Prime Minister Julia Gillard announces early withdrawal of troops from Afghanistan
Prime Minister Julia Gillard announces early withdrawal of troops from Afghanistan REUTERS

(Reuters) - Australian Prime Minister Julia Gillard backed a ban on Chinese telecoms firm Huawei from tendering for major government contracts on Thursday after Beijing raised concerns about fair treatment for Chinese firms.

Australia has blocked Huawei Technologies Co Ltd, the world's largest telecoms company, from tendering for contracts in Australia's $38 billion high-speed broadband network (NBN) due to undefined security concerns.

Gillard told reporters she stood by the decision, saying the move was not against trade rules, and pointed to China's own rules on telecoms investments.

We've made decisions in the national interest. We've made decisions that we have the ability to make, Gillard said. Any suggestion that this is somehow in breach of our trade obligations is simply untrue.

And I know China itself takes a view about its own telecommunication system and roll out, that it's got a special approach to whether there should be foreign investment in that.

Huawei denied it was a cyber security risk and said it still hoped to win contracts to build the NBN.

On Wednesday, China's Foreign Ministry called on the Australian government to provide fair market access for Chinese companies.

We hope the relevant authorities of Australia will provide a market environment for Chinese companies that is fair and free from discrimination, instead of wearing colored lenses and obstructing Chinese companies' normal operation in Australia in the name of so-called security, its spokesman Hong Lei said at a regular briefing.

Australia's Treasurer Wayne Swan told reporters on Wednesday the Huawei issue would not hurt relations with China, which is Australia's biggest trading partner.

Huawei said on Wednesday its Australia business was operating as usual following the decision to ban it from the NBN project.

We have no indication that any other projects have been looked at, its spokesman in Australia Luke Coleman told Reuters. In fact the government has encouraged us to continue to grow our business here in Australia.