The West is worried about Malaysia and 5G

Briefly: European and US officials are reportedly worried Malaysia could include China’s telecoms giant Huawei in its 5G infrastructure rollout.

Swedish firm Ericsson won the $2.5B tender to build Malaysia’s 5G network in 2021, but Malaysian officials recently decided to review the decision. And that’s got the West sweating like a balloon seller at a jousting tournament.

What’s the West’s issue with Huawei?

  • 📡 The nature of the tech makes securing 5G more difficult
  • 👬 Huawei reportedly has close ties with China’s military and intel
  • 📖 A 2017 law in China requires firms to cooperate with Beijing, and
  • 💻 China has allegedly used Huawei kit to conduct espionage already

So Huawei is now effectively blacklisted across much of the West.

For its part, Huawei says the West is just using national security as a fig leaf to protect its firms from foreign competition. Huawei’s been lobbying hard for a piece of the Malaysian pie, and Kuala Lumpur’s surprise review suggests it may be working.

Intrigue’s take: Being caught in the middle of a game of great powers is never fun, but it’s particularly annoying when it threatens your download speed.

So, like many others, Malaysia is now having to make a call: keep China happy (involve Huawei) or keep the West happy (exclude Huawei). The nature of 5G tech – and US-China relations – suggests there’s no easy middle ground here.

Also worth noting:

  • The EU has around €25B invested in Malaysia. Malaysia’s prime minister says China recently made a single pledge to invest $39B.
  • Huawei controls 20% of the telco equipment market outside China. Swedish firm Ericsson and Finnish firm Nokia each have an 18% share.