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Updated at 10:17 pm on 10 October 2012
The Canadian government has hinted it will exclude Chinese telecommunications giant Huawei from helping build a secure government communications network and New Zealand is again being told to take notice.
Huawei has been contracted to upgrade New Zealand's broadband network.
In March this year, Australia barred Huawei from seeking contracts for its National Broadband Network due to cyber-security concerns and this week the US House of Representatives Intelligence Committee said the company may be a threat to security.
Canada has now invoked a national security exception to allow it to discriminate, without violating international trade obligations, against companies it deems too risky to be involved in putting together its network.
The Canadian network will carry government phone calls, emails and data centre services.
Associate Professor John Lee, from the University of Sydney's Centre for International Security Studies, says the New Zealand Government should take a serious look at Huawei.
However, Professor Lee told Radio New Zealand's Checkpoint programme he wouldn't support all US conclusions that Huawei be completely shut out of the market.
Huawei has a thriving business in Canada, Reuters reports. It won a contract in 2008 to build telecommunications networks for domestic operators Telus Corp and BCE Inc's Bell Canada, and it has received a $C67 million research grant from the province of Ontario.
Huawei Technologies Canada Co Ltd spokesman Scott Bradley said the national security exception only applies to foreign companies, whereas Huawei is fully incorporated in Canada, and operates as a subsidiary Canadian company.
"This alone effectively enables us to bid on any potential procurement opportunities."
The US congressional report urging American companies to stop doing business with Chinese telecom equipment makers Huawei and ZTE has triggered a fresh wave of complaints against the firms.
A staff member of the House of Representatives Intelligence Committee said the panel has been receiving dozens of calls from current and former employees and customers reporting supposedly suspicious equipment behaviour chiefly involving Huawei, Reuters reports.
The committee has warned US industry that Beijing could use equipment made by the companies to spy on certain communications and threaten vital systems through computerized links.
A company that failed to set up a $400 million undersea cable between New Zealand and the United States says this country's broadband infrastructure needs Chinese investment, and to get that it needs Chinese companies.
Pacific Fibre's attempt to forge a new hi-tech link with the United States foundered because although it had some support from China, it couldn't get sufficient funds elsewhere.
Chief executive Mark Rushworth told Radio New Zealand's Morning Report programme on Wednesday his firm tried to use an American company to make the permit process easier, but the big money is available from China - and that involves using Chinese firms.
"If you're getting China Development Bank or (China) Construction Bank on board for the build, then the requirement they have is they must have a Chinese vendor.
"They'd much rather lend to one of their own Chinese companies than seeing that money going off into, say, an American company."
Copyright © 2012, Radio New Zealand
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