China's ambassador to Denmark has pressured the Faroe Islands to hire telecommunications giant Huawei to build a 5G network, the daily Berlingske said Wednesday.
The United States has pressured Europe to exclude Huawei from tenders for 5G networks because it says the company could serve as cover for Chinese espionage.
Huawei and Beijing reject the accusations, and Huawei says it is a private company that is wholly owned by employees.
Berlingske reported that during a meeting with officials on the Faroe Islands, a self-governing territory in the North Atlantic that belongs to Denmark, the Chinese envoy held out a big carrot in the event that Huawei won a 5G contract.
"Ambassador Feng Tie made it clear .... that if the Faroese telecoms operator Foroya Tele agreed to let Huawei build the 5G network, all doors would be open to a free trade agreement between China and the Faroe Islands," the newspaper said.
It described the diplomat as being "very forceful" based on a surreptitious recording by local media group KVF of a meeting in November with the island's trade minister and an aide.
Berlingske said "it is the first time that the Chinese government has conditioned access to the huge Chinese market on the granting to Huawei of a 5G contract in Europe."
A Chinese foreign ministry spokeswoman denied any "pressure" on the island's government, but did say that safeguarding the legitimate rights and interests of Chinese companies is part of an ambassador's brief.
According to KVF, the Faroe Islands have begun to develop a 5G network in close collaboration with Huawei.
It quoted local trade minister Helgi Abrahamsen as saying: "We receive guidance from Danish national IT security authority Cyber Security, and they have so far not advised against collaborating with Huawei."
The rollout of 5G is proceeding in several countries with a promise of spurring innovation in a variety of sectors.
The ultrafast connections could help in fields such as telemedicine, self-driving cars, and a variety of industrial applications, for example.
When contacted by AFP, the Chinese embassy in Copenhagen, Huawei Denmark and the Faroe Island government were not available for comment.