The World Bank refused to sign a contract for the installation of the Eastern Micronesia submarine cable. The refusal came after the governments of small islands in the Pacific heeded warnings from the United States that the participation of a chinese company in the project posed a threat to the security of these countries.

The company in question is HMN Technologies, formerly known as Huawei Marine Networks, which is owned by Hengtong Optic-Electric Co Ltd, listed on the stock exchange of Xangai. HMN presented a project with a cost of US$72,6 million (R$363,6 million), 20% lower than that presented by Alcatel Submarine Networks (ASN), a joint-venture enter the finnish Nokia and the Japanese NEC.

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Dubbed the Cape of Eastern Micronesia, the system is designed to improve communication in the island nations of Nauru, Kiribati and Federated States of Micronesia. THE underwater infrastructure it has a much larger data capacity than satellites, making it a more suitable option for certain regions of the planet, especially the archipelagos.

Reasons for veto

USA vs. China
Trade war between the US and China led to the project's interruption. Credit: Ink Drop/Shutterstock

According to the news agency Reuters, the project came to a standstill because of questions raised by island nations about HMN Tech's offer. “Since there was no tangible way to remove Huawei as one of the bidders, all three bids were found to be non-compliant,” said a source at Reuters with knowledge of the bidding process.

According to the same source, HMN Tech was the clear favorite to win the bid, which led authorities, who suspect the Chinese government's involvement with the company, to find a convenient solution to end the dispute. In a statement, the World Bank said it will work with the governments involved in the project to outline the next steps to be taken.

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O Ministry of Foreign Affairs of China, in turn, said that all parties involved in the project must work for a non-discriminatory business environment, where companies from all countries, including China, can participate on equal terms. “As a matter of principle, I want to emphasize that Chinese companies have always had an excellent track record in cybersecurity,” a Chinese government spokesman said.

According to the Ministry of Foreign Affairs of China, the country has always encouraged its companies to get involved in ventures abroad, always in accordance with market principles, international regulations and local laws.

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