The United States is asking its allies to avoid Huawei's equipment, the WSJ reports; sector stocks fall

(Reuters) – US government tries to persuade wireless and ISPs to avoid telecommunication equipment from Chinese company Huawei Technologies [HWT.UL], reported the Wall Street Journal Thursday.

The decision would exacerbate the pressure on the world's largest telecommunication equipment manufacturer, under the control of Western intelligence agencies for its alleged links to the Chinese government and the possibility that its equipment could be used for espionage.

US officials have contacted their government counterparts and telecommunications officials in friendly countries where Huawei equipment is already widely used to deal with what they view as cyber security risks, according to the WSJ report, which quotes people anonymous aware of the situation.

The United States has already largely banned Huawei from providing its government and subcontractors, while Australia has banned the company from providing equipment for a 5G mobile network.

Huawei, which has repeatedly denied being interested in intelligence activities for any government, is one of the Chinese technology companies under the control of the US government as a trade war between the two countries intensifies.

Friday, shares of his rival ZTE Corp (Hong Kong)0763.HK) fell 5.6%, resulting in a decline in the sector. They recovered some losses to trade down 2% around noon, while the shares of the company in Shenzhen (000063.SZ) were down 3 percent.

The value of ZTE has almost halved this year, following a three-month ban imposed by the US government on US companies selling parts to the company, and a subsequent settlement of 1.4 billion dollars.

On Friday, an index of the main telecommunications companies of the continent .CSI000994 fell more than 3%.

FINANCIAL AID

Washington has considered increasing financial aid for developing telecommunications in countries fleeing equipment manufactured in China, the WSJ reported on Thursday.

One of the government's concerns is the use of Chinese telecommunication equipment in countries hosting US military bases, such as Germany, Italy and Japan, the report added.

A spokesman for the US Department of Commerce said in a statement that the department would remain vigilant against any threat to the national security of the United States.

Huawei did not immediately respond to a request for comment from Reuters.

Earlier this week, the company announced it has signed 22 commercial contracts for 5G networks.

It will also open a new German information security laboratory, which will revise the source code, in order to gain regulatory confidence ahead of the country's 5G mobile spectrum auction, a German regulator announced last month. to Reuters.