BEIJING — The fog of cyberespionage concerns surrounding Huawei has for years kept the Chinese technology giant largely out of the United States.
Now it has cost the company potentially lucrative business in another country: Australia.Huawei said on Thursday that the Australian government had barred it and another Chinese company, ZTE, from providing equipment to support the country’s new telecommunications networks. Mobile carriers around the world have been preparing to build infrastructure using fifth-generation, or 5G, wireless technology, which promises to enable the ultrafast communications necessary for technologies such as self-driving cars.
On Twitter, Huawei called the decision an “extremely disappointing result for consumers.” In a statement, the company said it “will continue to engage with the Australian government, and in accordance with Australian law and relevant international conventions, we will take all possible measures to protect our legal rights and interests.”
A ZTE spokeswoman declined to comment.Huawei, one of the world’s largest makers of telecom gear and smartphones, already sells equipment to major Australian telecom carriers. The company wrote to Australian lawmakers recently, arguing that concerns that its gear could be used by the Chinese government for spying were “ill informed and not based on facts.”But in a statement on Thursday, two Australian ministers indicated that the government would move to exclude certain equipment vendors from the nation’s 5G networks.
Companies that “are likely to be subject to extrajudicial directions from a foreign government” pose unacceptable security risks, the ministers said.One of those ministers, Scott Morrison, is challenging Australia’s prime minister, Malcolm Turnbull, for leadership of the country.
Neither Huawei nor ZTE was specifically named in the Australian statement. But the two companies’ ties to Beijing have long been cited by United States officials to justify keeping them out of American mobile networks.Huawei has said repeatedly that it is a private company owned by its employees, and that it obeys the law wherever it operates. Still, large American wireless carriers have for years shunned both its and ZTE’s equipment.
With such concerns about Chinese technology continuing to spread globally, it seems increasingly unlikely that the tech cold war between China and the United States will be reconciled quickly.More and more, the two economic powerhouses view the race to develop key technologies, 5G wireless included, in strategic as well as commercial terms. Both have stood up for their own national tech champions.
And they have each sought to kneecap the other’s.ZTE was nearly driven out of business this year after the United States Department of Commerce barred American firms from selling components to the company. The sanctions, imposed as punishment for illegal sales made by ZTE in Iran and North Korea, were later lifted to help defuse tensions between President Trump and China’s leader, Xi Jinping.Even Chinese firms’ research partnerships with universities in the United States and Canada have come under scrutiny.