafsson, then the British investment minister, told a U.K.-China trade event at a luxury hotel on Mayfair’s Park Lane that “we want to open the door to more investment in our banking and insurance industries.” The event, co-hosted by the Bank of China UK and attended by Chinese Ambassador Zheng Zeguang and 400 guests, including the U.K. heads of several major China business and financial institutions, is considered the “main forum for U.K.-China business discussion,” according to a briefing package prepared for Gustafsson. “We want to see more green initiatives like Red Rock Renewables who are unlocking hundreds of megawatts in new capacity at wind farms off the coast of Scotland — boosting this Government’s mission to become a clean energy superpower by 2030,” Gustafsson told attendees, pointing to the project owned by China’s State Development and Investment Group. The number one objective for her speech, officials instructed the minister, was to “affirm the importance of engaging with China on trade and investment and cooperating on shared multilateral interests.” And she was told to “welcome Chinese investment which supports U.K. growth and the domestic industry through increased exports and wider investment across the economy and in the Industrial Strategy priority sectors.” The Chinese government published a readout of Gustafsson and Zheng’s remarks. RACHEL REEVES, CHANCELLOR, JANUARY 2025 By Jan. 11 last year, Chancellor Rachel Reeves was in Beijing with British financial and professional services giants like Abrdn, Standard Chartered, KPMG, the London Stock Exchange, Barclays and Bank of England boss Andrew Bailey in tow. She was there to meet with China’s Vice-Premier He Lifeng to reopen one of the key financial and investment talks with Beijing Boris Johnson froze in 2019. Before Reeves and He sat down for the China-U.K. Economic and Financial Dialogue, Britain’s chancellor delivered an address alongside the vice-premier to kick off a parallel summit for British and Chinese financial services firms, according to an agenda for the summit shared with POLITICO. Reeves was also due to attend a dinner the evening of the EFD and then joined a business delegation travelling to Shanghai where she held a series of roundtables. Releasing any of her remarks from these events through freedom of information law “would be likely to prejudice” relations with China, the Treasury said. “It is crucial that HM Treasury does not compromise the U.K.’s interests in China.” Reeves’ visit to China paved the way for the revival of a long-dormant series of high-level talks to line up trade and investment wins, including the China-U.K. Energy Dialogue in March and U.K.-China Joint Economic and Trade Commission (JETCO) last September. EMMA REYNOLDS, CITY MINISTER, MARCH 2025 “Growth is the U.K. government’s number one mission. It is the foundation of everything else we hope to achieve in the years ahead. We recognise that China will play a very important part in this,” Starmer’s then-City Minister Emma Reynolds told the closed-door U.K.-China Business Forum in central London early last March. Reeves’ restart of trade and investment talks “agreed a series of commitments that will deliver £600 million for British businesses,” Reynolds told the gathering, which included Chinese electric vehicle firm BYD, HSBC, Standard Chartered, KPMG and others. This would be achieved by “enhancing links between our financial markets,” she said. “As the world’s most connected international financial center and home to world-leading financial services firms, the City of London is the gateway of choice for Chinese financial institutions looking to expand their global reach,” Reynolds said. Ed Miliband traveled to Beijing in mid-March for the first China-U.K. Energy Dialogue since 2019. | Tolga Akmen/EPA ED MILIBAND, ENERGY AND CLIMATE CHANGE SECRETARY, MARCH 2025 With Starmer’s Chinese reset in full swing, Energy Secretary Ed Miliband traveled to Beijing in mid-March for the first China-U.K. Energy Dialogue since 2019. Britain’s energy chief wouldn’t gloss over reports of human rights violations in China’s solar supply chain — on which the U.K. is deeply reliant for delivering its lofty renewables goals — when he met with China’s Vice Premier Ding Xuexiang, a British government official said at the time. “We maybe agree to disagree on some things,” they said. But the U.K. faces “a clean energy imperative,” Miliband told students and professors during a lecture at Beijing’s elite Tsinghua University, which counts Xi Jinping and former Chinese President Hu Jintao as alumni. “The demands of energy security, affordability and sustainability now all point in the same direction: investing in clean energy at speed and at scale,” Miliband said, stressing the need for deeper U.K.-China collaboration as the U.K. government reaches towards “delivering a clean power system by 2030.”  “In the eight months since our government came to office we have been speeding ahead on offshore wind, onshore wind, solar, nuclear, hydrogen and [Carbon Capture, Usage, and Storage],” Britain’s energy chief said. “Renewables are now the cheapest form of power to build and operate — and of course, much of this reflects technological developments driven by what is happening here in China.”  “The U.K. and China share a recognition of the urgency of acting on the climate crisis in our own countries and accelerating this transition around the world — and we must work together to do so,” Miliband said, in his remarks obtained through freedom of information law. DOUGLAS ALEXANDER, ECONOMIC SECURITY MINISTER, APRIL 2025 During a trip to China in April last year, then-Trade Minister Douglas Alexander met his counterpart to prepare to relaunch key trade and investment talks. The trip wasn’t publicized by the U.K. side. According to a Chinese government readout, the China-UK Joint Economic and Trade Commission would promote “cooperation in trade and investment, and industrial and supply chains” between Britain’s trade secretary and his Chinese equivalent. After meeting Vice Minister and Deputy China International Trade Representative Ling Ji, Minister Alexander gave a speech at China’s largest consumer goods expo near the country’s southernmost point on the island province of Hainan. Alexander extended his “sincere thanks” to China’s Ministry of Commerce and the Hainan Provincial Government “for inviting the U.K. to be the country of honour at this year’s expo.” “We must speak often and candidly about areas of cooperation and, yes, of contention too, where there are issues on which we disagree,” the trade policy and economic security minister said, according to a redacted copy of his speech obtained under freedom of information law. “We are seeing joint ventures and collaboration between Chinese and U.K. firms on a whole host of different areas … in renewable energy, in consumer goods, and in banking and finance,” Alexander later told some of the 27 globally renowned British retailers, including Wedgwood, in another speech during the U.K. pavilion opening ceremony. “We are optimistic about the potential for deeper trade and investment cooperation — about the benefits this will bring to the businesses showcasing here, and those operating throughout China’s expansive market.”

China’s foreign ministry on Wednesday said a new European Commission proposal to restrict high-risk tech vendors from critical supply chains amounted to “blatant protectionism,” warning European officials that Beijing will take “necessary measures” to protect Chinese firms. Beijing has “serious concerns” over the bill, Chinese foreign ministry spokesperson Guo Jiakun told reporters, according to state news agencies’ reports. “Using non-technical standards to forcibly restrict or even prohibit companies from participating in the market, without any factual evidence, seriously violates market principles and fair competition rules,” Guo said. The European Commission on Tuesday unveiled its proposal to revamp the bloc’s Cybersecurity Act. The bill seeks to crack down on risky technology vendors in critical supply chains ranging across energy, transport, health care and other sectors. Though the legislation itself does not name any specific countries or companies, it is widely seen as being targeted at China. 5G suppliers Huawei and ZTE are in the EU’s immediate crosshairs, while other Chinese vendors are expected to be hit at a later stage. European Commission spokesperson Thomas Regnier responded to the Chinese foreign ministry, saying Europe has allowed high-risk vendors from outside the EU in strategic sectors for “far too long.” “We are indeed radically changing this. Because we cannot be naive anymore,” Regnier said in a statement. The exclusion of high-risk suppliers will always be based on “strong risk assessments” and in coordination with EU member countries, he said. China “urges the EU to avoid going further down the wrong path of protectionism,” the Chinese foreign ministry’s Guo told reporters. He added the EU bill would “not only fail to achieve so-called security but will also incur huge costs,” saying some restrictions on using Huawei had already “caused enormous economic losses” in Europe in past years. European telecom operators warned Tuesday that the law would impose multi-billion euro costs on the industry if restrictions on using Huawei and ZTE were to become mandatory across Europe. A Huawei spokesperson said in a statement that laws to block suppliers based on their country of origin violate the EU’s “basic legal principles of fairness, non-discrimination, and proportionality,” as well as its World Trade Organization obligations. The company “reserve[s] all rights to safeguard our legitimate interests,” the spokesperson said. ZTE did not respond to requests for comment on the EU’s plans.

Europe’s security does not depend solely on our physical borders and their defense. It rests on something far less visible, and far more sensitive: the digital networks that keep our societies, economies and democracies functioning every second of the day. > Without resilient networks, the daily workings of Europe would grind to a > halt, and so too would any attempt to build meaningful defense readiness. A recent study by Copenhagen Economics confirms that telecom operators have become the first line of defense in Europe’s security architecture. Their networks power essential services ranging from emergency communications and cross-border healthcare to energy systems, financial markets, transport and, increasingly, Europe’s defense capabilities. Without resilient networks, the daily workings of Europe would grind to a halt, and so too would any attempt to build meaningful defense readiness. This reality forces us to confront an uncomfortable truth: Europe cannot build credible defense capabilities on top of an economically strained, structurally fragmented telecom sector. Yet this is precisely the risk today. A threat landscape outpacing Europe’s defenses The challenges facing Europe are evolving faster than our political and regulatory systems can respond. In 2023 alone, ENISA recorded 188 major incidents, causing 1.7 billion lost user-hours, the equivalent of taking entire cities offline. While operators have strengthened their systems and outage times fell by more than half in 2024 compared with the previous year, despite a growing number of incidents, the direction of travel remains clear: cyberattacks are more sophisticated, supply chains more vulnerable and climate-related physical disruptions more frequent. Hybrid threats increasingly target civilian digital infrastructure as a way to weaken states. Telecom networks, once considered as technical utilities, have become a strategic asset essential to Europe’s stability. > Europe cannot deploy cross-border defense capabilities without resilient, > pan-European digital infrastructure. Nor can it guarantee NATO > interoperability with 27 national markets, divergent rules and dozens of > sub-scale operators unable to invest at continental scale. Our allies recognize this. NATO recently encouraged members to spend up to 1.5 percent of their GDP on protecting critical infrastructure. Secretary General Mark Rutte also urged investment in cyber defense, AI, and cloud technologies, highlighting the military benefits of cloud scalability and edge computing – all of which rely on high-quality, resilient networks. This is a clear political signal that telecom security is not merely an operational matter but a geopolitical priority. The link between telecoms and defense is deeper than many realize. As also explained in the recent Arel report, Much More than a Network, modern defense capabilities rely largely on civilian telecom networks. Strong fiber backbones, advanced 5G and future 6G systems, resilient cloud and edge computing, satellite connectivity, and data centers form the nervous system of military logistics, intelligence and surveillance. Europe cannot deploy cross-border defense capabilities without resilient, pan-European digital infrastructure. Nor can it guarantee NATO interoperability with 27 national markets, divergent rules and dozens of sub-scale operators unable to invest at continental scale. Fragmentation has become one of Europe’s greatest strategic vulnerabilities. The reform Europe needs: An investment boost for digital networks At the same time, Europe expects networks to become more resilient, more redundant, less dependent on foreign technology and more capable of supporting defense-grade applications. Security and resilience are not side tasks for telecom operators, they are baked into everything they do. From procurement and infrastructure design to daily operations, operators treat these efforts as core principles shaping how networks are built, run and protected. Therefore, as the Copenhagen Economics study shows, the level of protection Europe now requires will demand substantial additional capital. > It is unrealistic to expect world-class, defense-ready infrastructure to > emerge from a model that has become structurally unsustainable. This is the right ambition, but the economic model underpinning the sector does not match these expectations. Due to fragmentation and over-regulation, Europe’s telecom market invests less per capita than global peers, generates roughly half the return on capital of operators in the United States and faces rising costs linked to expanding security obligations. It is unrealistic to expect world-class, defense-ready infrastructure to emerge from a model that has become structurally unsustainable. A shift in policy priorities is therefore essential. Europe must place investment in security and resilience at the center of its political agenda. Policy must allow this reality to be reflected in merger assessments, reduce overlapping security rules and provide public support where the public interest exceeds commercial considerations. This is not state aid; it is strategic social responsibility. Completing the single market for telecommunications is central to this agenda. A fragmented market cannot produce the secure, interoperable, large-scale solutions required for modern defense. The Digital Networks Act must simplify and harmonize rules across the EU, supported by a streamlined governance that distinguishes between domestic matters and cross-border strategic issues. Spectrum policy must also move beyond national silos, allowing Europe to avoid conflicts with NATO over key bands and enabling coherent next-generation deployments. Telecom policy nowadays is also defense policy. When we measure investment gaps in digital network deployment, we still tend to measure simple access to 5G and fiber. However, we should start considering that — if security, resilience and defense-readiness are to be taken into account — the investment gap is much higher that the €200 billion already estimated by the European Commission. Europe’s strategic choice The momentum for stronger European defense is real — but momentum fades if it is not seized. If Europe fails to modernize and secure its telecom infrastructure now, it risks entering the next decade with a weakened industrial base, chronic underinvestment, dependence on non-EU technologies and networks unable to support advanced defense applications. In that scenario, Europe’s democratic resilience would erode in parallel with its economic competitiveness, leaving the continent more exposed to geopolitical pressure and technological dependency. > If Europe fails to modernize and secure its telecom infrastructure now, it > risks entering the next decade with a weakened industrial base, chronic > underinvestment, dependence on non-EU technologies and networks unable to > support advanced defense applications. Europe still has time to change course and put telecoms at the center of its agenda — not as a technical afterthought, but as a core pillar of its defense strategy. The time for incremental steps has passed. Europe must choose to build the network foundations of its security now or accept that its strategic ambitions will remain permanently out of reach. -------------------------------------------------------------------------------- Disclaimer POLITICAL ADVERTISEMENT * The sponsor is Connect Europe AISBL * The ultimate controlling entity is Connect Europe AISBL * The political advertisement is linked to advocacy on EU digital, telecom and industrial policy, including initiatives such as the Digital Networks Act, Digital Omnibus, and connectivity, cybersecurity, and defence frameworks aimed at strengthening Europe’s digital competitiveness. More information here.