January 17, 2019 / 8:30 PM / 9 months ago

UPDATE 3-China's envoy to Canada says Huawei 5G ban would have repercussions

(Adds quotes from Chinese ambassador, Canadian foreign minister, details)

By Dale Smith

OTTAWA, Jan 17 (Reuters) - China’s envoy to Canada on Thursday warned Ottawa there would be repercussions if it banned technology firm Huawei Technologies Co Ltd from supplying equipment to Canadian 5G networks, the latest blast in a deepening bilateral dispute.

Ambassador Lu Shaye, speaking at a news conference, did not give details. Canada is currently studying the security implications of 5G networks, but unlike some allies has not announced Huawei equipment will be excluded.

“If the Canadian government does ban Huawei from participating in the 5G network, then as for what kind of repercussion there will be, I’m not sure, but I believe there will be repercussions,” Lu said through an interpreter, urging Ottawa to “make a wise decision on this issue”.

Relations between China and Canada turned frosty last month after Canadian authorities arrested Meng Wanzhou, chief financial officer of Huawei, on a U.S. extradition request.

China subsequently detained two Canadian citizens, and this month a court retried a Canadian man who previously had been found guilty of drug smuggling, and sentenced him to death.

Prime Minister Justin Trudeau accused Beijing of arbitrarily using the death penalty and called world leaders to solicit their support.

Lu said when Canadian Foreign Minister Chrystia Freeland went to the World Economic Forum in Davos next week she should avoid “microphone diplomacy” and not try to rally support.

“If Canada has a sincerity of resolving these issues, then Canada will not do such things. We hope Canada thinks twice before making any actions,” he said.

In response, Freeland said Canada had no intention of changing its approach.

“We will continue to speak every day with our allies about this situation,” she told reporters on the sidelines of a cabinet retreat in Sherbrooke, Quebec.

She declined to give details about the review into 5G technology. A Canadian source directly familiar with the case said the study would not be released in the immediate future.

Huawei has a relatively small Canadian operation, employing just shy of 1,000 people. But the company said early this year it had become the 25th largest research and development funder in Canada, thanks to partnerships with local universities.

On Wednesday, a bipartisan group of U.S. lawmakers introduced bills that would ban the sale of U.S. chips or other components to Huawei, ZTE Corp or other Chinese firms that violate U.S. sanctions or export control laws.

Additional reporting by David Ljunggren; writing by David Ljunggren; editing by Sonya Hepinstall, Leslie Adler and Tom Brown

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