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Trade war

Japan bans Huawei and its Chinese peers from government contracts

Move aligns with US, prompting ‘serious concerns’ and protests of 'discrimination'

Japan's new procurement guidelines, which do not single out any company by name, are designed to prevent leaks of sensitive information.    © Reuters

TOKYO -- Japan's central government ministries and Self-Defense Forces received guidelines on Monday that effectively bar them from buying personal computers, servers and telecommunications equipment from Huawei Technologies and other Chinese companies.

The guidelines, which do not single out any company by name, are designed to prevent leaks of sensitive information. They also put Japan in step with the U.S., which has imposed sanctions on Chinese companies for their dealings with Iran and other matters. Huawei is suspected of flaunting the sanctions and exporting products to Iran.

In addition, the U.S. fears some China-made electronics and telecommunications equipment could be embedded with malicious software able to glean sensitive information.

It is the first time Japan's government has compiled procurement guidelines for telecom equipment. Procurement and systems officers at all ministries were briefed about the guidelines on Monday.

The new rules will take effect sometime next year, after a training period.

The Chinese embassy in Tokyo expressed "serious concerns" over reports that the Japanese government will ban government purchases of Huawei and ZTE equipment.

According to a statement posted on its website dated Dec. 7, "There is no evidence that Huawei and ZTE products have security risks," the embassy said. It added that the decision to ban them will raise suspicions that Japan is imposing "discriminatory practices against specific companies in specific countries, which is unfavorable not only for Japan in attracting foreign investment, but also for economic cooperation between China and Japan."

The guidelines cover personal computers, servers, routers and other equipment used by Japanese government organizations. If malicious software and viruses are embedded in such equipment, data could be leaked and systems could fail to operate. Sensitive information regarding SDF movements and operations could also be extracted.

Japanese government organizations generally procure telecom equipment through general competitive bidding based on price, but once the new guidelines take effect security will also be considered.

The U.S. has been out front in taking measures against Chinese companies' communications equipment. In April, Washington barred ZTE from doing business with American businesses for selling equipment to Iran and North Korea despite sanctions. In August, Washington enacted the National Defense Authorization Act, or NDAA, which includes a planned ban on companies around the world that use products from Huawei and other Chinese technology companies.

A Japanese government source said Washington has provided information regarding security risks and China-made equipment. Japan's stricter procurement standards reflect the information.

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