China spy fears over Huawei Pacific Ocean cable

Chinese company Huawei’s involvement in a ­proposed undersea internet cable near Sydney has sparked fresh espionage ­concerns.

Russia's President Vladimir Putin and Meng Wanzhou, Executive Board Director of the Chinese technology giant Huawei, at a conference in 2014.

Chinese company Huawei’s involvement in a ­proposed undersea internet cable near Sydney has sparked fresh espionage ­concerns, as a US-led backlash against the telco escalated yesterday following the arrest of one of its top executives.

Huawei chief financial officer Meng Wanzhou was arrested in Canada, at the ­request of the US government, ­allegedly for ­sanction-busting ­behaviour towards Iran.

News of the arrest emerged as Western governments are increasingly locking Huawei out of critical 5G technology contracts and shunning its devices.

The Department of Foreign Affairs and Trade yesterday revealed it did not allow Huawei and ZTE-made devices to connect to its internal networks and Japan was reported to be preparing to ban the companies’ phones from all of its government departments. Australis and NEw Zealand have now effectively banned Huawei from their 5G networks while the US has been reportedly urging other Five Eyes countries to follow.

Experts say espionage fears could emerge over Huawei’s involvement in a plan to build a massive undersea internet cable stretching from South America to China with a stop-off in Sydney.

The Chilean government has approached Canberra for advice on what it would need to do to proceed with the project, where one of three proposed routes would bypass Sydney. Australia played a leading role in kyboshing a proposed cable built by Huawei from the Solomon Islands and PNG to Australia.

Fergus Hanson, the head of the International Cyber Policy Centre at the Australian Strategic Policy Institute, said authorities may be concerned that Australian internet traffic could be surveilled through cables if they link up with local networks.

The arrest of Ms Meng sparked protests from China.

“We have made solemn representations to Canada and the US, demanding that both parties immediately clarify the reasons for the detention, and immediately release the detainee to protect the person’s legal rights,’’ a Chinese government spokesman said. Ms Meng is the daughter of Huawei founder Ren Zhengfei, a former senior officer in the ­People’s ­Liberation Army and a well-connected member of China’s political and business establishment.

Her arrest sets the stage for a fresh outbreak of trade hostilities between China and the US, and has stoked that fears Huawei may retaliate by detaining US telco ­executives travelling in China. It also brings to a head long-running disputes about Huawei’s role in Western telecommunications networks as well as a larger commercial contest between Washington and Beijing for supremacy in the tech market.

Last month, The Weekend ­Australian reported intelligence reports showed Huawei ­exec­utives had supplied network codes to Chinese espionage services in an attempt to hack into an overseas network.

It was the first confirmed instance of the Chinese government using its leverage over the company to obtain information.

Huawei has consistently denied involvement in espionage and a spokesman for the company said yesterday its phones were “as safe and secure as anyone else’s’’.

“In fact, our phones’ operating system is Google Android,” the spokesman said.

“All major smartphones are manufactured in China and share the same global supply chain.”

The spokesman said that in the company’s 30-year history, including 15 years in Australia, “there has never been one security issue with any of our products’’.

British telco BT announced this week it would strip Huawei equipment from the core of its 4G network and limit the company’s access to 5G.

Cybersecurity firm Crowdstrike said the increased scrutiny on Huawei could easily extend to smartphones. “Huawei’s latest phones are already banned from sale in the US (through carrier partners) and there’s no reason why other ­nations won’t look at that as well,” said Crowdstrike’s vice-president of technology strategy, Mike ­Sentonas.

“The risk is, if the Chinese government asks Huawei to put a backdoor on their equipment, they will have to do so, and if the government thinks it can’t manage the risk then you don’t use the equipment, and that applies to smartphones.”

A DFAT spokesman said the department did not allow Huawei or ZTE-made phones to connect to its internal networks.

“DFAT mandates the use of Apple iPhones for information up to the level of ‘protected’,’’ the spokesman said. “The iPhones are provisioned centrally and need to be configured and secured in order to interact with DFAT ICT systems. We have no Huawei and ZTE products connected to DFAT networks.’’

DFAT joins a list of government agencies that have shunned Huawei and ZTE amid fears the Chinese-listed telcos could become conduits for espionage or cyber attacks.

The Defence Department no longer has any Huawei devices in service, although a spokesman added that a risk assessment had found Huawei or ZTE phones did not pose a threat when used to call or text, provided the information was unclassified.

The spokesman said the phase out of ZTE phones was still ­under way.

“As the ZTE phones become unserviceable or are no longer needed, they are returned to the Defence telecommunications service provider for disposal,’’ the spokesman said.

Both Huawei and ZTE have been locked out of Australia’s 5G network, which will take shape next year. The 5G network is expected to revolutionise internet connectivity by generating vastly greater speeds and increasing the number and capability of connected devices.

Additional reporting: Supratim Adhikari