Huawei Says U.S. ‘Distorted’ Concern, Offers Australia Codes

Huawei Technologies Co., a Chinese telephone-equipment maker labeled a spying threat by U.S. lawmakers, offered Australian authorities access to its software codes in a plan to create a product evaluation center.

The company would provide “complete and unrestricted access” to its products, said John Lord, chairman of Huawei’s Australian unit, according to the e-mailed text of a speech at the National Press Club in Canberra today. All materials to be used in major Australian telecommunications networks can be tested for possible security breaches at the center, he said.

China’s biggest maker of telecommunications equipment seeks to boost sales in Australia, where Lord said Huawei’s workforce has risen to more than 900 people from 200 three years ago. Huawei’s campaign to demonstrate the security of its products in Australia follows an effort in the U.S., where it spent $820,000 on lobbying in the first six months of 2012, compared with $200,000 a year earlier, according to U.S. Senate disclosures.

“We sincerely hope that in Australia, we do not allow sober debate on cyber security to become distorted the way it has in the U.S.,” Lord said, according to the text of the speech.

Australia in March banned closely held Huawei from bidding on a A$37.9 billion ($39 billion) national broadband network, or NBN, citing “national interests.” The Shenzhen, China-based company doesn’t intend to challenge that decision, Lord said.

No War

“Reading many media reports, you would get the impression that Huawei is in some sort of war with Australian security agencies -- we are not,” he said.

The U.S. House Intelligence Committee in a report last month urged domestic companies to avoid Huawei and Shenzhen- based ZTE Corp. (000063), citing concerns that the Chinese government could install hardware or software in the companies’ products to be used to eavesdrop on U.S. telecommunications networks.

The U.S. report is a “missed opportunity to develop methods of countering” common security threats, Lord said. “This is why we are proposing a cyber security evaluation center, where all equipment implemented into major or critical Australian networks can be subjected to the same thorough security assessment.”

The center would be paid for by companies seeking to test their telecommunications equipment and run by Australians with security clearance from the government, Lord said.

Nation Building

“The NBN is the largest nation-building project in Australian history, and it will become the backbone of Australia’s information infrastructure,” the Australian Attorney-General’s office said in an e-mailed response to a request for comment.

“We have a responsibility to do our utmost to protect its integrity and that of the information carried on it,” according to the e-mail, which didn’t directly address Lord’s comments.

Huawei will continue expanding its business in Australia outside the national broadband network, Lord said.

He also challenged the distinction between local and foreign technology.

“When a single piece of technology contains inputs from up to two dozen countries, to call any technology ‘foreign’ or ‘local’ is inaccurate,” he said.

Lord compared the company’s global production to that of Apple Inc. (AAPL) for the iPhone, which is designed in California and assembled in China.

Huawei gets almost one-third of its materials from U.S. suppliers and 70 percent from companies outside China, Lord said. The U.S. is the largest provider of components to Huawei, he said. About 22 percent of the company’s materials come from Taiwan and 10 percent from Europe, he said.

“Huawei is here in Australia for the long-haul,” he said. “Australia must reap the benefits offered by the globalized information and communication technology industry and the innovation pouring out of Asia and China.”

To contact the reporter on this story: Nichola Saminather in Sydney at nsaminather1@bloomberg.net

To contact the editor responsible for this story: Edward Johnson at ejohnson28@bloomberg.net

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