The cable construction is part of an international development project in the region supported by the World Bank and the Asian Development Bank (ADB). To improve communications in the Republic of Nauru, the Republic of Kiribati and the Federated States of Micronesia.
Huawei Marine placed a $ 72.6 million bid alongside offers from Alcatel Submarine Networks and NEC.
Washington sent a diplomatic note to the Federated States of Micronesia in July, expressing its strategic concerns about the project. Because Huawei Marine and other Chinese companies are required to cooperate with Beijing’s intelligence and security services.
The memo came after an earlier warning by Micronesia and development agencies in the government of Nauru, an ally of Taiwan, which China considers a breakaway province, about Huawei Marine’s participation in the project.
The Federated States of Micronesia said in a statement: It is in talks with the project partners, some of whom spoke of the need to ensure that the cable does not harm regional security by opening or failing to bridge the gaps related to cybersecurity.
Under the Free Association Agreement, a decades-old agreement between the United States and its former Pacific territories, Washington is responsible for the defense of the Federated States of Micronesia.
A spokeswoman for the Nauru government said: The offers are under examination, and that the stakeholders are addressing technical and administrative issues to ensure the progress of the project, without going into details.
Submarine cables, which have a greater capacity for transmitting data than satellites, have emerged as a sensitive area of diplomacy in the Pacific Ocean, given their central role in international communications.
While the project, called the East Micronesia Cable Project, can be split, Huawei Marine’s bid is 20 percent less than competitors.
Given the cost, Huawei Marine is in a strong position to win due to the conditions overseen by development agencies.
The project is further complicated by its planned connection to the HANTRU-1 submarine cable, which is mainly used by the US government, and passes through Guam, a US region with significant military assets.
Washington continues to warn Pacific countries against using Huawei Marine – currently owned by Hengtong listed in Shanghai – to provide critical infrastructure.
The US Department of Commerce publicly lists Huawei Marine in the so-called Entity List – also known as the Blacklist, which restricts the sale of US goods and technology to the company.
Australia in 2018 paid the cost of the submarine cable to its Pacific neighbors, Papua New Guinea and the Solomon Islands, to block Huawei Marine.
Australia raised concerns at the time that the cable could pose a future security risk if it tapped into the Australian network.
The Chinese Foreign Ministry said: The United States is tarnishing the reputation of Chinese companies after warnings to Pacific island states about the security threats posed by Huawei Marine’s attempt to build the submarine cable.