Germany's Social Democrats (SPD) will decide on Tuesday whether to adopt a proposal that could ban Huawei from taking part in the rollout of its 5G infrastructure.
The outcome could place further pressure on the country's chancellor Angela Merkle who is caught between appeasing China and the US government.
Merkel's government is aiming to shore up the technical certification and scrutiny of telecoms equipment suppliers but has insisted that no country or vendor be excluded.
Critics of Merkle have suggested that her careful approach is due to a fear of Chinese retaliation against German companies that have heavily invested in its markets, according to Reuters. The Chancellor has been challenged by lawmakers in her own party as well as her SPD junior partners.
Last week SPD and conservative lawmakers agreed on a blueprint that would make it difficult for Huawei to take part in building Germany's 5G mobile infrastructure. The proposal states that suppliers from countries where "state influence without constitutional supervision, manipulation or espionage cannot be ruled out are categorically excluded from the network, both the core and peripheral", according to Reuters.
Accusations that Huawei is heavily linked to the Chinese government are well documented and are also believed to be the main reason why the company was blacklisted by the US government.
Speaking at an event hosted by business daily Handelsblatt, the Chinese ambassador to Germany, Ken Wu, said: "If Germany were to take a decision in the end that would exclude Huawei from the German market, then it should expect consequences."
"The Chinese government will not just stand by and watch. Look, 28 million cars were sold on the Chinese market last year, including seven million German cars. Could we say to one day that German cars are not safe - because we are capable of producing our own cars? No, this is pure protectionism."
IT Pro has approached Huawei for comment.
