Denmark passes legislation preventing Chinese firms from 5G infrastructure involvement in May 2021.
Context
In May 2021, the Danish parliament passed a law empowering the government to screen all new foreign investments on the basis of national security concerns. Although China was not directly mentioned, the bill was widely interpreted as motivated in part by concerns around Chinese firms’ involvement in Denmark’s 5G infrastructure. The new law states that “[t]he purpose of this Act is to prevent that outside foreign direct investment and special economic agreements may pose a threat to national security or public order in Denmark, through screening and potential interference with such investments and agreements.”
Prior to this measure, in December 2020 negative media attention in Denmark focused on Huawei Denmark’s Communication Manager Tommy Zwicky having resigned his position, after being challenged on social media about allegations that Huawei was involved in human rights abuses in China’s Xinjiang province. In March 2019 Danish telecoms firm TDC ended its 5G partnership with Huawei and switched to Ericsson, citing security concerns. In February 2019, two Huawei Denmark employees were expelled from the country for work visa compliance issues following a “routine investigation” by the Danish government.
Added to this context is the great power competition between China and the US, and also the introduction of similar measures among other European Union states.
Impact
Shortly before the introduction of this mechanism, in April 2021, a multi-spectrum bandwidth auction was held by the Government of Denmark, with winning firms including TDC, Hi3G Denmark and TT-Network, none of which were reported to have partnered with Huawei. Compared to other states, reporting has not focused on the need to phase out Huawei equipment in existing networks.
Responses
(i) Chinese Government and Industry Responses
During debates over the possible introduction of this measure, on CEO of Huawei Denmark, Jiang Lichao, reportedly sent a letter to the Danish Prime Minister, Mette Frederiksen, stating that the company would reconsider its presence in Denmark if security conditions were placed upon it. The letter, dated December 17, 2019, asks for clarity on whether the company is welcome to participate in Denmark’s 5G infrastructure projects, and also notes that “[a] fair and friendly business environment is a prerequisite for any enterprise to invest in any country”. Reportedly, earlier the same month, China’s ambassador to Denmark suggested that a trade deal between China and the Faroe Islands (a Danish possession) would be dropped if measures against Huawei went ahead.
(ii) Danish Government and Industry Responses
In June 2021, one month after the introduction of the measures, the Danish Minister of Defence, Trine Bramsen, told press that, in the context of 5G infrastructure, “In order to protect Denmark and the Danes, we want to collaborate with someone with whom we already have alliances.”
Status
At time of writing (November 2024) this measure remains in place.
Key Takeaways
This case is another example highlighting the extent of US influence and great power rivalry on the issue of digital infrastructure in small states. What is notable is China’s threatening of ending investment and trade deals with the Faroe Islands in responses to the measures, as well as the intensive lobbying it undertook in the imposing state during the policy debate stage.
References and Further Information
Andreassen, A.M. 2021. “Danish Huawei exec who left in protest finally explains why.” Journalisten. February 1. Available at: https://journalisten.dk/danish-huawei-exec-who-left-in-protest-finally-explains-why/
Bicheno, S. 2020. “Huawei threatened to pull investment from Denmark in response to new screening law.” Telecoms. May 14. Available at: https://www.telecoms.com/5g-6g/huawei-threatened-to-pull-investment-from-denmark-in-response-to-new-screening-law
Cerulus, L. 2020. “Huawei put pressure on Denmark in wake of diplomatic row.” Politico. May 13. Available at: https://www.politico.eu/article/huawei-put-pressure-on-denmark-in-wake-of-diplomatic-scandal/
European 5G Observatory. 2021. “5G auction in Denmark raised 2.1 billion DKK (279.1 million EUR)”. April 23. Available at: https://5gobservatory.eu/5g-auction-in-denmark-raised-2-1-billion-dkk-279-1-million-eur/
Huawei Denmark. 2019. Letter to Prime Minister Mette Frederiksen. December 17. Available at: https://www.politico.eu/wp-content/uploads/2020/05/Berlingske-Huawei-letter-to-Frederiksen-December-2019.pdf
ITWeb. 2019. “Denmark added to Huawei worry list.” February 5. Available at:
Larsen, M. 2020. “Huawei’s Danish Communication Manager quits his job after revelations regarding face recognition of Uighurs.” ScandAsia. December 21. Available at: https://scandasia.com/huaweis-danish-communication-manager-quits-his-job-after-revelations-regarding-face-recognition-of-uighurs/
O’Dweyer. 2019. “Huawei’s ‘No-Spy’ Promises Aim To Quell Security Concerns.” Global Finance. October 11. Available at: https://gfmag.com/news/huaweis-no-spy-promises-aim-quell-security-concerns/
Reuters. 2021. “Denmark passes law to screen foreign investments for security risks” Economic Times. May 6. Available at: https://economictimes.indiatimes.com/news/ defence/denmark-passes-law-to-screen-foreign-investments-for-security-risks/articleshow/82428065.cms?from=mdr – google_vignette
Reuters. 2023. “European countries who put curbs on Huawei 5G equipment”. ET Telecom. September 29. Available at: https://telecom.economictimes.indiatimes.com/ news/telecom-equipment/european-countries-who-put-curbs-on-huawei-5g-equipment/104048918
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