China has identified the telecommunications sector as one of seven strategic industries to drive foreign trade. Yet the flood of unchecked cyber crime and espionage emanating from within its borders is making it difficult for companies to win business abroad
Huawei, the world’s second largest telecom equipment supplier, has been barred from Australia’s A$42bn tender to build a national broadband network. The government is concerned about alleged links to the Chinese government and its military. As in the US, where Huawei is practically excluded from doing business with the largest operators, Australia fears that allowing it into the national network would be to let Beijing eavesdrop on commercial and military secrets.
Huawei has worked hard to counter these fears. It has offered safeguards that western competitors strongly resist – such as handing over source codes. These have helped Huawei win contracts in broadband tenders around the world, including in the UK. The Australian knock-back is harder to take given that it had hoped to supply elements that were not obviously sensitive, such as passive optic technology.