Huawei NBN rejection about ideology, not security

SYDNEY - The Australian government's rejection of Huawei's bid to take part in the rollout of the National Broadband Network was probably based on their Chinese ideology rather than security concerns, a Chinese counselor has suggested.

Speaking at the Sydney China Business Forum on Tuesday, Ling Guiru, counselor of the Consulate-General of China in Sydney, said: "The Australian government gave security as their reason, but this means that no other foreign companies should have been involved."

"If the Australian government allowed other companies from other countries to take part, why not from China? This is not a security reason, this is an ideological reason ?you're from China, so you're not as secure. This is what I understand."

Ling's statement echoes rumors that the ban was linked to the company's Chinese origins, which have persisted since the government's decision in March earlier in 2012.

Huawei Technologies Co Ltd is a Chinese multinational networking and telecommunications equipment and services company headquartered in Shenzhen of Guangdong province, south China.

But Peter Rowe, head of the North Asia Division of the Australian Department of Foreign Affairs and Trade, said this is not the case, and that the government was just being cautious about protecting one of its most important future assets.

"I think that no government is going to abdicate its responsibility to look closely at tenders for its most basic telecommunications network," said Rowe. "This is the backbone of our future communications system, and no government anywhere in the world is not going to look very closely at that situation. That's basically what happened with Huawei."

"It's not an indication of a more general look at all, it was just one particular case in a very sensitive area that every country in the world, including China, guards very closely," he reassured.

Professor Geoffrey Garret, dean of the University of Sydney Business School, said the government likely weighed up the pros and cons before reaching their decision.

"You'd probably want to balance areas in which Huawei's participation would have been extraordinarily cost-effective from the NBN standpoint, against some security concerns about information flows," he said.

"A potentially more fruitful way to go would have been to think about taking advantage of the fact that Huawei is a low-cost, high- quality provider, and to involve it in the NBN in areas where general and national security concerns weren't an issue," he added.

The controversy comes at a time when Australia and China are exploring better ways to do business in the 21st century. In April the two countries signed an historic Memorandum of Understanding to strengthen cooperation on delivering infrastructure.

Although Huawei wasn't able to be part of the NBN, other infrastructure projects may provide a better chance for Australia and China to work together, said Garret.

"Ask anybody in the world, what is China a world leader at, the answer is infrastructure. Ask anyone what one of Australia's top challenges is, the answer is infrastructure," he said. "There's surely a relationship there that will work extremely well."

Counselor Ling also agreed that there is great potential for Chinese investment in Australian transport, particularly for the mining industry. "After several years of being here, (Chinese companies) realize that railways and highways are very important to the nation and also to their business here," he said.

"Chinese investors realize that it's a necessity, and time for them to come invest in these areas. We'll have a win-win cooperation," Ling said.