Tension Grows Over Australia’s Rejection of Chinese Tech Giant

March 29, 2012 Updated: October 1, 2015
Epoch Times Photo
The head office of Chinese telecom giant Huawei in Shenzhen, on Feb. 21, 2011. (STR/AFP/Getty Images)

A diplomatic row is growing in Australia after the Prime Minister Julia Gillard rejected Chinese technology giant Huawei’s bid to tender for the National Broadband Network (NBN) scheme, which has promised internet to over 90 per cent of households in Australia.

Huawei Technologies, a company that has been shrouded in secrecy even in China, was banned from supplying equipment for the $36 million NBN project over concerns of cyber security.

The Australian Financial Review reported on Monday that ASIO advice provided the basis for the ban.

A spokesman for Attorney-General Nicola Roxon told AAP the NBN was the “backbone of Australia’s information infrastructure” and as such the government had a responsibility “to do our utmost to protect its integrity and that of the information carried on it.”

Prime Minister Gillard defended her decision to bar Huawei from entering Australia on Thursday.
“The decision we have taken is not in breach of any trade rules or trade regulations with China.”

Gillard told reporters in Sydney, according to Bloomberg. “We’ve taken it for the right reasons, through the right process, based on the right advice.”

Huawei has insisted it will comply with all security checks and will open up its code. It says the company has provided similar technology for broadband service in the UK and Singapore.

Consulate General in Sydney has insisted “Australia will take positive measures and create a fair and non-discriminatory market environment for Chinese enterprises,” according the Business Spectator.

This was the second ban Huawei received in six months in Australia. In October last year it was told that bidding for the NBN was off the table. Huawei has also been blacklisted in the US over cyber security fears.

The Australian NBN network would provide fibre-optic access to about 3.5 million premises in Australia by mid-2015, Gillard said. The NBN plans to roll out fibre to 93 per cent of Australia’s population during the next decade, with the rest served by wireless and satellite.

The Australian ban adds to political woes for Huawei, the world’s second largest vendor of phone network equipment with US$32bil in sales last year.

The technology giant employs 140,000 staff, with almost half dedicated to research and development. It sells everything from mobile mast radios to software, data-centres and laptop dongles

Huawei is headed by a former Red Army engineer, Ren Zhengfei and has been accused of having links to China’s military—the claim it denies.

Huawei is not listed on the Hong Kong stock exchange, unlike other Chinese IT firms, such as the PC maker Lenovo. It has been under a shadow of secrecy since its founding in the 1980s, when China first started to emerge with its “opening up” policy. The names of its board members were only published for the first time last year.

Cyber Security

China has notoriously been involved in cyber attacks on Government websites in the US, stealing billions of dollars worth of sensitive information, technology developments and intellectual property data.

Last year the Australian Parliament system was also compromised, with MP’s emails hacked and information possibly stolen. The hackers were traced to China.

In 2010 two sophisticated attacks against Google’s systems stole some of the internet giant’s program code. The violation also hacked into G-mail accounts of hundreds of people, including senior US government officials, military personnel and political activists.

This month a congressional report in the US on cyber security has stated that Beijing can “pose genuine risk to U.S. military operations in the event of a conflict,” just as the country prepared to pass a major cyber-security legislation.