China to Sweden: drop Huawei ban, or face fallout

A day after Sweden banned Huawei from its 5G networks, comes the response from Beijing.

And a foreign ministry spokesman made it sound like a not-so-veiled threat:

"The Swedish side should, in an objective and fair way, correct the mistaken decision, and avoid bringing about negative impacts on business and trade between China and Sweden, and Swedish companies’ operations in China.”

Swedish regulators on Tuesday (October 20) banned the use of gear from Huawei and fellow Chinese firm ZTE.

The officials said that followed advice from the country’s armed forces and security service.

Now it’s local champion Ericsson that may have most to worry about.

The telecom gear maker has deals to supply all three of China’s main mobile networks.

Those could be in jeopardy if China retaliates.

On Wednesday (October 21) the firm reported better-than-expected operating earnings.

They jumped to about one billion dollars for the latest quarter, well above analyst expectations.

But the firm cited China’s 5G network rollout as the big driver for that.

Ericsson executives will be watching very closely to see what Beijing does next.

Video Transcript

- A day after Sweden banned Huawei from its 5G networks comes the response from Beijing. And a foreign ministry spokesman made it sound like a not so veiled threat.

- [SPEAKING CHINESE]

INTERPRETER: The Swedish side should, in an objective and fair way, correct the mistaken decision and avoid bringing about negative impacts on business and trade between China and Sweden and Swedish companies' operations in China.

- Swedish regulators on Tuesday banned the use of gear from Huawei and fellow Chinese firm ZTE. The official said that followed advice from the country's armed forces and security service. Now, it's local champion Ericsson that may have the most to worry about. The telecom gear maker has deals to supply all three of China's main mobile networks. Those agreements could be in jeopardy if China retaliates.

On Wednesday, the firm reported better than expected operating earnings. They jumped to about $1 billion for the latest quarter, well above analysts' expectations, but the firm cited China's 5G network rollout as the big driver for that. Ericsson executives will be watching very closely to see what Beijing does next.