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Huawei Gets Planning Approval for $1.2 Billion U.K. R&D Site

Bloomberg logo Bloomberg 6/25/2020 Thomas Seal

(Bloomberg) -- Huawei Technologies Co has received approval to break ground on a 1 billion pound ($1.2 billion) research and development site near Cambridge in the east of England, even as the company’s future in the country hangs in the balance.

The Chinese telecommunications giant received planning permission on Thursday from South Cambridgeshire District Council to build the first phase of a major development that has come under criticism from U.K. and U.S. lawmakers. The site was acquired in 2018 and will support 400 jobs across 50,000 square meters of facilities, according to a statement from the company.

It will become Huawei’s international headquarters for optoelectronics - a branch of fiber-optic broadband technology - said Vice President Victor Zhang on a media call.

Huawei’s future in the U.K. is in question after the U.S. ratcheted up pressure on its allies to break ties with the Shenzhen-based supplier and imposed sanctions that may threaten its silicon supply.

Britain’s National Cyber Security Centre is due to issue a reviewed decision on Huawei’s role in the country’s networks.

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The review paves the way for a potential U-turn by Prime Minister Boris Johnson, who in January approved Huawei as a supplier of 5G and fiber-optic components. That sparked a rebellion in his party and an angry phone call from U.S. President Donald Trump.

The council vote on Thursday was purely on planning policy and did not take into account politics or security. To veto the investment on those grounds would require a decision by central government. Zhang said plans for the site were put in motion in 2017.

“Huawei could not have predicted the timing of today’s approval,” he said.

Still, former Conservative party leader Iain Duncan Smith, one of the lawmakers pushing for Huawei to be banned entirely from the U.K., criticized the council’s move.

“It is a naive and stupid decision, because it runs in the face of all of the evidence of the misbehavior by Huawei and the Chinese government,” he said via phone. “Huawei is an untrusted vendor and it’s clear South Cambridgeshire council have gone for the money.”

(Updates with comments from Huawei vice president from third paragraph)

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