In this July 4, 2018 photo, the Huawei logo is seen at a Huawei store at a shopping mall in Beijing.
Huawei's Australian arm, which strenuously denies it is controlled by Beijing, said on Twitter on Thursday that the action was an "extremely disappointing result for consumers".
It was blocked from bidding for contracts on Australia's ambitious national broadband project in 2012, reportedly due to concerns about cyber-security. The country's authorities are clearly concerned about the possibility of the Chinese firms leaving Australia's 5G network vulnerable to infiltration on goal for espionage purposes.More news: Trump says US market would 'crash' if he were impeached
Huawei has said it would never hand over Australian customer data to Chinese spy agencies, but the government's statement said no combination of security controls sufficiently mitigated the risk. Pressure to push the companies out of the USA has only mounted in recent months and now, other countries are following suit.
"We urge the Australian side to abandon ideological biases and create a sound environment for the fair competition of Chinese enterprises in Australia", Lu said. Huawei and ZTE did not immediately respond to requests for comment.More news: Danny Boyle Is No Longer Directing The Next James Bond Movie
The Australian government reportedly followed advice from security agencies on the matter, though it will no doubt come as another big blow to Huawei, which has already seen a significant deal fall through in the USA this year.
A statement issued jointly by Acting Home Affairs Minister Scott Morrison and Communications Minister Mitch Fifield on Thursday said having any companies involved in the rollout who were subject to foreign laws that were in conflict with Australian law was too big a risk.
Lu said that China was deeply concerned by Australia's decision and Beijing always encouraged Chinese firms to obey worldwide standards and local laws while carrying out economic activities overseas.More news: Brighton 3 Man United 2
The ministers did not specifically name Huawei or ZTE or specify China or any countries that might pose such threats.