The UK government has acted to reduce the impact of a security report that is set to criticise the central role played by Huawei in the UK's telecoms infrastructure in order to avoid a trade backlash from China, according to the Financial Times.
The FT, citing unnamed sources, said a report to be issued this week by the Intelligence and Security Committee has been heavily redacted by the government amid fears that it will further exacerbate tensions with Beijing and negatively impact Chinese investment in the UK.
The report is expected to call for an audit to identify where Huawei's technology is being used, and propose the introduction of greater surveillance and oversight at a centre in Banbury, Oxfordshire, opened three years ago by Huawei to test its equipment.
Huawei declined to comment, according to the report.
Trade relations between the European Union, of which the UK is a member state, and China are already strained after EU Trade Commissioner Karel De Gucht cited Huawei and fellow Chinese vendor ZTE for engaging in unfair trade practices, and said if negotiations with China failed to produce a resolution, the EU is ready to move against the telecom equipment vendors.
However, Europe's major equipment vendors ,including Ericsson and Nokia Siemens Networks, have not supported the EU move due to fears that they will be shut out of the lucrative Chinese telecoms market.
The FT report now suggests that the UK government is also fearful of losing valuable Chinese business, and noted that relations between the UK and China have been strained since a meeting between David Cameron, prime minister, and the Dalai Lama a year ago.
The Intelligence and Security Committee started its investigation into the relationship between Huawei and BT last year over growing security concerns. Huawei has been a major supplier to BT since 2005.
"In the background are allegations that Huawei has links to the People's Liberation Army in China, and that any Chinese company is ultimately subject to the Chinese government," Sir Malcolm Rifkind, the committee's chairman, said in an interview with The Guardian last October.
Huawei and ZTE have consistently and vehemently denied benefiting from illegal state support or breaking any trade rules, as well as ties to the Chinese military.
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