China’s reputation for cyber-espionage has cost the country’s largest network equipment manufacturer a shot at billions of dollars in infrastructure sales to Australia. The Australian government has moved to block Huawei from bidding on Australia’s approximately $36 billion-dollar National Broadband Network project.
The decision by Australia’s attorney general, reported March 26, was based on concerns raised by the Australian Security Intelligence Organization over the number of cyberattacks coming out of China, and that the company’s equipment would provide the Chinese government backdoors into the network. “The National Broadband Network is the largest nation-building project in Australian history,” a spokesperson for Australian Attorney General Nicola Roxon said in a statement, “and it will become the backbone of Australia’s information infrastructure. As such, and as a strategic and significant government investment, we have a responsibility to do our utmost to protect its integrity and that of the information carried on it.”
The Australian government has cause for concern. In 2011, the computers of Australian Prime Minister Julia Gillard and then-Foreign Minister Kevin Rudd were reportedly hacked by Chinese intelligence agents. And the US defense and intelligence community have continued to warn about China’s involvement in industrial espionage.
Huawei has been alleged to have benefitted from that espionage in past: Cisco accused the company of stealing technology from Cisco, but dropped its legal claims in 2004 after Huawei stopped producing a contested product. And the US Department of Defense expressed concerns about Huawei in a 2011 report to Congress (PDF) on Chinese military and security issues, because of the company’s close ties to the People’s Liberation Army.