Japan Govt to Exclude Huawei, ZTE from Procurement

December 10, 2018

Tokyo--The Japanese government on Monday set the policy of effectively excluding major Chinese telecommunications equipment makers Huawei Technologies Co. and ZTE Corp. from procurement contracts.

At a meeting of a group of cybersecurity-related officials, participants agreed that no government entities will procure information and communications systems with malicious functions.

Although the government did not name specific companies, it apparently has in mind the two Chinese companies. The government group is headed by Deputy Chief Cabinet Secretary Kazuhiro Sugita.

The policy may dampen the Japan-China relationship, which has been improving. Last week, the Chinese government expressed grave concern in response to media reports that Tokyo would decide on such a policy.

Japan received an inquiry from China through a diplomatic channel before the policy is set, Chief Cabinet Secretary Yoshihide Suga told a press conference Monday.

In its reply, Japan underlined the importance of cybersecurity and said that its cybersecurity policy complies with international rules, according to Suga.

The new procurement policy "is not intended to exclude any specific company or product," Suga said.

"It is extremely important to continue to develop the friendly, cooperative (bilateral) relationship," including through the planned visit to Japan by Chinese President Xi Jinping, he added.

The procurement policy will affect 23 government entities, including the Cabinet Secretariat, the foreign, defense and finance ministries and the National Police Agency, starting April 1, 2019.

The entities will select information and communications system providers through comprehensive evaluations, instead of prioritizing procurement costs, in order to exclude harmful products.

The U.S. national defense authorization legislation enacted in August bans government institutions and their partner companies from using the two Chinese companies' products, out of concern that China may use such products for information collection and cyberattacks.

The U.S. government is believed to have requested Japan and other allies to take similar action.

Australia and New Zealand have decided to exclude Huawei from projects to build fifth-generation, or 5G, mobile networks. Jiji Press