China's envoy to Canada says that banning Huawei 5G would have repercussions

By Dale Smith

OTTAWA (Reuters) – China's envoy to Canada on Thursday warned Ottawa there would be repercussions if it banned technology company Huawei Technologies Co Ltd [HWT.UL] From the supply of equipment to the Canadian 5G networks, the latest outbreak in a deepening bilateral conflict.

Ambbadador Lu Shaye, speaking at a press conference, did not elaborate. Currently, Canada is studying the security implications of 5G networks, but unlike some allies, it has not announced that it will exclude the Huawei team.

"If the Canadian government bans Huawei from participating in the 5G network, then I'm not sure what kind of impact there will be, but I think there will be repercussions," Lu said through an interpreter, urging Ottawa to "make a wise decision on this matter".

Relations between China and Canada turned cold last month after Canadian authorities arrested Meng Wanzhou, Huawei's chief financial officer, in a request for extradition from the United States.

China later detained two Canadian citizens, and this month a court again tried a Canadian man who had previously been convicted of drug trafficking and sentenced him to death.

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

Lu said that when Canada's Foreign Minister, Chrystia Freeland, went to the World Economic Forum in Davos next week, she should avoid "microphone diplomacy" and not try to get support.

"If Canada has the sincerity to solve these problems, then Canada will not do those things, we hope that Canada will think twice before taking any action," he said.

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

"We will continue to talk with our allies about this situation every day," he told reporters on the sidelines of a cabinet retreat in Sherbrooke, Quebec.

She refused to give details about the revision in 5G technology. A Canadian source directly familiar with the case said the study would not be published in the immediate future.

Huawei has a relatively small Canadian operation, which employs about 1,000 people. But the company said earlier this year that it had become the 25th largest research and development financier in Canada, thanks to partnerships with local universities.

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(Additional reporting by David Ljunggren, written by David Ljunggren, edited by Sonya Hepinstall, Leslie Adler and Tom Brown)

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