U.S.-only funding was obtained from the Pacific submarine cable after China’s denial

SYDNEY, Sept. 3 (Reuters) – The Federated States of Micronesia will take advantage of a US-funded facility to build a Pacific submarine communications cable, two sources told Reuters after rejecting a proposal led by a Chinese company that U.S. officials considered it a security threat.

The United States has taken a keen interest in several plans in recent years to establish fiber-optic cables across the Pacific, projects that would bring much improved communications to island nations.

Submarine cables have a much larger data capacity than satellites, which led Washington to worry that the involvement of Chinese companies would compromise regional security. Beijing has constantly denied any intention to use cable infrastructure to spy.

Two sources familiar with the plans said the WSF would use U.S. funds to build a line between two of its four states, Kosrae to Pohnpei, which would replicate part of a route proposed in a previous $ 72.6 million project. with the support of the World Bank and the Asian Development Bank.

Reuters reported in June that the project, which also included Nauru and Kiribati, was scrapped after Washington worried that the contract would be awarded to Huawei Marine, now called HMN Technologies and majority owned by Hengtong Optic-Electric Co. Ltd., listed in Shanghai.

A source told Reuters that WSF would get about $ 14 million from the American Rescue Plan, a U.S. facility set up by President Joe Biden to distribute funds both at home and abroad to combat economic and health impacts. of the COVID-19 pandemic.

WSF said it was committed to providing fiber connectivity in Kosrae state and connectivity in Kiribati and Nauru. He did not directly answer questions about U.S. funding.

The U.S. State Department declined to comment.

The United States and the WSF have a long geopolitical relationship, enshrined in the Free Association Pact, a decades-long agreement between the United States and its former territories of confidence in the Pacific. Under this agreement, Washington is responsible for defending the island nation.

The second source said the U.S.-funded cable would likely connect to the HANTRU-1 submarine cable, a line used primarily by the U.S. government that connects Guam territory to the U.S. Pacific.

Both sources spoke on condition of anonymity, as they were not allowed to speak publicly.

The World Bank said in a statement that it was working with WSF and Kiribati to chart its next steps following the original tender for the largest project concluded without awarding any contract.

PACIFIC POLITICS

Submarine cables represent one of the newest and most sensitive fronts of the rivalry between China and the United States in the strategic waters of the Pacific.

While WSF maintains close relations with the United States, it also maintains long-standing diplomatic and trade relations with China.

Leading U.S. lawmakers have warned that Chinese companies could undermine competitive bidding by offering state-subsidized bids, Reuters previously reported. Read more

The U.S. Department of Commerce publicly publishes Huawei Marine on its so-called “entity list” (known as the blacklist), which restricts the sale of U.S. products and technology to the company. The department told Reuters that Huawei’s new owner, HMN Tech, would also be caught under those restrictions.

China has strongly refuted the allegations. China’s Foreign Ministry said in a statement to Reuters that Chinese companies had a good history of cybersecurity.

“The so – called security threat [alleged] “The United States is completely unfounded and has subsequent motives,” the statement said. “Who really is the ‘hacker empire’, dedicated to spying and stealing secrets, is clear to the world.”

Australia, a strong regional ally in the United States, has increased its presence in the Pacific by creating an Australian $ 2 billion ($ 1.488 billion) infrastructure funding facility to which island countries can have access potentially for cable projects.

Nauru has been negotiating plans to take advantage of the Australian-backed coral sea cable system through the Solomon Islands, sources told Reuters in June. Read more

(1 $ = 1.3510 Australian dollars)

Reports by Jonathan Barrett; additional reports from the Beijing office; edited by Jane Wardell

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