China appears to make further Ericsson work conditional on Swedish 5G policy shift

Chinese government-controlled newspaper Global Times has published an ‘exclusive’ in which an anonymous source links Ericsson’s future work in the country with Sweden’s Huawei ban.

The Global Times is owned by the People’s Daily, which is generally considered to be a propaganda arm of the Chinese Communist Party. To what extent the CCP approves every word it publishes is unclear, but it’s safe to assume that when it claims to reflect government policy its sources are legitimate and state sanctioned.

So when it publishes a story headlined Exclusive: Sweden faces ‘last chance’ on Ericsson’s fate in China over 5G equipment test involvement after Huawei fallout: source, it’s not unreasonable to view that as a direct public threat to Sweden by China. The clear inference is that any future business Ericsson might win in China is conditional on Sweden reversing its ban on Chinese vendor involvement in its 5G networks.

It seems the Chinese mobile operators are embarking on the next phase of their 5G roll-out and have invited Ericsson to ‘interview’ for some of the work. The use of such an unusual verb in this context appears to reveal the political nature of the process, with extra considerations over and above things like technical merit and value for money apparently in play.

A ‘source close to the matter’, who we presume to be a government spokesperson, indicated this could represent Sweden’s last chance to reverse its Chinese vendor ban. “The source also stressed that participating in the 5G equipment test organized by Chinese mobile operators does not mean Ericsson will be hired, and Sweden has to carefully reconsider its China policy in the regard,” continued the story.

“The invitation to Ericsson is just an interview opportunity rather than a final call of hiring, since the Chinese people won’t tolerate any vicious deed against them,” the source told the Global Times. “Sweden has excluded Huawei, while Ericsson is planning to continue to take orders in China, which is tantamount to smashing the bowls of Chinese companies. However, they still want their own companies to continue to eat the cake of Chinese market. Will the 1.4 billion Chinese people agree?”

Given the infrequency with which the Chinese government consults its population on anything, we’re unlikely to get a conclusive answer to that question. Their unelected representatives, however, seem to be taking an increasingly belligerent stance on the matter. The increasingly emotive and confrontational tone of stories like this make it very easy to believe that, presuming Sweden doesn’t capitulate, Ericsson can forget about winning any more 5G work in China.

This is, of course, the outcome Ericsson CEO Börje Ekholm has been dreading ever since the ban was announced. China used the Global Times to issue a previous warning and now we’ve reached the moment of truth. The recent story quotes another anonymous random as saying the Swedish Huawei ban is purely a political move, as if a Chinese Ericsson ban would be any different.