Huawei to sell undersea cable business amid trade feud with US

China's Huawei to sell undersea cable business buyer's exchange filing shows

The filing did not disclose a price.

Washington has long voiced suspicions that Huawei is controlled by the Chinese government and thus a global security threat - charges strongly denied by the firm and by Beijing.

Huawei Marine started out in 2008 as a joint venture with UK-based Global Marine, which still holds a minority stake in the business at the time of sale.

In March, The Wall Street Journal cited USA security officials as saying that undersea cables built by Huawei could be vulnerable to espionage by the Chinese state, which the company denied.

But the US Commerce Department last month placed Huawei and dozens of affiliates on an "entity list" on grounds of national security, a move that curbs its access to US-made components it needs, though a 90-day reprieve was later issued.

"Huawei is a tool of the Chinese state and has close ties with the intelligence services", said Jim Lewis, a cybersecurity expert at the Center for Strategic and International Studies.

Despite public perceptions, the vast majority of telecoms traffic doesn't come from satellites, but rather from huge undersea pipes, beloved by snacking sharks, measuring thousands of miles and linking continents. Much of today's traffic goes through those cables and it's a huge business in which United States firm SubCom dominated the market, together with the European Alcatel-Lucent and Japan's NEC Corp.

Huawei Marine contributed a net profit of 115 million yuan ($17 million) for its holding company in 2018, according to Huawei's annual report.

Undersea cables are an important aspect of global internet traffic, and Huawei Marine since it was established in 2009 has participated in 90 projects worldwide and built 50,361 kilometers (31,293 miles) of cables, its website showed, including a 6,000 km cable connecting Africa and South America for the first time completed in September a year ago.

Global Marine did not immediately respond to an emailed request for comment on Monday, and calls to its Asia-Pacific office in Singapore were not answered.

But cybersecurity experts worry the ban will hurt USA tech companies more than it hurts the Chinese telecom giant - and will diminish US influence over the security of new technologies. Hengtong Group's founder and owner Cui Genliang is the second-largest shareholder with 14.95%. It has delivered over 10,000 kilometres of undersea cables, including for projects in Papua New Guinea, Chile, Bolivia and Mexico, the annual report showed.

The proposed transaction has been filed with the Shanghai Stock Exchange.

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