- Associated Press - Monday, March 26, 2012

CANBERRA, AUSTRALIA (AP) - Australia has banned Chinese technology giant Huawei from bidding to help build a nationwide high-speed Internet network due to concern about cyber attacks traced to China.

Australian Prime Minister Julia Gillard said Monday the move was among “prudent decisions” to ensure the planned network functions properly.

The ban highlights concern about Beijing’s cyber warfare efforts, a spate of hacking attempts aimed at Western companies and the role of Chinese equipment providers, which are expanding abroad.

Huawei Technologies Ltd. is one of the world’s biggest producers of switching equipment that forms the heart of phone and data networks. The company rejected suggestions it might be a security risk and said it has won the trust of global telecoms carriers.

Beijing’s relations with Western governments have been strained by complaints about hacking traced to China and aimed at oil, technology and other companies. A U.S. congressional panel has said it will investigate whether allowing Huawei and other Chinese makers of telecoms gear to expand in the United States might aid Chinese spying.

The Australian attorney general’s office told Huawei late last year it would be barred from bidding for work on the 36 billion Australian dollar ($38 billion) network, according to The Australian Financial Review newspaper. It said that decision was prompted by Australian intelligence officials who cited hacking attacks traced to China.

A spokesman for the attorney general’s office said it could not comment on individual companies but a Huawei official confirmed the newspaper’s account. He spoke to The Associated Press on condition of anonymity because he was not authorized to disclose conversations between Huawei and the government.

Huawei expressed disappointment about the decision. It has operated in Australia since 2004 and said it already works with the country’s major telecoms carriers.

Huawei will continue to be open and transparent and work to find ways of providing assurance around the security of our technology,” said a company statement.

China is Australia’s biggest trading partner and Chinese demand for iron ore and other minerals has driven an Australian economic boom. But Canberra is uneasy about Beijing’s rising military spending and growing assertiveness in Asia.

The United States and Australia announced plans in September to include cyber security in their 61-year-old defense alliance, the first time Washington has done that with a partner outside NATO.

President Barack Obama announced plans in November to send U.S. military aircraft and up to 2,500 Marines to Australia’s north for a training hub to help allies and protect American interests across Asia.

Plans approved by Australian lawmakers in 2010 call for building a fiber-optic network to provide high-speed Internet access to 90 percent of the country’s homes.

Huawei said it is building similar networks in Britain, New Zealand, Singapore, Malaysia and other countries.

“You don’t get to that level of success unless you have customers that trust your company, your staff and your technology,” the statement said.

Story Continues →