China is restricting the use of European telecom equipment in its networks, targeting suppliers such as Nokia and Ericsson, as President Xi Jinping accelerates efforts to decouple the country’s critical technology infrastructure from Western influence, the Financial Times reports.
State-backed buyers of IT equipment, including mobile operators, utilities, and other key industries, are now required to submit contracts for “black box” national security reviews conducted by the Cyberspace Administration of China (CAC). These audits, where the companies are not informed how their equipment is assessed, can last three months or longer and often leave European firms at a disadvantage compared with Chinese competitors.
“If China is doing this for national security reasons, the question is why Europe does not reciprocate by applying the same standard,” said a source familiar with the process, speaking anonymously.
The push to curb European vendors follows a similar trend in Europe, where some governments have warned against using Chinese telecom giants Huawei and ZTE. But in contrast to Europe, China’s restrictions have significantly eroded the market presence of European suppliers. Ericsson and Nokia’s combined market share in China’s mobile networks fell to about 4% in 2024, down from 12% in 2020, according to analyst Stefan Pongratz at Dell’Oro Group.
Both companies have reported declining revenues in China, with Nokia’s in-country revenues falling by double-digit percentages from 2023. Sources noted that even the small market share European firms manage to capture is often later shifted to Chinese vendors due to the slow and uncertain approval process.
The European Union Chamber of Commerce in China has warned that these localisation requirements pose an “existential threat” to European tech groups, with nearly three-quarters of respondents in a recent survey saying the rules have caused them to lose business.
While European policymakers have raised security concerns about potential espionage and backdoor access through Chinese equipment, only a minority of EU countries have introduced bans. As of June 2025, just 10 of the bloc’s 27 members had imposed restrictions, even though Huawei and ZTE continue to hold 30–35% of the European mobile infrastructure market.
Germany, for example, sources 59% of its installed 5G equipment from Chinese firms, despite plans to phase out high-risk suppliers by 2029, according to John Strand of Strand Consult. “All the mobile network equipment in Berlin is Chinese. Germany has big industries like chemicals and cars that don’t want relations with China to be hurt,” he said.
Ericsson and Nokia declined to comment on the latest restrictions, and the CAC did not respond to a request for comment.
