On Wednesday, Local time, Chancellor Angela Merkel's cabinet approved a security bill that would allow the conditional use of products and technology from foreign companies like Huawei in 5G networks, but only if they are monitored and guaranteed safe.
Under the bill, providers of network equipment must ensure that their equipment is safe to use, making them financially liable for any violations.The legislation would also provide technical and legal support to German security agencies to monitor the security of networks.
When the German government unveiled the draft security bill earlier this month, Horst Seehofer, the interior minister, said the government was seeking to establish a legal basis that would address cybersecurity concerns while keeping the market open to competing technologies."We have regulations in place that allow us to monitor in an appropriate manner, and our security interests are greatly protected," he said.
Given that China is Germany's largest trading partner and the biggest market for many German companies, the country has been reluctant to respond to US calls for restrictions on Huawei.Instead, Germany has sought to take a middle ground, allowing Huawei to operate in Germany but supervising it to appease American Allies.Although Germany is one of Europe's richest countries, it lags behind other countries in high-speed Internet infrastructure, making the rapid and comprehensive rollout of 5G networks all the more critical for businesses and homes.
Moreover, an outright ban on Huawei's operations in Germany could face legal hurdles, but it also threatens Germany's substantial economic interests in China.One-third of new car sales in China come from German manufacturers, and China is the biggest single market for the big German carmakers Volkswagen, Daimler and BMW.German carmakers rely on co-operation with Huawei on technology for connected cars and self-driving cars, and Deutsche Telekom has integrated Huawei's technology closely into its 4G and 5G wireless broadband networks.
It said the bill must also be submitted to the Bundestag before it can be formally passed.
Despite the challenges, huawei, the industry leader, increased its share of revenue in the telecom equipment market to 30% in the first three quarters of 2020, up from 28% for the whole of 2019, according to data compiled by Dell 'Oro Group, a market research firm.This has been driven by China's efforts to build a nationwide 5G network, in which Huawei has played a leading role.