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Huawei woos UK establishment allies as ban fears still loom

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Huawei Technologies throws a glitzy drinks reception in London every June.

[LONDON] Huawei Technologies throws a glitzy drinks reception in London every June. Last year, it had just been crowned the world's biggest telecom equipment maker and the British trade commissioner for China praised strong ties between two countries in a speech.

That party might have been a high water mark. This year, the Chinese tech giant was on the defensive after a US campaign to block it from 5G networks.

At Tuesday evening's event - held at the 400-year-old palace where King Charles I was beheaded - Huawei and its supporters made their case for why the company should remain in Britain at all.

David Willetts, a former minister who oversaw the UK's relationship with Huawei during his time in government from 2010 to 2014, warned a blanket ban in the country would come at too high a cost.

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"It would put globalisation into reverse," he said, and "would mean a post-Brexit Britain was not global at all, because we would only trade on American terms".

This followed a speech from John Browne, chairman of Huawei's UK board and BP Plc's former chief executive officer. He sits on that board alongside Andrew Cahn, a former senior civil servant, who was also there mingling with Barclays Bank chairman Gerry Grimstone and Mike Rake, former chairman of BT Group, a key Huawei customer.

The reception was also attended by representatives of Huawei's biggest British clients, including mobile operators BT and Vodafone Group, as well as an array of senior politicians, including Vince Cable, the leader of the Liberal Democrats, the UK's fourth-largest party.

ECONOMIC CONTRIBUTION

Screens dotted throughout the venue trumpeted Huawei's contribution to UK gross domestic product, which it put at £1.7 billion (S$2.92 billion) in 2018, as well as tax revenues of £470 million last year and its support of 26,000 jobs, to help sway any politicians on the fence.

Britain's decision on Huawei, part of a telecom sector review examining security considerations, has been delayed by an imminent change in prime minister and the US decision to ban its companies from supplying Huawei.

US President Donald Trump, who has pulled Huawei into the country's trade war with China, has argued that Huawei's connections with the Chinese government mean it could allow Beijing to spy through its equipment, which the company denies.

UK officials are evaluating whether the export ban would pose economic risks to Britain's telecom supplies, according to a senior member of the British government, who asked not to be identified as the deliberations are private.

It's unclear how Boris Johnson and Jeremy Hunt, who are vying for Tory leadership to replace Theresa May as UK Prime Minister, would approach the matter. A leak in April showed Ms May was set to green light Huawei's role in non-core network applications.

In the UK, one of the company's most important markets outside China, phone carriers have already started to deploy its 5G antennas; BT launched its 5G network in six cities using the Chinese supplier's equipment last month, and Vodafone is set to follow suit on July 3.

In an emailed statement, former Business Secretary Mr Cable said "the government should not allow itself to be browbeaten by the Trump administration", and argued that the UK should stick with the "perfectly sensible compromise on 5G" that it had appeared to be pursuing before the leak.

"I dealt extensively with Huawei as Secretary of State, and had no reason for complaint about their performance or behavior," Mr Cable said.

BLOOMBERG