A Chinese official media said that Beijing will give Sweden one last chance to lift the ban on Huawei Technologies Co. before taking countermeasures against Ericsson AB.
According to Chinese Communist Party newspaper Global Times, Ericsson's participation in China's upcoming massive 5G build-out will depend on whether Stockholm changes its stance on Huawei.
Swedish regulators banned wireless operators from using Huawei's 5G equipment in October last year, citing national security concerns. Huawei is challenging the decision in Swedish courts, and the ruling is expected in the coming weeks.
Neither a spokesman for Stockholm-based Ericsson nor a spokesman for Sweden's Ministry of Foreign Trade commented. Ericsson's shares dropped nearly 4 % on Tuesday, slightly underperforming its peers amid an overall weakening technology market.
These warnings via Chinese media are the latest example of Beijing using its influence in the domestic market to protect its commercial and diplomatic interests. China restricted imports of Australian commodities such as wine and beef last year after Australia issued a ban on Huawei and called for an investigation into China's handling of the COVID-19 outbreak.
After Swedish regulators issued a ban on Huawei last October, Chinese officials and state-controlled outlets asserted that it was an unfair decision, that Huawei posed no security risk, and that Sweden was trying to protect Sweden's leading homegrown enterprise Ericsson.
They threatened to target Swedish companies doing business in China for countermeasures, including Ericsson and its largest shareholder, Investor AB, the investment company of Sweden's prominent Wallenberg family, a significant shareholder in several major European companies.
The likelihood of Ericsson becoming a target for countermeasures prompted the company's CEO Borje Ekholm to mount a lobbying campaign for Huawei. He criticized Swedish politicians and lawyered up to help Huawei fight the Swedish injunction. He noted that only 1 % of Ericsson's sales come from Sweden, compared to 8 % from China, where the company has 13,000 employees and a factory.
China is the world's largest 5G facility market. According to an article published in the Global Times on Monday, China's four state-owned wireless carriers are recently organizing 5G equipment tests to determine which suppliers to use in the next phase of building a nationwide cellular network.
With encouragement from the media and Communist Party affiliates, the Chinese Internet essentially purged Swedish retailer Hennes & Mauritz AB of its H&M brand this March. The move was a boycott of H&M's previous claim that it would seek to ensure that no Xinjiang cotton was used.
The U.S. and British governments and human rights groups have accused the Chinese government of committing genocide and forced labor in Xinjiang. China has called the allegations lies, claiming its actions in Xinjiang aim to crack down on terrorism and improve people's livelihoods.
Source: https://www.wsj.com/articles/china-threatens-retaliation-against-ericsson-if-sweden-doesnt-drop-huawei-5g-ban-11620740192?reflink=desktopwebshare_permalink
