Huawei will build its first European manufacturing plant in France, the chairman said, as the Chinese telecom giant seeks to ease worldwide concerns stoked by US charges that Beijing could use its equipment for spying.

Huawei Technologies Chairman Liang Hua and President of Huawei’s Western European Region Li Peng attended a news conference in Paris on Wednesday.

Liang Hua said Huawei, the world’s biggest producer of telecoms equipment, would invest 200 million euros ($217 million) in the first phase of setting up the mobile base station plant. He said it would create 500 jobs.

Huawei, which denies its equipment poses a security risk, is at the centre of a storm pitting the United States against China over 5G, the next generation mobile technology. Europe has become a major battleground.

“This site will supply the entire European market, not just France’s,” Liang told a news conference. “Our group’s activities are worldwide and for this we need a global industrial footprint.”

5G technology is expected to deliver a huge leap in the speed and capacity of communications and an exponential spike in connections between the billions of devices, from smart fridges to driverless cars, that are expected to run on 5G networks.

It was not immediately clear whether Huawei’s decision had the blessing of French President Emmanuel Macron, who has courted foreign investors but also led warnings about Chinese encroachment into the European Union’s economy.

Liang said Huawei had outlined the group’s plan’s to the French government. “This is not a charm offensive,” he said.

There was no immediate reaction from Macron’s office.

Reuters