Amid escalating geopolitical risks, the world’s second-largest telecommunications equipment manufacturer, Nokia, is intensifying efforts to reduce its supply chain exposure to China. This includes potentially cutting orders from non-Chinese companies listed in China.
According to a report from Nikkei Asia on Thursday, Nokia has reduced orders from its long-term supplier, Foxconn Industrial Internet (FII), in recent months. FII is a subsidiary of the Foxconn Group, based in Shenzhen, Guangdong Province, China, and listed on the Shanghai Stock Exchange in 2018.
The move by Nokia is seen as a response to Washington’s efforts urging allies to distance themselves from Chinese suppliers and capital, aiming to establish a “Clean Network.”
Since former President Trump’s administration, the U.S. has been advocating for the creation of a “Clean Network.” This initiative urges countries and companies to protect sensitive information from Chinese influence, particularly concerning telecommunications operators, cloud infrastructure, undersea cables, and mobile applications, among other critical information infrastructure.
Telecom equipment and networking devices have become a battleground in the U.S.-China tech war, as the information handled by these infrastructure and devices has significant implications for data and national security.
As a result, the U.S. and some European countries, including the U.K., are actively removing Chinese telecommunications equipment from their infrastructure, such as that provided by Huawei.
Insiders point out that Nokia’s reduced reliance on FII signifies an upgrading of the entire tech industry’s supply chain restructuring.
While there are no indications of any dissatisfaction from Nokia towards FII, the relationship between the two companies continues. FII has stated, “Cooperation with customers remains as before. Business operations of each department are progressing smoothly.”
Nokia has not directly commented on whether the decrease in orders from FII is due to Chinese capital involvement. Instead, Nokia emphasized its highly flexible global supply chain, which has been maintained and even expanded in diversity in recent years.
A senior executive familiar with the situation, cited by Nikkei Asia, mentioned that it is not just Nokia but also other telecom operators and equipment manufacturers asking for stricter requirements when placing orders, particularly concerning Chinese capital, suppliers based in China, and key components manufactured in China.
The executive further elaborated, stating, “The requests we receive are not limited to products headed to the U.S. but are also extending to products destined for the European market.”
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This article was originally published by 大紀元 on April 19, 2024.