In a reversal, Britain will exclude Huawei from a role in its 5G phone network

Britain backtracked Tuesday on plans to give Chinese telecommunications company Huawei a limited role in the country’s new high-speed mobile phone network, a decision that is likely to add to the increasing acrimony between London and Beijing.

Britain said it imposed the ban after U.S. sanctions made it impossible to ensure the security of Huawei equipment, forcing it to start turning to other suppliers for components. The U.S. also threatened to sever an intelligence-sharing arrangement because of concerns that Huawei equipment could allow the Chinese government to infiltrate U.K. networks.

British Culture Secretary Oliver Dowden gave local telecom operators until 2027 to remove Huawei equipment already present in Britain’s 5G network. He said the decision would delay the 5G rollout and add costs of up to 2 billion pounds ($2.5 billion) but that it had to be done.

“This has not been an easy decision, but it is the right one,” Dowden said, adding that from the end of this year, telecom operators must not buy any 5G equipment from Huawei.

Crucially for telecom operators, the government opted not to order firms to rip out legacy equipment manufactured by Huawei in earlier systems, such as 4G. Such a decision might have caused havoc in British telecom systems.

Prime Minister Boris Johnson was under pressure from rebels in his Conservative Party who criticized China’s new Hong Kong national-security law and its treatment of ethnic Uighurs, as well as Huawei’s links to the Chinese government. Ten Conservative lawmakers sent a letter to Johnson demanding that he remove Huawei from “the U.K.’s critical national infrastructure.”

Johnson in January sought to balance economic and security pressures by agreeing to give Huawei a limited role in Britain’s 5G network but excluding the company from core components of the system and restricting its involvement to 35% of the overall project.

But the move set up a diplomatic clash with the U.S., which threatened to cut off security cooperation unless Britain dumped Huawei. Amid continued pressure to remove Huawei from communication networks entirely, Washington imposed new sanctions in May that will bar companies around the world from using American-made machinery or software to produce chips for the Chinese company.

Huawei expressed disappointment, saying that the decision threatened to move “Britain into the digital slow lane, push up bills and deepen the digital divide.”

“Regrettably, our future in the U.K. has become politicized. This is about U.S. trade policy and not security,” said Ed Brewster, a spokesman for Huawei U.K. “Over the past 20 years, Huawei has focused on building a better connected U.K. As a responsible business, we will continue to support our customers as we have always done.”

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The back-and-forth has put Huawei at the vortex of tensions between China and Britain.

Last fall, Britain called on China to give the United Nations High Commissioner for Human Rights free access to the Xinjiang region, where most of the country’s Uighur people live.

More recently, Johnson’s government has criticized China’s decision to impose a sweeping new national security law on Hong Kong. Britain accused the Beijing government of a serious breach of the Sino-British Joint Declaration under which the U.K. returned control of Hong Kong to China in 1997, and announced it would open a special route to citizenship for up to 3 million eligible residents of the city.

China’s ambassador to Britain, Liu Xiaoming, last week decried what he described as “gross interference” in Chinese affairs.

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“Britain can only be great” when it has an independent foreign policy, Liu said, adding that it sets a bad precedent to “make your policy in the morning and change it in [the] evening.”

Liu suggested that Chinese companies might think twice about investing in Britain. “They are all watching how you handle Huawei,” he said.

Rana Mitter, an Oxford University history professor specializing in China, said that the Hong Kong security law — combined with broader resentment about the way China handled information about the coronavirus — has created increased wariness among British politicians and the public.

But for China, it is the way Britain has handled the Huawei issue that is the major problem. Even if Britain decides that buying Huawei isn’t a good idea, this could have been done more discreetly, Mitter said.

“There is a sense, I suspect, in Beijing that the Huawei row has made China lose face,” he said. “And this is one of the things that clearly does not go down well with China, which is, of course, a proud country, the world’s second-biggest economy with the capacity to use that economic power when it wants to, and also a country which in general feels on the back foot at the moment because of the COVID pandemic and the world’s reaction to that.”

Before the decision, Huawei announced that its U.K. chairman, who was previously the boss of energy company BP, would step down early. John Browne’s term was due to end in March, but he is now expected to depart in September.