Australia says Huawei ban doesn't change rules

Published April 3, 2012 5:18AM (EDT)

CANBERRA, Australia (AP) — An Australian government ban on Chinese technology giant Huawei working on a national broadband network does not herald new rules on Chinese investment in Australia, Trade Minister Craig Emerson said Tuesday.

Australia remains open to Chinese investment, Emerson told the National Press Club. He said the current government, since coming to power in 2007, had approved all 350 foreign investment applications from China, although conditions were placed on six of those applications.

"My instinctive response ... is not to try to set up a whole set of new rules for these things," Emerson said.

He said the government had acted on advice in the national interest late last year when it told Huawei Technologies Ltd. it was barred from bidding for work on the 36 billion Australian dollar ($38 billion) fiber-optic network.

Australian media have reported that the decision was prompted by Australian intelligence officials who cited hacking attacks traced to China, but the government has not made public its reasons.

"No one is saying to Huawei don't invest in Australia. We're just saying in the National Broadband Network, that's a problem," Emerson said.

"Sometimes you have to make these decisions and this doesn't in any way reflect on the overall relationship" with China, he said.

Emerson said he did not expect the decision would have a "significant impact" on relations with China.

In a sign that there is no serious rift, Chinese Commerce Minister Chen Deming plans to visit Australia next week to discuss negotiations on a free trade deal that has dragged on since 2005.

Emerson said he did not want a few sticking points to prevent a valuable deal from being sealed.

Chinese demand for iron ore and other minerals has driven an Australian economic boom but Canberra is uneasy about Beijing's rising military spending and growing assertiveness in Asia.

The United States and Australia announced plans in September to include cyber security in their 61-year-old defense alliance, the first time Washington has done that with a partner outside NATO.

China's Foreign Ministry last week responded to Huawei's ban by urging Australia not to discriminate against Chinese companies.

Huawei, which unlike many big Chinese companies is not state owned, has rejected suggestions it might be a security risk and said it has won the trust of global telecommunications companies.

After news of the ban became public last week, Huawei took the unprecedented step of raising its public profile by sponsoring a Canberra-based rugby league football team. It is the first time Huawei has ever sponsored a football team anywhere in the world.

By Salon Staff

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