The Portugal-China Chamber of Commerce and Industry (CCILC) is a non-profit organization, established in 1978, with “public utility” granted and confirmed yearly by the Portuguese government, that has been instrumental in continuously fostering the economic and trade relations between Portugal and China. CCILC aims to promote and facilitate bilateral business opportunities, providing a platform for Portuguese and Chinese companies to network, collaborate, and access new markets. It offers a range of services including market research, business matching, and support for trade missions, helping to bridge the gap between the two distinct business environments and cultures.

In addition to its core activities, CCILC plays a significant role in cultural exchange and mutual understanding between Portugal and China. It organizes multiple events, seminars, and workshops focusing on key sectors, such as technology, tourism, and renewable energy. By doing so, it not only enhances economic ties, but also strengthens know-how exchange, cultural and social connections, contributing to the long-term partnership between the two nations. Through its efforts, CCILC has established itself as a vital link in fostering sustainable and mutually beneficial economic growth.

We welcome the European Commission’s efforts in trying to understand the digital infrastructure needs and, via this White Book, pave the way to address those challenges in the coming years. ICT is the basis of our economies and of our day-to-day activities, and we therefore applaud this initiative.

We regret, nonetheless, that such an important endeavour seems to have been contaminated at such an early stage by a posture that can in fact make it more difficult to achieve the goals of reinforcing the European telecom infrastructure. Namely by making investment from Chinese companies more difficult, and labelling them “high risk vendors”.

Below, we share our considerations on the matters which make us less comfortable in this process, in the hope that the European Commission may still take them into consideration in the oncoming legislative processes.

CCILC’s Considerations

Although we welcome the European Commission’s White Paper on how to harness Europe’s digital infrastructure needs, which includes a series of forward-looking proposals to reinvigorate investment in European networks, we strongly oppose to the idea that Chinese vendors – Huawei and ZTE – as 5G suppliers are more risky than other companies.

When we read that the Commission “considered that Huawei and ZTE present in fact materially higher risks than other 5G suppliers and confirmed that decisions adopted by Member States to restrict those suppliers are justified and compliant with the 5G Toolbox”, and that the “gaps left by these high-risk vendors in the supply chain require the development of new capacities provided by existing or new actors”, we see an unjustified blockage to Chinese companies’ activity in Europe.

We believe that, under future digital networks legislation to be drafted and implemented, restricting companies from these countries without any factual evidence would be a breach of national, EU and WTO laws, in violation of free trade, freedom of goods and services, right to property and to conduct a business, fair and non-discrimination principle, no quantitative restrictions and national treatment/most favoured nation treatment principle. It is also illogical, from an economic point of view, to block the most competitive and advanced suppliers in the hope that the European industries will become more competitive without competition.

This is especially important because Huawei has been a key player in expanding and innovating the telecom sector in Europe, with many 5G network suppliers in European countries being Chinese. There is a reason for that: Chinese companies like Huawei and ZTE provided top quality, reliable equipment in a timely fashion to European telecoms, ensuring that Europe had a top telecom service, ensuring connectivity, enhancing productivity, driving innovation, creating jobs and fostering digital transformation. In 2015, Huawei was awarded “Biggest Contribution to 5G Development” at 5G World Summit 2015 for its continuous innovation and industry contributions to 5G, particularly for the new air interface technologies.

Countries that decided to ban Huawei from its 5G network have been experiencing a degradation of service levels and customers have been called to pay for the implementation of new, more expensive equipment from providers who cannot keep up with the demand. This will likely continue if Europe decides to keep this stance regarding Chinese companies.

We believe that cybersecurity should be a top concern. However, for it to be effective, it should address genuine threats to security.

If we think of the so-called High-Risk Vendors, the political aspect of security assessments may be exacerbated and go beyond the proportionality required by International, European and national laws. The effectiveness of judicial protection may also be jeopardized. Furthermore, it will bring economic harms to the EU society and delay the digitalization agenda.

We conclude that “a joint EU governance system on submarine cable infrastructures could be envisaged including (…) further actions to secure supply chains and avoid dependency on high-risk third-country suppliers” will negatively impact European’s leading position in the 5G rollout and implementation.

We also believe that the concept of high-risk vendors, based on political and geographical issues, should not be introduced into the Digital Networks Act or any other acts that can impact the development of network technologies in Europe. Rather than a proved risk, this preventive concept, which has no solid grounds, and for which, so far, no evidence whatsoever had been presented, can be responsible for potential impacts on EU’s budgets, business environment, economy, and sense of fairness and justice by foreign investors.

This means that such unfounded blockages may have a huge negative impact in terms of foreign investment environment, job losses and industry development.

In the end, customers across Europe will be the ones paying for these protectionist measures, which conflict with the European people’s interest, further degrading their experience and the level of service they now take for granted. At the same time, Europe’s drive for innovation in the telecom sector will be halted, and ultimately harm European competitiveness.

We still have time to change course in the right direction.