Australia bans China's Huawei from mobile network project, angers Beijing

Australia has banned Chinese telecoms firm Huawei Technologies Co Ltd from supplying equipment for a 5G mobile network, citing risks of foreign interference and hacking which Beijing dismissed as an "excuse" to tilt the playing field against a Chinese firm.

The move, following advice from security agencies, signals a hardening of Australia's stance toward its biggest trading partner as relations have soured over Canberra's allegations of Chinese meddling in Australian politics.

It also brings Australia in line with the United States, which has restricted Huawei and compatriot ZTE Corp from its lucrative market for similar reasons.

The government said in an emailed statement on Thursday that national security regulations typically applied to telecom carriers would now be extended to equipment suppliers.

Firms "who are likely to be subject to extrajudicial directions from a foreign government" would leave the nation's network vulnerable to unauthorised access or interference, and presented a security risk, the statement said.

It did not name the Chinese firm specifically, but an Australian government official said the order was aimed at Huawei and precluded its involvement in the network.

Huawei's Australian arm, which strenuously denies it is controlled by Beijing, said on Twitter on Thursday that the action was an "extremely disappointing result for consumers".

In Beijing, Chinese foreign ministry spokesman Lu Kang said China expressed "serious concern", adding that Australia should not "use various excuses to artificially erect barriers".

"We urge the Australian government to abandon ideological prejudices and provide a fair competitive environment for Chinese companies' operations in Australia," Lu said at a daily news briefing.

Chinese law requires organisations and citizens to support, assist and cooperate with intelligence work, which analysts say can make Huawei's equipment a conduit for espionage.

"That's what you get when you have the aligned strategy of a Chinese company with the Chinese government," said John Watters, Executive Vice President and Chief Corporate Strategy Officer of cybersecurity firm FireEye Inc.

"(Australia) basically made a decision to spend more money to have more control over their national communication system, because they're up against a competitor that will sacrifice near-term margin for long-term intelligence advantage," he said.

Australia had previously banned Huawei, the world's largest maker of telecommunications network gear, from providing equipment for its fibre-optic network and moved to block it from laying submarine cables in the Pacific.

But Huawei's exclusion from the mobile network comes at a time of particularly strained relations between Australia and China, which Prime Minister Malcolm Turnbull had two weeks ago sought to reset with a conciliatory speech.

"It is ... out of step with this attempt to reset the relationship," said James Leibold, Associate Professor of Politics and Asian Studies at La Trobe University.

"They're not going to forget Turnbull's earlier strident language anytime soon," he said.

Turnbull's tenure as prime minister appeared doomed on Thursday as his ruling party struggled with an internecine leadership battle which saw ministers desert Turnbull and call for a leadership vote.