Chinese telecom giant huawei announced on the 26th that it has set up its first factory outside of China in Brumath, a suburb of Strasbourg in eastern France, but the French government, which has always welcomed foreign investment in a high-profile manner, has kept a low profile, especially when the location of the factory was chosen near several French army military bases. After many allegations of espionage activities, Huawei’s choice of location, the French community has also raised questions.
Chinese telecom giant Huawei announced on the 26th that it was setting up a factory in Brumath, a suburb of Strasbourg in eastern France, its first outside China. However, Huawei set up a factory location near a number of French Army military bases, raising questions.
Named Huawei’s European wireless factory, with an estimated investment of 200 million euros, the 40,000-square-meter plant is scheduled to begin production in 2023, manufacturing mobile communications-related equipment including 5th generation mobile communications (5G) networks, and will eventually employ 500 people. Huawei is committed to working with 300 French suppliers and 3,100 European partners through the Brumat plant.
The location of the factory was chosen in eastern France, and Jacques Biot, chairman of Huawei France, said, “Alsace is located in the heart of Europe and has an extremely rich human, social and industrial organization.” However, there are many military establishment areas in the area and allegations of espionage are heavy, he stressed, “This location was chosen from among fifty suggested by the authorities.”
Although the French government has said that as long as there is no risk to sovereignty, it does not pose a problem. However, as long as there is foreign direct investment in France, there will be concerns, especially with factories set up close to sensitive areas of the French military, especially sites associated with the Directorate of Military Intelligence (DRM). Antoine Bondaz, a professor at France’s Institut d’Etudes Politiques de Paris (Sciences Po), said: “There have always been concerns about Huawei, particularly its ties to the Chinese Communist Party, but also the impact of the National Intelligence Act passed in 2017 on its operations, particularly the processing of collected data. In addition, France confirmed in July 2020 a reinforced French policy towards Huawei, but not a ‘total ban’, only in cities hosting strategic points, prioritizing for example Brest, headquarters of the maritime deterrent submarine, or Rennes, a key cybersecurity operations center, to organize the removal of installed including 5G infrastructure associated with 4G networks, limiting to the extent possible the installation of network China for 5G infrastructure. “
Huawei is not a state-run company, but it symbolizes China’s socialist-style market model, said Jean-Francois Dufour, president of DCA Chine Analyse, the French industrial policy research office in China. Although most of the company’s capital is in the hands of its shareholders, it is in fact dependent on funding from the Chinese government. Huawei’s success over the past 10 years has been due to massive financial support from China’s state-run banks. It is definitely not a power-independent company, and its survival depends on its relationship with the government.
Many countries, including France, have rejected the use of Huawei’s 5G equipment because the US has always accused it of spying for the Chinese government. But because France is relatively friendly to Huawei and has not banned Huawei’s investment and activities in France, this strategic business decision has sparked discussion from all walks of Life as check diplomacy used to convince governments and localities that Huawei can make a positive contribution to the economy and to make people forget the shadow of its parent company China. However, France, like other European countries, has raised the issue of the need to reconcile security and economic development.
However, Beaudoin points out that attracting foreign investment has now become a top priority for the French authorities, who see Chinese companies as a potential major source of investment. Chinese investment in Europe increased significantly between 2010 and 2016, reaching a peak of 37 billion euros, but has been declining since then, with France also gaining less than the UK, Germany and Italy, and even less than Finland in relative terms.
Bodan notes that Chinese investment in France created only 1,364 jobs in 2019, less than the 1,584 in Canada, 1,717 in Spain, 2,290 in Switzerland and even more significantly less than the 5,927 in the UK or the 7,886 jobs invested in the US.
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