U.S. to Counter Chinese Cable Project in South Pacific

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Diplomats and security officials from the U.S. and its allies have voiced alarm about Beijing’s activities in the Pacific. Here, Papua New Guinea Prime Minister Peter O'Neill with China's President Xi Jinping.

Diplomats and security officials from the U.S. and its allies have voiced alarm about Beijing’s activities in the Pacific. Here, Papua New Guinea Prime Minister Peter O’Neill with China’s President Xi Jinping.


Photo:

Fred Dufour/Associated Press

CANBERRA, Australia—The U.S. is vying to build an internet network in Papua New Guinea to prevent a Chinese telecom firm from doing so, a senior U.S. official said, signaling a widening effort to counter Beijing’s influence in a region Western allies have dominated since World War II.

The acting U.S. ambassador to Australia, James Carouso, said Friday that the U.S., Japan and Australia were preparing to counter a $200 million contract that Papua New Guinea recently awarded to China’s Huawei Technologies Co. to build a cable network connecting the impoverished but resource-rich nation.

“We are working on a counteroffer,” Mr. Carouso told state radio in Australia. “The whole idea is to give alternatives. This is not to say, ‘Don’t do business with China.’ China’s offers are out on the table. It’s up to us to be competitive,” he said.

Mr. Carouso and U.S. diplomats in Papua New Guinea declined to elaborate on what a deal could look like, and a Huawei spokesman declined to comment. Papua New Guinea officials couldn’t be reached, and Japan’s Foreign Ministry didn’t immediately respond to a request for comment.

Diplomats and security officials from the U.S. and its allies have voiced alarm about Beijing’s activities in the Pacific, including the threat of cyberspying.

Australia said in April that it would build an undersea high-speed internet cable connecting the Solomon Islands and Papua New Guinea to the Australian mainland, shutting out Huawei. Last month, Australia’s government banned Huawei and

ZTE
Corp.

from the country’s next-generation 5G mobile network, aligning with U.S. policy on the matter. Huawei has long denied that its products pose a security threat.

The decisions have set back Huawei’s global ambitions in the race to develop next-generation 5G and enlarge its presence in fixed communications networks, even as China’s presence grows more visible across the Pacific. Beijing has made commitments in the past year in the region that, if realized, would make it the second-largest donor after Australia.

Papua New Guinea is no exception. The country was among the first in the Pacific to sign up to China’s Belt and Road initiative, which aims to build a global network of ports, railways, roads and pipelines while expanding Beijing’s strategic reach. Chinese companies have helped redevelop a port and airport in Papua New Guinea’s second-largest city, Lae.

In August, local media reported that funding for the Kumul domestic cable project would be provided by China’s Export-Import Bank, with Public Enterprises and State Investment Minister William Duma saying the project would plug into Australia’s international cable. That raised alarm among Australian officials, who feared a Huawei-built cable in Papua New Guinea could open a back door for Chinese eavesdropping into Australia.

China’s Foreign Ministry said Friday that it wasn’t aware of the specifics but that it stood ready to contribute to Papua New Guinea’s development.

“China attaches great importance to our strategic partnership with Papua New Guinea, and over the years China has provided our utmost assistance and especially assistance without political strings attached to Papua New Guinea,” ministry spokesman Geng Shuang told reporters at a regular briefing.

Mr. Carouso said Western allies were aiming to take on a bigger trade and investment role in the western and South Pacific, as recently announced by Secretary of State Mike Pompeo.

Two major regional meetings are scheduled in coming months. Papua New Guinea hosts the Asia-Pacific Economic Cooperation meeting in November, which Vice President Mike Pence is expected to attend in place of President Trump.

The mountainous country occupies a strategic location north of Australia. It was the scene of fierce battles during World War II, when allied forces checked the Japanese advance into the Pacific.

Australia’s government recently said it was working on a proposal to redevelop a naval base on Papua New Guinea’s Manus Island, amid concerns China may be seeking access to a regional naval base through offers of aid to Pacific island states.

Washington, meanwhile, has stepped up its campaign against Huawei and ZTE in the past year, passing legislation banning government use of their products and pulling the companies’ phones from U.S. military bases.

Write to Rob Taylor at rob.taylor@wsj.com