As Nokia is closing its research hub in China; it is back to the time when Nokia CEO asked Europe: Why you use Huawei, while China has thrown us out

Nokia has confirmed it is winding down its radio technology research and development centre in Hangzhou by the end of 2026, cutting roughly 1,600 jobs and quietly closing the book on a China strategy that has been unravelling for the better part of a decade. Staff were told on Thursday, August 13. The company's explanation was clinical—it is aligning its China operations with how Nokia works globally, and its business there has been shrinking for years. Light Reading reports that Nokia sites in Beijing, Chengdu, Qingdao and Shanghai could follow, though the company hasn't confirmed that.What makes the timing interesting is the argument it revives. In September 2025, at a press conference in Oulu, Finland, Nokia CEO Justin Hotard asked Europe a question it still hasn't properly answered: "Why do we allow high-risk vendors in Europe in our networks," he said, when Nokia holds under 3% share in China? Nokia executives said at the time they had been told European vendors were to be pushed out of China on national security grounds. The Hangzhou shutdown is what that warning looks like on the ground.Nokia's China revenue has more than halved since 2018The numbers explain the exit better than any statement does. Nokia's Greater China sales fell from nearly €2.2 billion in 2018 to €913 million in 2025—a drop of more than 58%. The turn came in 2020, when Nokia lost out on key radio access network contracts with China Mobile, China Telecom and China Unicom. What looked like a product problem then looks structural now. Danish analyst John Strand put it flatly in January: "China is lost land for vendors like Ericsson and Nokia."Huawei still runs around 60% of Germany's 5G sitesHotard's complaint about asymmetry hasn't aged. Huawei accounts for roughly 59% of Germany's 5G radio sites, according to Strand Consult data cited by the country's interior ministry. Only 13 of the EU's 27 member states had fully or partly adopted the bloc's 5G security toolbox as of 2025. Brussels is now moving to make it mandatory—a shift Hotard called "a very good and important step" in January. Germany wants Chinese components in RAN networks down to 25% by October 1, 2026.Nokia's AI and cloud orders are booming as its RAN business shrinksThe retreat isn't cheap. Nokia raised its 2026 restructuring charge from €250 million to €800 million, with about €350 million tied to China and the integration of Nokia Shanghai Bell, which it bought out fully in December 2025. Headcount, around 103,000 in 2018, should end this year near 70,000.The other half of the story is happier. Second-quarter AI and cloud order intake hit €2.8 billion, up 105% year-on-year, and the stock is up 67% this year. Nokia is betting AI-RAN carries it into 6G. The catch: China is running 5G-Advanced across 330 cities, 12 to 18 months ahead of Western carriers, and Nokia will now build without that data.You use AI every day. Now get your AI Quotient. Take the AIQ test.