Daily Briefing Who’s afraid of Huawei? We are!

Insecure about security; banking on a merger; celebrating suffrage. Here's our Daily Briefing for January 17, 2019.
Quelle: Reuters
Berlin is figuring out how to handle Huawei.

Berlin is getting cold feet about China. Ministers are awkwardly trying to work out how to exclude Huawei from the companies bidding to build Germany’s 5G network. They’re apparently putting together tougher security prerequisites that Huawei couldn’t comply with in order to keep Beijing out. And if that doesn’t work, they’ll rewrite the telecommunications law.

That’s a step up from last year, but Washington has since told allies that Huawei is basically Beijing’s puppet, and could build back doors into its technology, opening up users to spying or even a cyberattack. Huawei (pronounced “wah-way”) denies everything.

5G is the latest generation of high-speed mobile transmission that will connect devices from the phone in your pocket to powerful industrial robots and self-driving cars. But Berlin is confounded because Huawei’s technology is cheap and innovative. Excluding Huawei could ramp up costs and slow down construction.

Smaller industry groups are heaving a sigh of relief that Berlin is finally listening. Berlin is in good company: From Australia to Norway, other governments have taken similar steps, citing security concerns. Meanwhile other companies have stopped waiting for Berlin and are planning on building their own 5G networks.

Beyond 5G, Germany is also weighing its broader handling of Beijing. Last week, BDI, an industry association, called on Berlin and Brussels to get real about the way China is distorting competition to get ahead of its trading partners, with methods from price dumping to technology transfer. Critics want tougher anti-dumping measures, tax credits for research and development, and better monitoring of Beijing’s state subsidies.

Still, politicians are wary of upsetting Germany’s most important trading partner – almost 1 million German jobs depend on exporting to China. Here, too, Berlin is caught between a rock and a hard place but at least politicians are acknowledging the rules have changed. Now, it’s time to play the long game.

Berlin’s also busy nudging ahead a merger of Deutsche Bank and Commerzbank to create a German banking champion rather than two minor-league players. Exploratory talks are underway, though regulators have mixed feelings. ECB supervisors say “aye” to consolidation in the sector but BaFin's president noted last fall that consolidation isn’t a cure-all. Others would rather see a tie-up with a bank from abroad such as UBS but Berlin doesn’t want to lose the HQ of a big bank to another country. It’s a never-ending story.

Handelsblatt Today's Allison is Deputy Editor-in-Chief. Quelle: Marko Priske für Handelsblatt
Allison Williams

Handelsblatt Today's Allison is Deputy Editor-in-Chief.

(Source: Marko Priske für Handelsblatt)

On Sunday, it’ll be 100 years since women in Germany first voted. They gained that right in November 1918, having fed their families, worked in factories and driven trams during the first World War, and after decades of activists’ campaigning. While I’m celebrating that progress with a dodgy-looking cake, there’s room for improvement in Germany today. The proportion of women in the Bundestag has been falling for several years and is now at 31 percent. Women are still paid less than their male peers. And Germany lags the US, UK and Sweden in terms of promoting women into management. But on the bright side, recruiters are betting this could be the year a woman leads a DAX company, with promising female executives at BASF, Deutsche Telekom, Deutsche Post and Siemens. The share of women on the non-executive boards of Germany’s top 200 firms was 27 percent in 2018, up 2 points from the year before. Here’s hoping.

If you want to receive the Daily Briefing in your inbox or subscribe to our other newsletters, please click here.