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New Zealand says China's Huawei hasn't been ruled out of 5G

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New Zealand Prime Minister Jacinda Ardern said her government is working through a process and Huawei could still be involved.

[WELLINGTON] New Zealand's government is holding the door open for China's Huawei Technologies to help develop the nation's 5G network, amid concerns the issue is fraying ties between the two nations.

New Zealand's spy agency, the Government Communications Security Bureau, in November stopped telecommunications company Spark from using Huawei 5G equipment, citing significant national security risks.

Prime Minister Jacinda Ardern said on Tuesday her government is working through a process and the Chinese company could still be involved if Spark can satisfy the GCSB's concerns.

"There's been no final decision here yet," she told Newshub. "It is now currently with Spark to mitigate the concerns that have been raised. That is where the process sits."

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Spark in November said the GCSB ruling meant it couldn't implement its proposal to use Huawei equipment for its planned 5G network. It hasn't said whether it will try to mitigate any of the GCSB's concerns.

RETALIATION FEARS

New Zealand's decision to block Huawei followed Australia's lead, and came after reported pressure from the US. It has led to fears that China is showing its displeasure by impeding trade and tourist flows. Ms Ardern denies any friction and says that while her nation is a member of the "Five Eyes" intelligence alliance that includes the US, Australia, Canada and the UK, it makes these decisions independently.

The topic is getting renewed attention amid reports the UK may be able to accommodate Huawei in its 5G plans.

Signs of strain in the relationship with China have put the New Zealand government under pressure. Recent incidents include an Air New Zealand jet to Shanghai being forced to turn back after an administrative error, the postponement of the formal launch of the 2019 China New Zealand year of tourism in Wellington because senior Chinese officials were unable to attend, and Ms Ardern's inability to reschedule a trip to Beijing to meet President Xi Jinping.

ECONOMIC IMPACT

Any cooling of the friendship could have significant ramifications for the South Pacific nation, which is in the process of negotiating an upgrade of its free-trade agreement with China. The world's most populous country and second-largest economy has become New Zealand's biggest trading partner, taking a quarter of all exports, while surging Chinese visitors have helped make tourism the country's biggest foreign-exchange earner.

On Monday, Ms Ardern pushed back against claims of a deteriorating relationship, saying it was "robust and mature."

"Our relationship with China is complex, but our goods exports are up, our tourism numbers are up and there are a number of other indicators that show we still have a strong relationship despite those complexities," she said.

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