Chinese spies accused of using Huawei in secret Australia telecom hack

The U.S. government has warned for years that products from China’s Huawei Technologies Co., the world’s biggest maker of telecommunications equipment, pose a national security risk for any countries that use them.

As Washington has waged a global campaign to block the company from supplying state-of-the-art 5G wireless networks, Huawei and its supporters have dismissed the claims as lacking evidence.

Now a Bloomberg News investigation has found a key piece of evidence behind the U.S. efforts — a previously unreported breach that occurred halfway around the world nearly a decade ago.

In 2012, Australian intelligence officials informed their U.S. counterparts that they had detected a sophisticated interruption into the country’s telecommunications systems. It began, they said, with a software update from Huawei that was loaded with malicious code.

The breach and subsequent intelligence sharing was confirmed by nearly two dozen former national security officials who received briefings about the matter from Australian and U.S. agencies from 2012 to 2019. The incident authenticated worries in both countries that China used Huawei equipment as an instrument for spying, and it has remained a core part of a case they’ve built against the Chinese company, even as the breach’s existence has never been made public, the former officials said.

The episode helps clarify previously solid security concerns driving a battle over who will build 5G networks, which promise to bring faster internet connectivity to billions of people around the globe. Shenzhen-based Huawei dominates the more than $90 billion global telecommunications equipment market, where it competes against Sweden’s Ericsson AB and Finland’s Nokia Oyj. But the U.S., Australia, Sweden and the U.K. have all banned Huawei from their 5G networks, and about 60 countries signed on to a U.S. Department of State program where they’ve committed to avoiding Chinese equipment for their telecommunications systems. Such efforts, which have also included U.S. sanctions against the Chinese company, have slowed Huawei’s growth and heightened tensions with China.

The briefings described to Bloomberg contained varying degrees of detail, and the former officials who received them had different levels of knowledge of — and willingness to discuss — specifics. Seven of them agreed to provide detailed accounts of the evidence uncovered by Australian authorities and included in their briefings.