China’s 5G Technology in the NATO Alliance: A Case Study on Italy
Analysis by Meadow Fortier, THO Program Associate
The North Atlantic Treaty Organization (NATO) aims to modernize its security and defense strategies amidst the changing nature of global cooperation and defense. Pertinent to this modernization campaign is the challenge posed by China. While China poses a challenge in a myriad of ways, its competence and dominance in technology is undeniable and pressing. Its technological innovation has produced enumerable benefits, but the increasing claims of China using it as emerging and disruptive technologies (EDTs) against NATO members propels us to consider the real scope of its benefit and threat. The growing popularity of the Chinese company Huawei and its provision of fifth-generation (5G) technology throughout NATO member states serves as an example to assess China’s challenge and its use of EDTs.
Huawei is a private telecommunications company that supplies 5G infrastructure, or networks and devices with notably high rates and easy connections. Its international supply of 5G is part of a larger Chinese initiative known as the Belt and Road Initiative and its Digital Silk Road, a campaign other countries join to receive Chinese investments in infrastructure such as 5G, roads, oil pipelines, ect. Currently, 18 of 35 NATO countries have joined the BRI. These memberships have visibly led to the spread of Huawei’s 5G throughout NATO territories, with 28 of the 50 global Huawei commercial contracts signed with European countries. In fact, many European countries find it difficult not to engage with Huawei given its superior ability to meet the demand for 5G technology (1), as opposed to European 5G companies such as Nokia and Ericsson (2).
In the context of technological challenges posed by China, the concern over Huawei stems from its access to sensitive information and China’s 2017 National Intelligence Law. Passed two years after the launch of the Digital Silk Road and 5G infrastructure, the law grants the government power to “require relevant organs, organizations, and citizens to provide necessary support, assistance, and cooperation,” with state intelligence work. The government further incentivizes cooperation by granting itself the power to “reward individuals and organizations that contribute to national intelligence work,” (3). As a telecommunications company, Huawei can access a wide array of transactions and communication that could be relevant to a government’s security. Coupling the information Huawei has access to with China’s Intelligence Laws, a serious challenge arises for countries who become involved with the BRI. NATO allies have already attributed a wide number of intelligence-related EDT threats like cyber-attacks, intellectual property theft, and disinformation campaigns to actors based in China (4).
Aside from the PRC’s Intelligence Law, Huawei’s relationship with the BRI and its Digital Silk Road situates the company within a larger geopolitical struggle that inherently triggers security concerns. The BRI is arguably China’s attempt to translate its international economic influence into political influence (1), pulling any company apart of the initiative, such as Huawei, into to NATO’s radar. This speculation of the BRI’s geopolitical intentions is supported by the current nature of global competition and dominance, where power comes from non-traditional means like diplomatic and economic relations as opposed to traditional military strength. The NATO 2030 Reflection Group highlights China’s geopolitical tactics as they write how China is now “dedicating significant and increasing resources to this domain in effort to outpace the West” (4).
Italy and its engagement with Huawei provide an interesting case study to better understand China’s potential technological challenge to NATO. While countries such as France or Germany may offer interesting insight due to their overall larger economic relations with China, Italy is relevant in that it has the largest market for Huawei’s 5G (5) and is the only G7 country to officially join the BRI. In other words, the fact that it is a core NATO member with not only economic but BRI-based diplomatic ties lends a geopolitical lens to observe the potentially negative intentions behind Huawei’s 5G. The limits of this assessment should be made clear, in that Italy’s relationship with Huawei is only judged upon publicly available information.
When observing the initial development of Huawei in Italy, it looks strong and widespread. After Italy officially joined China’s BRI in 2019, the Huawei Italian CEO Thomas Miao revealed the tech company will invest more than $3.1 billion in Italy over the next three years. By 2020, Italy was the largest market in pursuit of Huawei’s supply of 5G technology and infrastructure, with over 800 people employed for research and development alone (2).
However, when assessing Huawei involvement with Italy’s top five telecommunication companies, including Wind Tre, TIM, Vodafone, Iliad, and Mobile Virtual Networking Operators (MVNOs) such as Fastweb (6), its presence appears minimal. Because 5G is core to telecommunications, Huawei’s limited presence with Italy’s top five telecommunication companies suggests the country’s overall relationship with Huawei is not strong. Only Vodafone and Fastweb developed a relationship with Huawei, for example, but even these relationships were limited by Italy’s government (7). More specifically, Huawei was blocked from supplying either of the company’s core 5G networks that contain sensitive information. Italy’s sparse relationship with Huawei is reinforced by TIM’s initial cooperation that ended with it fully excluding the Chinese company from supplying any of its core 5G networks (8) and completely leaving it by 2020 (7). Illiad has never worked with Huawei to begin with, developing its own network in 2016 and acquiring its own 5G-enabling spectrum in 2018 (9).
Not only are the lack of Huawei suppliers in Italy’s telecommunication companies evidence for a minimalist relationship with Chinese 5G technology, the rhetoric of Italy’s Parliamentary Committee for Security of the Republic further pushes Italy away from Huawei’s 5G. The Committee urged the Italian government to exclude state-owned companies from Huawei’s 5G infrastructure (2).
Italy’s limited relationship with Huawei is further weakened by the recent European Union Recovery and Resilience Facility (RRF) “Italian Scheme,” a program for the deployment of 5G technology throughout Italy until June 30, 2026. Established in April of 2022, the European Commission writes how, “the scheme aims to ensure a wide availability of high-performing networks, capable of delivering high-quality and reliable electronic communication access to services to end-users, satisfying their current and evolving needs,” (10). Although this program will improve Italian technological independence, it was also arguably legislation aimed to limit the usage of Huawei without issuing a direct ban against the company (11).
Put simply, Italy and the EU’s RRF “Italian Scheme” has managed to publicly limit Huawei from supplying and accessing sensitive information without officially banning the company or severing BRI relations. While it is important to consider this assessment is derived only from publicly available information, it is clear Italy’s method differs starkly from other NATO countries, some of which have fully banned Huawei such as the US and UK, while others have developed substantive relationships, such as Hungary (12). Italy’s case study therefore offers interesting insight on “the middle ground” and how NATO can respond to China’s technological challenge, at least in the case of its leading 5G technology.
Rather than entirely ousting China, the case of Italy supports the possibility of creating a relationship with China but to limited capacities. Under this model, the Alliance can accept its members' relations with China, but create a universal set of limitations on the type of network Huawei’s 5G infrastructure supplies. Because a multitude of NATO members have already developed a strong relationship with Huawei (12), such as Hungary, aiming to completely rid NATO members from the tech company may be difficult and create backlash. By supporting this notion of limited relations, the alliance accommodates for a multitude of different national values and interests.
However, one could also argue the reason for Italy’s lack of involvement with Huawei was due to international cooperation and pressure. This was shown through the EU’s cooperation over the RRF “Italian Scheme.” Therefore, if the Alliance still aims to remove all Huawei 5G infrastructure, then it should supply similar initiatives, whereby NATO or EU funds facilitate the development of its own 5G networks. This would remove the dependence on Huawei while satisfying the demand for 5G infrastructure and devices.
The technological challenge posed by China maintains significant relevance to the NATO alliance. There have been undeniable advancements in China’s geopolitical power moves and their use of EDTs. The 2017 National Intelligence Law only exacerbates this concern. However, as a NATO ally and the only G7 country to join the BRI, Italy’s engagement with Huawei suggests the transatlantic community can adopt relationships with China while maintaining security measures and controls.
(1) Sullivan, Jake, and Hal Brands. “China Has Two Paths to Global Domination.” Carnegie EndowmentforInternationalPeace,May22,2020. https://carnegieendowment.org/2020/05/22/china-has-two-paths-to-global-domination-pub-81908.
(2) Maio, Giovanna. “PLAYING WITH FIRE: Italy, China, and Europe.” The New Geopolitics: Brookings Institution, May 2020. https://www.brookings.edu/wp-content/uploads/2020/05/FP_20200519_playing_with_fire.pdf.
(3) Sacks, David. “China’s Huawei Is Winning the 5G Race. Here’s What the United States Should Do To Respond.” Council on Foreign Relations (blog), March 29, 2021. https://www.cfr.org/blog/china-huawei-5g.
(4) “NATO 2030: United for a New Era.” Reflection Group: NATO, November 25, 2020. https://www.nato.int/nato_static_fl2014/assets/pdf/2020/12/pdf/201201-Reflection-Group-Final-Report-Uni.pdf.
(5) Coslml, Simone. “Huawei and Italy: ‘We Are the First Market in the World Excluding China.’” G Q Italia, February 27, 2018. https://www.gqitalia.it/gq-inc/economia/2018/02/27/huawei-e-litalia-siamo-il-primo-mercato-del-mondo-esclusa-la-cina.
(6) Statista. “Market Share of Mobile Network Providers in Italy 2020,” January 18, 2022. https://www.statista.com/statistics/548650/market-share-of-mobile-operator-revenue-in-italy/#:~:text=In%202020%2C%20three%20main%20players,4.8%20percent%20of%20the%20market.
(7) Pollina, Elvira, and Fonte Giuseppe. “Italy Gives Vodafone 5G Deal with Huawei Conditional Approval - Sources.” Reuters, May 31, 2021. https://www.reuters.com/technology/italy-gives-vodafone-5g-deal-with-huawei-conditional-approval-sources-2021-05-31/#.
(8) Pollina, Elvira. “Exclusive: TIM Excludes Huawei from 5G Core Equipment Tender.” Reuters, September 7, 2020. https://www.reuters.com/article/us-huawei-tech-5g-italy-brazil-exclusive/exclusive-tim-excludes-huawei-from-5g-core-equipment-tender-idUSKBN24A2AE.
(9) Anne, Morris. “Iliad Talks Italian 5G with WindTre.” Mobile World Live, March 22, 2022. https://www.mobileworldlive.com/featured-content/top-three/iliad-talks-italian-5g-with-windtre.
(10) European Commission. “State Aid: Commission Approves €2 Billion Italian Scheme under the Recovery and Resilience Facility to Support Roll out of 5G Mobile Networks.” April 25, 2022. https://ec.europa.eu/commission/presscorner/detail/en/IP_22_2644.
(11) Pollina, Elvira. “Italy’s New Rules on 5G Deals Risk Delays, Industry Lobby Warns.” Reuters, April 11, 2022. https://www.reuters.com/technology/italys-new-rules-5g-deals-risk-delays-industry-lobby-warns-2022-04-11/.
(12) Paszak, Pawel. “Huawei in Poland and Hungary. Could It Be a Part of 5G?” Warsaw Institute, December 30, 2020. https://warsawinstitute.org/huawei-poland-hungary-part-5g/.