huawei Marine’s acquisition of a Pacific Island cable and telecommunications company has raised concerns in the US and Australia because the Chinese company is required to co-operate with the Communist Party’s intelligence and security services over security threats posed by potential espionage.
Huawei Ocean bid at a low price
To improve the Pacific islands’ weak telecommunications infrastructure, an undersea cable is needed, a $72.6m project backed by the World Bank and the Asian Development Bank (ADB).
Undersea cables, with much more data capacity than satellites, have become a sensitive area of Pacific diplomacy, given their central role in international communications, according to NIKKEI Asia.
The Pacific islands have long been the backyard of Canberra and Washington. But as Beijing builds infrastructure locally, the U.S. and Australia find themselves competing for influence.
Huawei Ocean, spun off from Huawei technologies, submitted its bid with ASN, based in France, Nokia of Finland and NEC of Japan. While the project, known as the “East Micronesia Cable,” could be split apart, Huawei Marine’s bid was more than 20 percent lower than its rival’s in the procurement process, according to two sources.
According to the supervision terms of the development agency, Huawei Maritime is in a good position to win the bid based solely on cost considerations.
The project is further complicated by the planned connection to the Hantru-1 submarine cable, which is primarily used by the United States government and is located on Guam, a territory where the United States has substantial military assets.
Security issues
The US government has warned Pacific countries against using Huawei Technologies, which was spun off from Huawei Technologies and is now majority-owned by Shanghai Hengtong Optoelectronics Co LTD, to provide critical infrastructure.
Washington is responsible for the defense of the Federated States of Micronesia under the Treaty of Freedom Alliance, a decades-long agreement between the United States and its former Trust territory in the Pacific.
Washington sent a diplomatic note to the Federated States of Micronesia in July expressing strategic concerns about the project because Huawei Technologies Co. and other Chinese companies were required to cooperate with Beijing’s intelligence and security services, the sources said. Republican senators Ted Cruz and Marco Rubio told Micronesia in a letter dated September 18 that the Chinese Communist Party could use its access to the program to launch a “campaign of espionage and geopolitical coercion.”
It is reported that the bidding process for the project ended in May 2020 and the World Bank and THE Asian Development Bank are currently reviewing the bid evaluation report.
Australia has removed Huawei Technologies from an undersea cable project in the past. In 2018, Australia decided to fund the construction of an undersea cable between Sydney, Papua New Guinea and the Solomon Islands, excluding Huawei Ocean, which had already won an order from the Solomon Islands, and in October decided to join the United States and Japan in funding an undersea Internet cable to the Pacific island nation of Palau.
Australia argued at the time that the cable from Sydney, the landing point, could pose a future security risk if connected to Australia’s communications network.
Chinese firms peer into the Pacific Island handset business
According to Australian media reports, China Mobile is interested in acquiring the Pacific business of Digicel, a Jamaican company. Digicel is believed to control 90 per cent of the mobile market in Papua New Guinea and more than half in Vanuatu and Tonga. According to the Australian Financial Review, the Australian government is considering providing financial support to local bidders that have secured Digicel’s Pacific operations to prevent Chinese companies from acquiring the politically sensitive assets.
A Digicel spokesman confirmed to Nikkei that the telecoms company had received unsolicited inquiries about its Pacific operations. The spokesman declined to comment further because discussions with the parties were confidential.
The South Pacific island nations have become a front line in the struggle for dominance between China and the United States, with geopolitical significance for Washington and its ally Canberra.
Beijing held video conferences with 10 of the 14 island nations in the region at the end of November. Although the topic of the meeting was novel Coronavirus pandemic, a joint press release issued after the meeting included a China principle.
A Chinese company has signed a memorandum of understanding with Papua New Guinea’s fisheries minister to build a us $147 million “multi-functional fisheries industrial park”, the Guardian reported.
The proposed site for the facility is only about 200km from the Australian coast. There have been suggestions that China might build a port for the operation, which could further inflame tensions in the region.
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