Senators Cruz, Rubio warn Pacific ally on Chinese bid for undersea cable
project
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[December 23, 2020]
By Jonathan Barrett
SYDNEY (Reuters) - Prominent U.S. lawmakers
warned a Pacific ally that China risked undermining the security of a
sensitive undersea cable project if a cut-price, state-backed bid wins a
tender process overseen by development agencies, a letter reviewed by
Reuters shows.
A Chinese foreign ministry spokesman on Wednesday rejected the
accusation as lies.
In the letter dated Sept. 18, Republican senators Ted Cruz and Marco
Rubio told the Federated States of Micronesia (FSM) that China could
leverage its way into the project to wage "campaigns of espionage and
geopolitical coercion". Beijing recently imposed symbolic sanctions on
both Cruz and Rubio.
Reuters reported last week that Huawei Marine, recently divested from
Huawei Technologies Co Ltd and now majority-owned by another Chinese
firm, submitted bids priced at more than 20% lower than two rivals for
the $72.6 million project funded by the World Bank and the Asian
Development Bank (ADB).
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Washington has pressed governments around the world to squeeze Huawei
Technologies Co Ltd out of supplying critical infrastructure, alleging
the company would hand over data to the Chinese government for spying, a
charge consistently denied by the company.
The cable project is designed to improve communications to the remote
Pacific island nations of Micronesia, Nauru and Kiribati, although it
has reached an impasse at the bid assessment stage, two sources with
direct knowledge of the project details told Reuters. All parties
involved have input on the selection of the tender winner.
The people with knowledge of the situation declined to be identified
because of the sensitivity of the project.
Following Reuters' report last week, Chinese foreign ministry spokesman
Wang Wenbin said that the United States was smearing Chinese companies.
Another ministry spokesman, Zhao Lijian, told a news briefing in Beijing
on Wednesday that Cruz and Rubio are people "without a shred of
political credibility" and who have "seized any opportunity to oppose
China and fabricate lies so as to score political points by smearing
China."
Zhao also cited unidentified Danish news reports that allege the United
States spied on the Danish government by tapping on data from fibre
optics cables passing through Denmark.
"The world sees through clearly the U.S. tricks of smearing others while
glorifying itself," Zhao said.
Huawei Marine and its new majority owner, Shanghai-listed Hengtong
Optic-Electric Co Ltd, did not respond to Reuters' questions. Huawei
Tech Investment Co retains a small stake in Huawei Marine, company
filings show.
The interjection by Cruz and Rubio builds on earlier communiques sent to
Pacific nations by U.S. embassies warning against awarding Huawei Marine
the contract.
Signed by Cruz and Rubio, the letter said that awarding Huawei Marine
the contract would "deeply complicate relations between our countries
and hinder the ability of U.S. diplomats and personnel to interact with
your government."
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![](../images/122320PIX/news_x49.jpg)
U.S. Secretary of State Mike Pompeo's plane makes a landing approach
towards Pohnpei International Airport in Kolonia, Federated States
of Micronesia, August 5, 2019. REUTERS/Jonathan Ernst/File Photo
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"The Chinese Communist Party subsidizes companies such as Huawei to
ensure they are able to undercut all competitors, and then uses
infrastructure installed by those companies to advance the CCP's
campaigns of espionage and geopolitical coercion," the letter said,
referring to the Chinese Communist Party (CCP).
Cruz's office did not respond to questions. Rubio's office could not
be immediately reached for comment outside business hours.
The U.S. State Department said in a statement to Reuters that Huawei
and its current and former subsidiaries, including Huawei Marine,
posed "economic and national security risks".
Under the Compact of Free Association, a decades-old agreement
between the United States and its former Pacific trust territories,
Washington is responsible for Micronesia's defence.
FSM said in a statement that the procurement process was a
"complicated endeavour" involving the cooperation of the three
Pacific nations and two development agencies.
The Nauru government, a Pacific ally to Taiwan, which is viewed by
China as a wayward province, was the first to raise concerns about
Huawei Marine's bids, the two sources said.
The Nauru government said in a statement the bid process was
confidential. The Kiribati government, which last year severed
diplomatic ties with Taiwan in favour of China, did not respond to
questions.
A World Bank spokesman said the tender for the "complex,
multi-country project" was ongoing and could not provide specific
comments on the process. The ADB referred questions to the World
Bank.
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The cable project, which offers far greater data capacity than
satellites, is particularly sensitive because it is designed to
connect to the HANTRU-1 undersea cable, which is primarily used by
the U.S. government and lands at Guam, a U.S. territory with
substantial military assets.
Rival bidder Alcatel Submarine Networks, part of Finland's Nokia,
said in a statement it was ready to start the project if selected.
The third bidder, Japan's NEC, did not provide information on its
proposal.
(Reporting by Jonathan Barrett; additional reporting by Yew Lun Tian
and the Beijing Bureau; Editing by Kenneth Maxwell)
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