Huawei Technologies will open a new information security lab in Germany next month that will enable source code reviews, in a step aimed at winning regulators' confidence before the country's 5G mobile spectrum auction.
The move follows Australia's decision to ban Huawei from supplying 5G equipment over concerns it could facilitate Chinese spying, and its barring from some US government contracts on national security grounds.
Germany, which lacks a telecoms hardware industry of its own, is keener to maintain its traditionally close trade and investment ties with Beijing without compromising on its own cyber-security, say officials.
The Federal Office for Information Security (BSI) said Huawei would open the lab on 16 November in Bonn, where the BSI and other key regulators are based.
Also headquartered in the former capital is Deutsche Telekom, the partly state-owned market leader that has close business ties with Huawei.
The lab would facilitate source-code reviews, a BSI official said. This entails examining the programming language used to run network gear, for example screening it for vulnerabilities such as 'back doors' that might allow spy agencies to gain covert access.
"We have to deal with the reality that there are few hardware manufacturers in Germany – they come from abroad," a BSI official told Reuters. "Based on this reality, we have to achieve the best level of security possible."
Huawei was among a group of telecoms providers and network equipment suppliers that took part in a workshop hosted by the BSI last week to address security in 5G networks that can enable connected factories, self-driving cars and telemedicine.
The company declined to comment on any cooperation with the German authorities, but said: "Information security is absolutely central to all we do."
"Long before the issues that have been raised in the US and Australia, and entirely independently, we have responded to the demands of customers by building the highest levels of security into our products and operations," a spokesman said.
"We rigorously test the cyber-security of our products against the highest global standards."
In Britain, Huawei is already subject to the scrutiny of an independent oversight board and set up a technology lab in 2010 to facilitate its work.
Huawei says no inspection has ever found any 'back doors' in the networks it has built, but the UK oversight board did recently fault technical and supply-chain shortcomings in its gear.
Additional reporting by Jack Stubbs. Editing by Adrian Croft