US may create fund with Japan to oust China from 5G market

The US intends to involve Japan in creating a global fund designed to finance the development and distribution of fifth-generation (5G) communication systems to oust Chinese products from this market, Report informs referring to The Japan News.

The United States aims to form the coalition against China also with fellow nations of the so-called Five Eyes – the UK, Canada, Australia, New Zealand - the group of English-speaking countries that share intelligence.

The Multilateral Telecommunications Security Fund was included in the National Defense Authorization Act for fiscal 2021, from October 2020 through September 2021, enacted in early January.

The fund size will be determined in the future, but $500 million available for ten years was proposed in the US Congress.

There are growing security concerns, however, that 5G could be used for espionage and cyberterrorism. Hence, the United States and Britain are moving to eliminate their 5G networks companies from China, such as Huawei Technologies Co.

As each nation in Five Eyes begins to focus on looking for alternative suppliers to firms from China, relations with Japan are being strengthened, as Tokyo has close security ties with each and the country is home to manufacturers involved in telecommunications equipment such as NEC Corp. and Fujitsu Ltd.

Tokyo and Washington agreed to cooperate in diversifying the sources of their supplies for 5G equipment, with Japan-made products in mind, during a meeting of bureau chief-level government officials last fall.

In November, the British government announced that it would begin test runs for building a 5G communications network in cooperation with NEC.

Huawei Technologies is the global market leader related to communication base stations, including for 5G, with a 33 percent share, according to Omdia, a British research firm, while NEC and Fujitsu each have less than a 1 percent share.