They see it rollin', they hatin'
Written by Javier Maquieira, senior associate
Edited by Tom Gillingham, associate partner
One company is at the centre of the current battle for influence between the United States and China: Huawei. But efforts by US officials to counter Beijing’s presence in Europe will be taken to a whole new level today and over the next three days.
The US national security adviser, Robert O’Brien, landed in Paris yesterday to attend bilateral meetings with his European counterparts, including Sir Mark Sedwill, currently Britain’s most senior security official. At the top of O’Brien’s agenda is getting European countries to remove Huawei technology from their 5G networks.
While some countries like France are not banning Huawei’s equipment but encouraging operators not to use it, others such as Spain will continue to rely on Huawei 5G software after the Spanish national intelligence service certified it as safe and compliant with existing law.
Meanwhile, central and eastern European nations such as Romania, Poland, the Czech Republic, Latvia and Estonia have all pledged not to allow Huawei access to their markets, alleging fears of foreign state interference and aligning with the US position against the Chinese sphere of influence.
Back in Britain, a government statement is expected to say today that no new Huawei 5G equipment can be installed after 2021, requiring the debarring of all existing 5G software later, possibly by 2025. The move marks a drastic shift in the UK’s policy towards the Chinese tech giant, having initially allowed it to take part in the country’s 5G development in January.
The decision back then went against Washington’s warnings of “back door” spying on UK communications by Beijing and eroded trust between both countries, putting any co-operation, nay trade agreement, at risk. It also found opposition at home among rebel Conservative MPs, who have in recent days called on prime minister Boris Johnson to set the removal deadline before the next election in 2024 or face revolt.
Now Britain is set to take a harsher stance towards Huawei with plans to unite the so-called “Five Eyes” security partners – the UK, US, Australia, Canada and New Zealand – to find joint ways of investing, procuring and researching a fast track for Huawei’s rivals.
However, this won’t be an easy decision for the UK government, as alternatives will come with much higher costs and delays in 5G rollout. What’s more, BT’s chief executive, Philip Jansen, told the BBC yesterday that removing Huawei from the UK’s telecoms infrastructure in under 10 years would be “impossible”, with service blackouts likely to happen if BT is forced to pull out the Chinese firm’s 5G kit too quickly.
With a no-deal Brexit looming on the horizon and post-pandemic economic recovery projected to be sluggish, Johnson’s government is bound to make many crucial decisions with very little time.
The state of California has reimposed restrictions on all indoor activities after a 20% increase of people testing positive for Covid-19 in the past two weeks. California’s Democratic governor, Gavin Newsom, warned the virus is “not going away anytime soon” as he rolled back reopening plans in America’s most populous state.
Poland’s incumbent president, the populist Andrzej Duda, has been re-elected after narrowly beating his liberal challenger, Rafał Trzaskowski, who conceded defeat on Monday afternoon. Duda, who promised to back “family values” at the expense of LGBTQ+ rights during his campaign, has vowed to continue with his party’s legislative agenda, which has been seen as eroding the rule of law and judicial independence in the country.
The World Health Organisation (WHO) has warned that the coronavirus pandemic will get “worse and worse” if governments fail to take more decisive action, as “mixed messages from leaders” are undermining public trust. Tedros Adhanom Ghebreyesus, the WHO’s director-general, added “there will be no return to the old normal for the foreseeable future”.
Business and economy
According to theFinancial Times, McKinsey told Wirecard to take “immediate action” in relation to the absence of controls at the payment group’s largest business in June 2019, more than a year before its collapse. The consultancy firm’s assessment, commissioned by the management and supervisory boards at Wirecard last year, highlighted compliance shortcomings, with “non-existent” controls creating a “significant risk” for the group. (£)
Diageo has announced plans to sell Johnnie Walker whisky in paper bottles. The drinks giant is running a trial of the new environmentally friendly packaging from spring 2021, as the firm is looking for ways of using less plastic across its brand portfolio. The paper whisky bottles, which will be co-launched with packaging producer Pulpex, will be made from wood pulp and be fully recyclable.
G4S is set to cut more than 1,100 jobs following a review of its cash-handling business in the UK. The security company’s Cash Solutions arm, which includes vans picking up and delivering cash to businesses across the country, has been impacted by weaker demand for physical money amid the surge in online payments and digital banking during the Covid-19 pandemic.
Columns of note
Helen Dickinson and Lola Young argue inThe Times that the fashion industry faces an opportunity to reinvent itself after a dramatic loss of sales for spring/summer collections, with responsible retailers working towards green objectives with returning schemes, in-store repairs and garment rentals. As part of this, they call for more initiatives to improve the UK’s recycling infrastructure and tackle labour exploitation. (£)
InThe Herald, Andrew McKie looks at the many problems that beset the care sector in the UK, and the urgency of addressing them despite the lack of popularity of some of the solutions.
Source: The Times
What happened yesterday?
London stocks closed in the green on Monday, with the FTSE 100 ending the session up 1.33% at 6,176.19 as hopes of a Covid-19 vaccine lifted sentiment. Across the Atlantic, news of virus restriction rollbacks in California, Texas and Arizona led the S&P 500 to give up initial gains to end almost one per cent lower while the Nasdaq fell 2.1%.
In company news:
Centamin was up 1.92% after the gold miner reported higher second-quarter production and said it was on track to meet full-year guidance, with the pandemic having not materially affected operations.
G4S was 9.25% higher by close of trade, after the security services firm said first-half profit would be significantly ahead of market consensus.
What's happening today?
Polar Capital Technology Trust
UK economic announcements
(07:00) Gross Domestic Product
(07:00) Manufacturing Production
(07:00) Index of Services
(07:00) Industrial Production
(07:00) Balance of Trade
Int. economic announcements
(07:00) Consumer Price Index (GER)
(10:00) ZEW Survey (GER) - Economic Sentiment
(10:00) Industrial Production (EU)
(10:00) ZEW Survey (GER) - Current Situation
(10:00) ZEW Survey (EU) - Economic Sentiment
(13:30) Consumer Price Index (US)
Did you know?
Expiration dates on bottled water are for the bottle and not the water. This means that eventually, chemicals will seep into the water, making it unsafe to drink.
House of Commons
Justice (including Topical Questions)
Ten Minute Rule Motion
Disabled Facilities Grants (Review) - Liz Twist
Parliamentary Constituencies Bill: remaining stages
Funding for the removal of flammable cladding
- Rushanara Ali
House of Lords
Diplomatic and practical assistance being provided to the government of Taiwan and plans to formally recognise Taiwan as an independent sovereign state - Baroness D'Souza
Ensuring that a COVID-19 vaccine, if developed, is available to and affordable for, low and middle-income countries - Baroness Sheehan
Clauses protecting human rights and maintaining environmental standards in trade agreements negotiated as a result of the UK’s departure from the EU - Lord Haskel
Ensuring ethnic diversity is fully reflected in all aspects of medical teaching and learning - Baroness Thornton
Agriculture Bill – Committee stage (day 3) - Lord Gardiner of Kimble
In recess until 10 August (with the exception of 16, 23, 30 July and 6 August 2020, on which dates business may be programmed by the bureau)