Taiwan Says China Wants to Spy on Nations, Steal Data Through Undersea Cable Networks

Taiwan has claimed that China is backing private investment in Pacific undersea cable networks as a way to spy on foreign nations and steal data from its rivals, following a report this week that the U.S. is warning Pacific nations against awarding cable contracts to Chinese state-linked firms.

Taiwan Foreign Ministry spokesperson Joanne Ou told Newsweek Friday that China is planning to "monopolize" Pacific information and communication networks as a means to snoop on other nations and steal valuable information and data.

Reuters reported Thursday that the U.S. government is concerned about possible Chinese involvement in the Kiribati Connectivity Project (KCP), which will improve connection to the small island nations of Kiribati, Nauru and the Federated States of Micronesia.

The KCP cables are also planned to connect to the HANTRU-1 network that serves Guam, a U.S. Pacific territory that has significant strategic value given its proximity to China, North Korea, and the rest of east Asia, and a significant American military presence.

Reuters said the U.S. has sent warnings to the Pacific nations of the Federated States of Micronesia and Nauru about the bid from Huawei Marine, recently divested from the giant Huawei Technologies firm that has been at the heart of the simmering U.S.-China technological confrontation. Huawei Marine is now majority-owned by another Chinese firm.

Huawei Marine hopes to win the $72.6 million project, which is backed by the World Bank and Asian Development Bank.

Reuters said the U.S. warned the Pacific nations that Huawei Marine and other Chinese firms are required to co-operate with Beijing's intelligence and security services. U.S. officials have repeatedly framed large Chinese companies as arms of the Chinese Communist Party. Secretary of State Mike Pompeo, for example, has repeatedly referred to Huawei and others as "Trojan Horses" for Beijing.

A State Department spokesperson told Newsweek: "Huawei—including its current and former subsidiaries such as Huawei Marine—presents economic and national security risks, and we urge all countries to carefully assess the long-term impact of allowing untrusted companies such as Huawei Marine to build, and have regular maintenance access to, strategic infrastructure—infrastructure that carries intellectual property and sensitive information."

Newsweek has contacted the Chinese government to request comment on the Reuters report and the U.S.-Taiwanese assertions. Chinese foreign ministry spokesman Wang Wenbin told Reuters that the United States was smearing Chinese companies.

Taiwan is a key element of Beijing's Pacific strategy, by which it seeks to displace the U.S. as the dominant power and secure control of the waters around its coastline. China considers Taiwan a renegade province and has long vowed to take control of the democratic island nation, which is supported by the U.S.

"China's foreign aid strategy has always been to expand its strategic economic influence, and has never been to promote the welfare of the peoples of recipient countries," Ou told Newsweek in response to the Reuters report.

"The Chinese government claims to be concerned about the information and communication infrastructure of Pacific nations, and then invests in the construction of undersea cables in the Pacific.

"China's main aim is to monopolize the information and communication networks of the Pacific region. Its strategic goal is to control the key infrastructure of relevant countries in the region and obtain big data in order to monitor each country and steal information.

Reuters reported that Huawei Marine's bid is as much as 20 percent lower than its rivals, putting it in pole position to take the contract, although the project could yet be split up among the bidders. Kiribati is believed to be particularly in favor of the Chinese bid. Its government did not respond to Newsweek's request for comment.

Ou said: "Chinese companies violate international market norms by competing for international development bids using cut-rate prices and government subsidies. These are not normal or legitimate trade and investment practices, but an extension of China's wolf warrior diplomatic strategy," a phrase describing Beijing's combative foreign diplomacy.

China has sought to leverage its economic, diplomatic and military power to isolate Taiwan and undermine its independence. This includes pressuring nations to drop diplomatic recognition of the diplomatic islands in favor of Beijing. Kiribati did so last year.

The region is a diplomatic battleground between Beijing and Taipei. Nauru is one of four Pacific nations—alongside the Marshall Islands, Palau and Tuvalu—that maintain diplomatic relations with Taiwan. Eight other regional nations maintain diplomatic ties with Beijing.

Ou dismissed concerns that Nauru might be swayed to switch allegiance to China. "Taiwan and Nauru are both democracy- and freedom-loving countries that uphold human rights," she said.

"President Lionel Aingimea has strongly supported Taiwan in the United Nations, World Health Organization and other international arenas. Bilateral relations between Taiwan and Nauru are friendly and close, and we are confident in deepening our countries' diplomatic friendship."

Ou also warned that the "extremely low quality" of Chinese investment projects could "seriously endanger Nauru's development and the safety of its people, leaving the Nauru government and its people feeling unsafe and dissatisfied."

The Nauru government did not respond to Newsweek's request for comment on the KCP and potential Chinese involvement. A spokesperson for the island's government told Reuters that bids were being examined and that stakeholders were addressing "technical and administrative issues" to ensure the project's progress.

Ou urged all involved nations and aid agencies "to be vigilant" regarding Chinese involvement and to "re-examine the rationality of the bidding process and the quality of completed projects."

"The Chinese government has already used the same method to acquire information and communication projects, including for undersea cables, in many Pacific nations," she said.

Ou declined to say whether Taiwan was coordinating with the U.S. in opposition to Chinese investment in the KCP or on measures to protect other cable networks in the Pacific region.

The State Department spokesperson told Newsweek that China "acquires technology and intellectual property through licit and illicit means, through collaboration and through deception, and by investment, joint research, and outright theft."

The spokesperson said the U.S. is "deeply concerned about the serious risk this strategy poses to the national security of the United States and its allies and partners," citing the recent launch of the Clean Network program designed to improve data security for Americans and their allies; including Taiwan.

"We believe countries need to be able to trust that their vendors will not threaten their national security, privacy, or intellectual property. Trust cannot exist where companies such as Huawei or Huawei Marine are subject to an authoritarian government such as the CCP."

This article has been updated to include comment from the State Department.

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This file photo shows a map of damaged undersea cables around Taiwan during a press conference in Taipei, 28 December 2006 following a series of earthquakes. SAM YEH/AFP via Getty Images/Getty