The trouble with China's Huawei

More bad news for Chinese telecom giant Huawei this week is raising questions about the company's ability to do business with the West.

Huawei, which is second only to Sweden's Ericsson in telecom equipment sales, was blocked from bidding on a $36 billion Australian national broadband contract. Getting barred from foreign contracts is becoming a frequent problem for the Shenzhen, China-based company. The setbacks for Huawei are just more links in a long chain of defeats in Western countries -- particularly in the United States. Huawei has no problems getting contracts in many places around the globe. The company does business in 140 countries and serves 500 operators, including 45 of the 50 largest global telecom companies. Huawei faces three key obstacles, all of them geo-political in nature.

• First, Huawei's CEO is Ren Zhengfei, once a civil engineer for the People's Liberation Army. The most advanced, persistent cyberattacks emanate from China, and the U.S. government believes many are sponsored by the Chinese government.
• Second, Huawei -- like all companies based in the Communist country -- has ties with the Chinese government.
• Finally, the company has historically been willing to supply Iran with networking equipment, which Iran reportedly used to track its citizens. Huawei has since said it would scale back its relationship with Iran.