The Federal Government has banned Chinese-owned tech giant Huawei from taking part in the rollout of 5G mobile infrastructure over national security concerns.

Key points: Huawei is one of the world's largest providers of telecommunications equipment

Huawei is one of the world's largest providers of telecommunications equipment In 2012, it was banned from involvement in the NBN on the advice of ASIO

In 2012, it was banned from involvement in the NBN on the advice of ASIO Huawei has denied it poses a national security risk and has "securely delivered wireless technology in Australia for close to 15 years"

The Government said it would be interpreting rules announced last year as disqualifying any company that was "likely subject to extrajudicial directions from a foreign government that conflict with Australian law".

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".

In Beijing, Chinese foreign ministry spokesman Lu Kang said China expressed "serious concern", adding that Australia should not "use various excuses to artificially erect barriers".

"We urge the Australian Government to abandon ideological prejudices and provide a fair competitive environment for Chinese companies' operations in Australia," Mr Lu said.

Chinese law requires organisations and citizens to support, assist and cooperate with intelligence work, which analysts say can make Huawei's equipment a conduit for espionage.

In a joint statement amid turmoil over the Liberal leadership, acting Home Affairs Minister Scott Morrison and Communications Minister Mitch Fifield also said vendors that could not adequately protect the network from interference would be ruled out.

The statement did not explicitly name Huawei, but the tech company confirmed on Twitter it had been told by the Government it would be banned.

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5G is the next generation of mobile technology, billed to deliver faster data speeds and virtually instant connections.

It will allow more people to use the network before it clogs up, and is expected to usher in the "network of things", facilitating mobile connections for driverless cars and smart appliances.

Huawei has argued that with or without them being involved in the 5G rollout in Australia, the technology will be made in China, and banning it would "decimate" the industry, slowing the rollout and lowering competition.

A spokesperson for Huawei told the ABC: "Huawei is a world leader in 5G and has safely and securely delivered wireless technology in Australia for close to 15 years."

Mr Morrison said the Government's priority would "always be the safety and security of Australians".

"The Government will continue to engage and support Australians, including the telecommunications industry, to manage national security risks," he said in the joint statement.

The reforms in question are the Telecommunications Sector Security Reforms (TSSR).

They come into effect on September 18, and include a security obligation requiring vendors to protect their networks against threats to national security.

Ban clearly directed at countering Chinese law: expert

Danielle Cave, senior analyst at the Australian Strategic Policy Institute's International Cyber Policy Centre, said the Government's decision was the right one.

She said Australia's ban on telecommunication companies "likely subject to extrajudicial directions" was clearly directed at addressing China's 2017 national intelligence law.

That country's new regulations demand that "any organisation or citizen shall support, assist, and cooperate with state intelligence work".

"I think that makes it incredibly difficult, as China's large telecommunication and internet-technology companies expand throughout the world, to not put Western governments … in a position where they have to be really wary," Ms Cave said.

"It's not hard to look at this [Chinese] law and say, 'well hang on, what does this mean in terms of international espionage?'."

There have also been cybersecurity concerns surrounding Huawei and its alleged links to the Chinese Government and military, Ms Cave said.

"If you piece all of those things together, I really don't think [the Federal Government] would have been able to allow Huawei full access to the 5G network," she added.

Huawei has previously denied it poses a national security risk and says it is 100 per cent owned by its employees — not the Chinese Government.

"We believe that companies like Huawei are privately owned, not owned by any committee or any government, and should be looked at and put into a competitive tendering," Huawei's Australian chairman John Lord said earlier this year.

"We're happy to have our equipment tested, we're happy to have it analysed."