Will Sweden’s Huawei ban harm Sino-Swedish business?

COMMERCIAL TIES between Ericsson and China date back to the 1890s, when the Swedish company sold 2,000 telephones to Shanghai. It has been welcome in the Chinese market ever since, most recently selling speedy 5G telecoms gear. Now, fears Borje Ekholm, Ericsson’s boss, those bonds are in jeopardy, as a result of the Swedish government’s anti-Chinese turn.

After centuries of cordial relations—from the Swedish East India Company’s ships sailing between Gothenburg and Guangzhou in the 18th century to Sweden’s early recognition of the People’s Republic in 1950 and its blessing in 2010 of the Chinese takeover of Volvo, a much-loved carmaker—the mood has changed. Last October the Swedish telecoms regulator barred Huawei, Ericsson’s Chinese rival, from the country’s speedy 5G mobile networks, citing “theft of technology” by China. This month, after an auction of Sweden’s 5G radio spectrum that forbade the winners from using kit from Huawei and ZTE, another Chinese supplier, China’s commerce ministry hinted that the ban could compromise bilateral economic ties.

That would be bad news for Ericsson, which derives 13% of its revenues from China. It is the only foreign company that provides China with certain types of 5G kit—which China is well ahead of most other countries in installing, thanks to gargantuan sums channelled into...