The United States has warned Pacific island countries to be wary of the security risks posed by Chinese companies bidding cheaply for undersea cables. The laying of submarine network cables is an international development project in the area.
In a report on Thursday (December 17), Reuters cited two people familiar with the project as saying the Chinese company in question was huawei Ocean Networks Co LTD (HUAWEI Ocean).
Huawei Ocean is part of a recent spin-off from Huawei technologies co., a Chinese network equipment company. The company’s biggest shareholder is Shanghai-listed Jiangsu Hengtong Optoelectronics Co., LTD.
Although Hyon Optoelectronics owns as much as 80 percent of Huawei Technologies Co LTD, the United States has warned the Pacific island nations not to allow Huawei Technologies Co LTD to participate in infrastructure construction of key parts of the project.
For the past two years, the U.S. government has been persuading its Western Allies to block Huawei from participating in the construction of their 5G networks to ensure western cybersecurity.
In July, the United States sent a diplomatic note to the Federated States of Micronesia expressing strategic concerns about the involvement of Huawei Technologies And other Chinese companies. The Chinese companies work with the country’s intelligence and security agencies.
Prior to the note, the US had warned development agencies of the Governments of Micronesia and Nauru of the risks posed by Huawei’s maritime involvement, the sources said. Nauru is a diplomatic ally of Taiwan.
The undersea cable project aims to improve communications between the region’s island nations of Nauru, the Federated States of Micronesia and Kiribati. The bidders for the project include China’s Huawei Ocean Networks, France’s ASN and Japan’s NEC Electric. The project, supported by the World Bank and the Asian Development Bank, is worth $72.6 million.
Sources said Huawei Ocean’s purchase price is more than 20% lower than that of its competitors. This gives the relevant countries a difficult problem: in terms of the price, Huawei Marine has an obvious advantage. But from a security perspective, huawei Ocean’s risks cannot be ignored.
In accordance with the procedure, recommendations are made by a tender evaluation committee and then considered by the relevant national development agency to ensure that bidders comply with the relevant agency’s policies and procedures.
In a statement, the Micronesian government said it was in communication with project partners, “some of whom have noted the need to ensure that the cables do not affect regional security issues.”
The United States assumes defense responsibility for Micronesia under a previous Compact of Free Association with its Trust territory in the Pacific.
A nauru government spokesman said bids were being reviewed and “technical and administrative issues” were being addressed to ensure the project went ahead. But he offered no further details.
The Kiribati government has not commented.
Undersea cables are better at transporting data than satellites, making them central to international communications between Countries in the Pacific and a sensitive area for diplomacy.
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