Canberra: Huawei ban won't hurt ties

PUBLISHED : Wednesday, 04 April, 2012, 12:00am
UPDATED : Wednesday, 04 April, 2012, 12:00am


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The Australian government does not expect its decision to ban Huawei Technologies from participating in a national telecommunications infrastructure project to put a big strain on relations with Beijing.

'I don't think it will be a significant impact,' Craig Emerson, minister for trade and competitiveness, said yesterday after delivering a speech on trade with China at the National Press Club in Canberra.

Emerson said investments in Australia by Huawei and other Chinese companies would still be welcome.

'No one is saying to Huawei 'don't invest in Australia'. We're just saying, 'in the National Broadband Network, that's a problem',' he said, according to Associated Press.

Shenzhen-based Huawei, China's largest telecommunications equipment manufacturer, was barred in December from bidding on work and contracts to supply equipment related to the A$36 billion (HK$290 billion) National Broadband Network, which will take three years to build.

Reports at the time said the government acted on the advice of the Australian Security Intelligence Organisation, which said Huawei's participation in the project was a national security risk based on cyberattacks that originated from China.

A Huawei spokesman said last month the company was ready to 'put in place any measures' to become a supplier to the government infrastructure project.

Despite the issue with Huawei, Emerson was positive about trade with China.

'China will be a big part of Australia's future success in creating more prosperity, and more and better jobs,' he said.

He said Australia aimed to accelerate its negotiations on a free-trade deal with Beijing, which he said would be discussed next week when Minister for Commerce Chen Deming visits the country.

China's ambassador to Australia, Chen Yuming, told the Sydney Morning Herald yesterday that the hope was that 'all Chinese companies - private or state-owned - will be able to have a fair and equitable environment for their operations here'.

Huawei established its business in Australia in June 2004, with its Sydney headquarters also serving as the centre of its operations in New Zealand and markets in the South Pacific.

David Kennedy, a principal analyst at research firm Ovum, said: 'Huawei really has no choice but to accept the decision by the Australian government.

'Huawei should certainly continue its efforts to build its reputation in Australia, but that alone is unlikely to effect a change.

'The company has suggested that it may still be able to supply less critical parts of the network. This is a sensible approach.'

The setback in Australia was the latest blemish on the international expansion plans of Huawei, which is the world's second-biggest telecommunications equipment supplier behind Sweden's Ericsson.

The United States Department of Commerce last year gave national security risk as the reason for blocking Huawei's involvement in interoperability trials of high-speed 4G mobile systems meant for US public safety networks.

Huawei also failed in 2010 to supply telecommunications equipment to Sprint Nextel, the third-biggest wireless network operator in the US, because of security concerns.

For the same reason, it failed to buy the US companies 3Leaf Systems and 3Com.