KUALA LUMPUR, Oct 19 — Malaysia is expected to select Huawei as a key player in building its second 5G network, stirring both economic optimism and geopolitical challenges.

The Chinese tech company, partnering with Maxis Communications, has emerged as the leading contender, SCMP reported, as Western nations have raised concerns about potential cybersecurity risks linked to Huawei’s involvement.

"Allowing untrusted suppliers in any part of the network also subjects Malaysia’s infrastructure to national security risks,” then-US Ambassador Brian McFeeters said in a leaked letter last year.

Malaysia’s existing 5G infrastructure, built by Ericsson through state-owned Digital Nasional Berhad (DNB), already provides 80 per cent coverage in populated areas.

A new network aims to meet rising demand for broadband and attract further investments to position Malaysia as a competitive digital economy.

Prime Minister Anwar Ibrahim defended the government’s openness to multiple technologies at a Huawei event in Kuala Lumpur last year.

"While we get the best from the West, we also should benefit [from] the best from the East,” he said.

Communications Minister Fahmi Fadzil said the government would finalise its decision "within a few weeks”.

A tender process launched in August drew bids from Maxis, CelcomDigi, Telekom Malaysia and U-Mobile.

Malaysia must balance economic benefits from China with potential diplomatic fallout from the West.

S. Rajaratnam School of International Studies senior fellow Alan Chong said, "The Huawei deal, if it happens, is one of several infrastructure projects that China will help build for Malaysia.”

"In the long term, China will not let these projects fail and it is to Malaysia’s benefit,” he added.

This development has raised questions among Western diplomats, who argue the move could disrupt the existing 5G network managed by Ericsson and affect Malaysia’s reputation among international investors.

"If it goes to Maxis, as some people say, then it is likely that Huawei will benefit from it as their infrastructure partner,” an unnamed Western diplomat told SCMP, adding, "In the end, it could look like Malaysia is helping Chinese interests.”

However, many Malaysians remain focused on the practical benefits.

"I just focus on keeping my business running,” said e-commerce entrepreneur Dwayne Tan, highlighting the need for reliable internet over geopolitical concerns.

Huawei said in a statement to SCMP that it complies with local regulations and prioritises cybersecurity.

Chong said that while cybersecurity concerns are valid, the responsibility lies with Malaysia to implement robust protective measures.

"Espionage is an open question,” he said, pointing out, "Even if Huawei did not invest in Malaysia, there is no absolute, watertight way to stop it from acting on behalf of Chinese intelligence to hack into Western companies operating in Malaysia.”

Malaysia has also strengthened safeguards through its new Cybersecurity Act, which took effect in August.

Analysts warn that the US presidential election outcome could shape future policies, with stricter sanctions possible if Donald Trump returns to office.

Even so, Huawei’s deep ties with Malaysia, along with China’s broader infrastructure investments, make it unlikely that the tech giant will be sidelined.

Institute Of Strategic and International Studies Malaysia senior analyst Farlina Said said the government must weigh both economic opportunities and security concerns.

"Companies planning to scale up activities concerning intellectual property would have to assess security measures and ensure vulnerabilities are plugged.”

Huawei’s focus on South-east Asia and the Middle East has intensified since its 2019 US blacklisting.

Huawei has been expanding its presence in Malaysia since 2001, establishing itself as a major provider of 3G and 4G infrastructure.

The company is also expanding across the region, recently securing deals with Thailand and exploring opportunities with Brunei, Cambodia, Laos, Myanmar and Vietnam.

Malaysia aims to maintain its neutral geopolitical stance while enhancing its digital economy.

With investments from both Chinese and Western companies, the country is positioning itself as a strategic hub for semiconductor and cloud technology amid ongoing US-China tensions.