Reports that a Chinese networking equipment maker were employing technicians in Australia with direct links to the People's Liberation Army and was under investigation by Australian security agencies were flatly denied by the company yesterday.

Huawei Technologies spokesperson Ross Gan said the firm has not been contacted by the Australian Security Intelligence Organization. Gan did say that Huawei officials met with the ASIO in June for a routine briefing that the firm provides to all levels of government as well as to the networking equipment industry and customers.

Huawei is China's biggest telecommunications equipment maker. An Australian newspaper, without citing any of its sources, said the ASIO made the claim that Huawei is hiring employees connected to the PLA.

The Chinese networking firm reportedly dismissed "several dozen" of its Australian-born workforce, replacing them with Chinese nationals.

These Chinese nationals have allegedly been spotted meeting officials at Chinese embassies and consulates in Canberra, Sydney and Melbourne, according to the report.

The news comes at a time when four Shanghai-based employees of the Australian iron giant Rio Tinto are awaiting trial on charges of stealing trade secrets and being involved in briberies.

The Chinese government arrested the Rio Tinto employees in July and accused them of selling information that Chinese authorities believe put its steel makers at a disadvantage in iron ore price talks with the world's second largest iron ore supplier.

Founded by a former China's PLA official, Huawei has become one of the world's largest telecom operators in recent years.

The company announced earlier that its contract value reached US$15.7 billion in the first half of this year, an increase of 28 percent over the same period of last year.

But most of the company's overseas expansions, especially to developed countries, have been stymied by security concerns.

Last year, the company's US$2.2 billion joint bid with Bain Capital for the computer-gear maker 3Com Corp was withdrawn amid concerns from the US government that China would gain access to 3Com's anti-hacking technology used by the US Department of Defense.

Huawei employs 120 workers in Australia, 100 in Melbourne and the rest in Sydney.

(China Daily September 9, 2009)