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Huawei and the NBN: Good reason to draw the line

By Chris Lewis - posted Wednesday, 28 March 2012

Why such concern about the Australian government accepting the advice of the Australian Security Intelligence Organisation to ban the Chinese equipment maker Huawei Technologies from being a supplier to the $36 billion national broadband network?

Is this not a straight-forward case where the Australian government, listening to the expert advice of its national security organisation, makes a sensible decision based on the most recent evidence?

While the decision means possible ramifications from China, it is indeed time for Australia to express solid support for the U.S. rather than merely accepting the rise and rise authoritarian China. Any suggestion that such a Chinese corporation offers no threat is indeed the stuff of fairyland.


This is despite Huawei already having deals with offshore companies in the U.S., France and Australia via Optus and Vodafone. Huawei’s global head of cyber security is John Suffolk, the former U.K. government chief information officer. Huawei is already a supplier to the U.K.’s national broadband network.

It is argued that Chinese investment in the NBN is over-stated because it is limited to residential and small business access Layer 1/2 infrastructure and “will not be used for the mission critical functions of defence, law enforcement, national security intelligence or the inner core functions of government”.

And with the U.K. and New Zealand not sharing such concern about involvement by Huawei, with Huawei already contracted to build the Australia-N.Z. cable, reports suggests supposed security certainty because Australia’s former foreign minister Alexander Downer and retired Navy rear admiral John Lord are on Huawei’s board.

But should the same reporting downplay possible risks given that Huawei’s CEO is an ex-PLA officer, and its chairwoman was a former employee of the communications department of the Ministry of State Security.

Sure, it can be argued that Huawei has never proven guilty of any cyber-crime, and that the head of its public affairs told the Australian Financial Review that it was happy to have its equipment independently audited. Huawei, in the past, has even offered to share the source code of its network equipment to allay security fears.

But in a world where governments are increasingly messing with the critical infrastructure of other governments, Australia rightfully has a close strategic and political ally with the U.S. for good reason. I, for one, hope it stays that way.  


Concern about Chinese cyber-attacks and its use of information has been evident for several years. During April 2010, a report titled Shadows in the Cloud by Canadian and U.S. researchers, found extensive online espionage based in China by using Google groups, e-mail and Twitter and other methods to extract highly sensitive data from computers around the world. While the report was careful not to blame the Chinese government, some 1,300 infected computers in 103 countries were linked to servers in China and collected information on the Dalai Lama, military projects in India, and sensitive data from 16 countries, such as visa applications by Canadian citizens.

In February 2011, China was suspected of conducting hacking attacks on the websites of a number of oil and gas giants. According to the U.S. security company McAfee, China was suspected of covert and targeted cyberattacks against global oil, energy and petrochemical companies from November 2009. The continuing attacks, which McAfee titled ‘Night Dragon’, were reported to have gained sensitive competitive proprietary information on operations and project-financing administration regarding oil and gas field bids in the Middle East.

In October 2011, the U.S. government actually named China. A report from the Office of the National Counterintelligence Executive, after a two-year study by 13 government agencies, accused China of gathering American trade secrets by “using removable media devices and e-mail.” While Russia was also named, of the seven cases that went before U.S. courts under the Economic Espionage Act in 2010, six involved links to China. They included: “David Yen Lee, a chemist at Valspar Corporation (VAL), a Minneapolis-based manufacturer, used his access to international computer networks to download about 160 secret formulas for the paints and coatings Valspar produces. He was arrested in March 2009 and sentenced a year later to 15 months in prison. Meng Hong, also as a chemist, worked at DuPont and downloaded data on organic light-emitting diodes that he intended to transfer to Beijing University. He pled guilty last year and is now also serving a 15-month prison sentence. Yu Xiang Dong was a product manager at Ford (F) in China and copied about 4,000 documents onto a hard drive to help him get a job with a Chinese carmaker. He also pleaded guilty and was sentenced last April to 70 months in prison”.

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About the Author

Chris Lewis, who completed a First Class Honours degree and PhD (Commonwealth scholarship) at Monash University, has an interest in all economic, social and environmental issues, but believes that the struggle for the ‘right’ policy mix remains an elusive goal in such a complex and competitive world.

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