Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Exclusive: U.S. funding tapped for Pacific undersea cable after China rebuffed

WorldSep 03, 2021 02:01AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. FILE PHOTO: FILE PHOTO: U.S. Secretary of State Mike Pompeo's plane makes its landing approach on Pohnpei International Airport in Kolonia, Federated States of Micronesia August 5, 2019. REUTERS/Jonathan Ernst/File Photo/File Photo 2/2

By Jonathan Barrett

SYDNEY (Reuters) - The Federated States of Micronesia will tap a U.S. funding facility to construct a Pacific undersea communications cable, two sources told Reuters, after rejecting a Chinese company-led proposal that was deemed a security threat by U.S. officials.

The United States has taken great interest in several plans in recent years to lay optic fibre cables across the Pacific, projects that would bring vastly improved communications to island nations.

The undersea cables have far greater data capacity than satellites, leading Washington to raise concerns https://www.reuters.com/article/us-china-pacific-exclusive-idUKKBN28R0L2 that the involvement of Chinese firms would compromise regional security. Beijing has consistently denied any intent to use cable infrastructure for spying.

Two sources with knowledge of the plans said FSM would use U.S. funds to construct a line between two of its four states, Kosrae to Pohnpei, replicating part of a route proposed under a previous $72.6 million project backed by the World Bank and Asian Development Bank.

Reuters reported in June that project, which also encompassed Nauru and Kiribati, was scuppered https://www.reuters.com/article/us-china-pacific-exclusive-idAFKCN2DU06W after Washington raised concerns the contract would be awarded to Huawei Marine, now called HMN Technologies and majority owned by Shanghai-listed Hengtong Optic-Electric Co Ltd. .

One source told Reuters that FSM would draw around $14 million from the American Rescue Plan, a U.S. facility created by President Joe Biden to distribute funds both at home and abroad to combat the health and economic impacts of the COVID-19 pandemic.

FSM said it was committed to providing fibre connectivity to the State of Kosrae, and onward connectivity to Kiribati and Nauru. It did not respond directly to questions about U.S. funding.

The U.S. State Department declined to comment.

The United States and FSM have a long geopolitical relationship, enshrined in the Compact of Free Association, a decades-old agreement between the United States and its former Pacific trust territories. Under that agreement, Washington is responsible for the island nation's defence.

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

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

The World Bank said in a statement it was working with FSM and Kiribati to map out their next steps after the original tender for the larger project concluded with no contract awarded.

PACIFIC POLITICS

Undersea cables represent one of the newest and most sensitive fronts in the rivalry between China and the U.S. in the strategic waters of the Pacific.

While FSM has close ties to the United States, it also has long-standing diplomatic and trade relations with China.

Prominent U.S. lawmakers have warned that Chinese companies could undermine competitive tenders by offering state-subsidised bids Reuters previously reported.

The U.S. Commerce Department publicly lists Huawei Marine on its so-called "Entity List" - known as a blacklist - which restricts the sale of U.S. goods and technology to the company. The Department told Reuters that Huawei's new owner, HMN Tech, would also be captured under these restrictions.

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

"The so-called security threat [alleged] by the U.S. is totally groundless, and has ulterior motives," the statement said. "Who the 'hacker empire' really is - engaging in spying and stealing secrets - is plain to the world."

Australia, a strong regional ally to the United States, has ramped up its presence in the Pacific through the creation of a A$2 billion ($1.48 billion) infrastructure financing facility that island nations can potentially access for cable projects.

Nauru has been negotiating plans https://www.reuters.com/world/asia-pacific/exclusive-pacific-island-turns-australia-undersea-cable-after-spurning-china-2021-06-24 to tap into the Australian-backed Coral Sea Cable system, via Solomon Islands, sources told Reuters in June.

($1 = 1.3510 Australian dollars)

Exclusive: U.S. funding tapped for Pacific undersea cable after China rebuffed
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email