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Japan govt to halt buying Huawei, ZTE equipment - sources

Reuters  |  TOKYO 

By Yoshiyasu and Takemoto

TOKYO (Reuters) - plans to ban government purchases of equipment from China's and to beef up its defences against intelligence leaks and cyber attacks, sources told

Chinese tech companies are under intense scrutiny from and some prominent allies over ties to the Chinese government, driven by concerns they could be used by for spying.

A government ban in will come after Huawei has already been locked out of the U.S. market and after and have blocked it from building Huawei has repeatedly insisted has no influence over it.

The Yomiuri newspaper, which first reported the of Japan's planned ban earlier on Friday, said the government was expected to revise its internal rules on procurement as early as Monday.

The government does not plan to specifically name Huawei and ZTE in the revision, but will put in place measures aimed at strengthening security that apply to the companies, a person with direct knowledge and a person briefed on the matter said.

Japan's chief government spokesman, Yoshihide Suga, declined to comment. But he noted that the country has been in close communication with the on a wide range of areas, including cybersecurity.

"Cybersecurity is becoming an important issue in Japan," he told a regular conference. "We'll take firm measures looking at it from a variety of perspectives."

ZTE declined to comment. Huawei did not immediately comment.

Chinese expressed "serious concern" about the reports.

The essence of China-business and economic cooperation is mutual benefit and win win, and both companies have legally operated in Japan for a long time, he told a daily briefing in

"We hope the Japanese side can provide a fair competition environment for Chinese companies operating in Japan and not do anything to harm bilateral cooperation and mutual trust."

Huawei supplies some network equipment to private Japanese telcos and Corp.

And Group Corp has a long relationship with Huawei - which in 2011 became the first Chinese firm to join Japan's conservative business lobby - and has partnered with it on 5G trials.

"The government will not buy where there are security concerns but it is difficult to restrict procurement by private companies," one of the sources said.

Docomo and did not immediately respond to a request for comment.

"While closely observing changes we will consider appropriate steps," a said.

Some private companies elsewhere, though, have distanced themselves from the Chinese firms.

In the United States, SoftBank's said it no longer from Huawei or ZTE. is trying to complete the unit's sale to

And Britain's said on Wednesday it was removing Huawei's equipment from the core of its existing and 4G mobile operations and would not use the company in central parts of the next network.

ZTE's Shenzhen-listed shares rose 0.5 percent on Friday after sliding 5.7 percent the previous day amid a global stocks sell-off sparked by the arrest in of Huawei's top at the behest of the Huawei is unlisted.

(Reporting by Yoshiyasu and Takemoto; Additional reporting by and Sijia Jiang, and in Beijing; Writing by and Chris Gallagher; Editing by and Muralikumar Anantharaman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, December 07 2018. 14:04 IST