Huawei Technologies has signed an agreement with Russian telecom company MTS to develop 5G networks in the country over the next year.

The deal was signed on Wednesday in Moscow, as Chinese President Xi Jinping and his Russian counterpart Vladimir Putin looked on. MTS said in a statement that it plans to work with Huawei on developing 5G technologies.

5G is a next-generation cellular network that offers faster data transfer speed and could enhance technologies such as autonomous driving, remote medical diagnosis and mobile payments.

Huawei has also signed a draft agreement with the African Union that includes cooperation in 5G communications.

China has been championing Huawei, the world's biggest telecoms gear provider, as a national star as it races to be a global leader in advanced wireless networks amid fierce rivalry from the United States.

Beijing's ambitions have faced a major challenge from Washington, which has blacklisted Huawei just as it seeks to provide equipment for 5G networks in several countries.

Commenting on the announcement, Huawei ─ which produces both network equipment and mobile phones ─ said it will “fully support” Chinese operators to build 5G infrastructure.

“(We) believe that in the near future, China's 5G will lead the world,” Huawei said on Weibo.

Another Chinese phone maker, Vivo, said its 5G devices are ready for network testing and will be on sale once trials are complete.

The administration of President Donald Trump banned US companies in May from selling high-tech components to Huawei on national security grounds, though a 90-day reprieve was issued.

Several firms have already distanced themselves from Huawei, including Google, whose Android operating system runs the vast majority of smartphones in the world.

The move led to an escalation in the US-China trade war, with Beijing preparing its own blacklist of “unreliable” foreign companies.

China's Commerce Ministry says it will release the list in the near future.

US companies will have to seek approval for sales to Huawei once the list takes effect.

China hasn't said what action it might take against the entities included on its list.

Since last year, 5G trials have been conducted in Chinese cities ahead of plans to deploy the technology across the country in 2020, and now the government has given the green light.

The Industry and Information Technology Ministry said state-owned telecom providers China Telecom, China Mobile, China Unicom and China Broadcasting Network Corporation received business licences to operate fifth-generation digital cellular mobile communication services.

“After the issuance of 5G licences, we will continue to welcome foreign companies to actively participate in China's 5G market, seek common development of China's 5G, and share the achievements of China's 5G development,” said Miao Wei, the minister of industry and information technology, according to the ministry's Twitter-like Weibo account.

China Mobile later said it would offer 5G services in 40 Chinese cities this year.

The United States has urged other countries to shun Huawei over concerns that its equipment could be used by Beijing's intelligence services.