Germany is not ready to exclude Huawei from its 5G network and may amend its laws so that potentially untrustworthy manufacturers can still provide equipment, its interior ministry told CNBC Tuesday.
In an emailed statement, a spokesperson for the Federal Interior Ministry — known as the BMI — said it was looking to adapt telecom networks to prepare for "new potential threats."
"A direct exclusion of a particular 5G manufacturer is currently not legally possible and not planned," he said, according to a CNBC translation of the statement. "For the BMI, the focus is on adapting the necessary security requirements so that the security of these networks will be guaranteed even if there are potentially untrustworthy manufacturers on the market."
The spokesperson added that necessary security requirements would be added to Germany's Telecommunications Act. Concrete adjustments are being discussed between the relevant federal ministries, he said, but no changes had been finalized.
Allowing Huawei to participate in its 5G network would come as a blow to the U.S., which has been working to persuade its allies to shut the Chinese telecoms firm out of their domestic infrastructure. The company has been blocked from selling equipment to the U.S. for many years, and President Donald Trump is reportedly expected to ban all Chinese telecoms equipment from U.S. networks.
Other countries, including Australia, New Zealand and Japan, have also excluded Huawei from supplying components for 5G networks, citing national security concerns.
However, those bans could be set to topple. On Monday, the Financial Times reported that Britain's intelligence services had concluded risks posed by Huawei 5G equipment could be mitigated. Meanwhile, New Zealand's Prime Minister Jacinda Ardern told broadcaster TVNZ on Monday that Huawei could be included in the nation's 5G network if it could mitigate security concerns raised by the government.
Earlier on Tuesday, the Wall Street Journal reported that Germany was leaning toward including Huawei in its 5G network, citing government sources. German Economy Minister Peter Altmaier reaffirmed at a press conference on Tuesday that the government was still working on regulation around 5G security measures, adding that no decisions had been made.
Huawei has repeatedly denied claims that the Chinese government would be able to spy on other nations if the firm was placed within international 5G infrastructure.
The company was not immediately available for comment when contacted by CNBC, but Dennis Zuo, head of Huawei's operations in Germany, told the Handelsblatt newspaper on Tuesday that Chinese espionage through its 5G equipment was not possible.
"The state does not have a stake in Huawei and it keeps out of our business," he said.
Meanwhile, Huawei founder and chief executive Ren Zhengfei told the BBC on Tuesday there was "no way the U.S. can crush us."
"The world cannot leave us because we are more advanced. Even if they persuade more countries not to use us temporarily, we can always scale things down a bit," he said.
Superfast 5G mobile internet is expected to revolutionize the digital economy by enabling new technologies such as self-driving cars and the internet of things. But it's also been pitched as a battle for dominance between the U.S. and China.
On Sunday, a former U.S. national security advisor told CNBC that America is lagging behind China in promoting its 5G technologies across the world.
"In the marketing of it we are behind," General James Jones told CNBC's Hadley Gamble. "You can either go for the cheap, seductive but extremely vulnerable system that will take all of your privacy, your intellectual property and your secrets back to Beijing. Or you can invest a little bit more money and have a more secure society," he said.