The Pacific island of Nauru is negotiating for the construction of an undersea communications cable that would connect to an Australian network, two sources with knowledge of the talks said, after the earlier rejection of a Chinese proposal.
The United States and its Pacific allies have concerns that cables laid by China could compromise regional security. Beijing has denied any intent to use commercial fiber-optic cables, which have far greater data capacity than satellites, for spying.
Nauru, which has strong ties to U.S. ally Australia, helped scupper a World Bank-led cable tender earlier this year over concerns the contract would be awarded to the former Huawei Marine, now called HMN Tech, after the Chinese firm lodged a bid priced at more than 20% below rivals.