China Will Try to Avoid Any Serious Setbacks in Trade Ties with the EU – Scholar

According to the Chinese Foreign Ministry, fabrications against Huawei need to be stopped. The Ministry’s spokeswoman said that baseless accusations about security threats are being used to suppress and restrict the development of Chinese technology companies abroad.

Sputnik has discussed Europe's concern over Chinese companies with Dr Joseph Cheng, Professor of Political Science at the City University of Hong Kong.

Sputnik: The EU and separate European nations have been concerned about Huawei and other Chinese tech companies citing security concerns. How grounded is their unease with Chinese companies?

Joseph Cheng: I guess most governments in the world believe that almost all major powers do engage in internet espionage, and China is no exception. There is, however, one certain factor to be considered. That is to say, China is spending a lot of resources to try to secure the lead in telecommunications technology, especially in the development of 5G technologies.

Huawei, as well as other operators like ZTE, they are given the responsibilities and the resources by the Chinese government to secure this lead, to secure an edge in the development of 5G technologies. Certainly, the Chinese authorities are under pressure from the United States and the rest of the international community to come to some rules on internet security as well as to be respectful of intellectual property rights.

Beijing probably will say that it is now exactly considering legislation, including a foreign investment law, which will guarantee that no administrative measures will be applied to foreign investors in China, to foreign corporations in China; that they will be forced to transfer technology to China.

So, we have to say that the Chinese authorities are also aware of these pressures, concerns and suspicions on the part of foreign governments, including those from the EU bloc, and they are trying to respond to these kinds of pressures. Certainly, one can expect no quick solution at this stage.

READ MORE: Europe Losing Most Amid Chinese-US Trade Conflict — German Foreign Minister

Sputnik: Do you think the arrest of a Huawei official in Poland has to do with the US-China trade war?

Joseph Cheng: I don't know the details about this case, but certainly in the eyes of Beijing this is part of the trade war. China certainly believes that various governments come under the pressure or persuasion of the Donald Trump administration trying to exert pressure on China to accept the terms of the United States in the trade negotiations that are going on.

And this is exactly why in many cases, like in Canada, potentially in the Czech [Republic] and other places, the Chinese government will engage in lobbying, persuasion, as well as potential retaliatory measures to try to persuade the governments concerned not to toe the American line so to speak, or at least to create some kind of deterrent effect on the part of Beijing.

Sputnik: If Huawei is forced out of the European market, what impact will it have on the continent?

Joseph Cheng: This is certainly a major worry on the part of China. China believes that it is now engaged in a kind of competition with the United States in an attempt to secure leadership in the economic arena, in the science and technological arena, in the coming two or three decades.

So major state-owned corporations like Huawei and so on are seen as important vehicles to try to secure this leadership. And in trying to secure this leadership, obviously, a global market share is important; and therefore China will engage, as we said, in all types of lobbying, persuasion, and even pressuring tactics to ensure that at least the European market is open to China.

And in this regard, I think that China is certainly willing to talk and to satisfy the European demands to some extent.

READ MORE: EU Cries Wolf Over Huawei, Chinese Tech Firms' Security Threat to the Bloc

Sputnik: If China is pushed away from Europe, what steps could Beijing undertake?

Joseph Cheng: There, of course, can be serious retaliatory measures like stopping investment in Europe, giving preference in terms of contracts to competitors of Europe and so on. But again, to China, Europe is a very important trade partner. The EU bloc is the largest trade partner for China, and Sino-America relations are not very good at the moment.

And there are no obvious alternatives to China to replace the EU market; the Russian market is too small, Sino-Japanese relations are not exactly very good either, and the Southeast Asian markets are a rather different thing. So the loss of the EU market or a setback in Sino-EU trade relations will be a severe blow to China's economy at this stage, and I do believe that the Chinese authorities will try hard to avoid any serious setbacks in the trade ties between the EU and China.

Views and opinions, expressed in the article are those of Joseph Cheng and do not necessarily reflect those of Sputnik