DUBAI (AFP) - Chinese telecoms giant Huawei is enjoying an extended honeymoon with oil-rich Gulf nations, despite being criticised in the United States and Europe as a potential security threat.

Arab Gulf countries - strategic partners of Washington that are seeking to diversify their economies - are investing heavily in the sector as their appetite for technology grows.

Huawei has struggled in recent years in the face of US sanctions, as Washington claims Huawei has close ties to China's military and that Beijing could use its equipment for espionage - accusations the company denies.

Britain and Sweden have banned the use of Huawei equipment in their 5G networks, while France has also imposed restrictions.

Yet Gulf countries including Saudi Arabia and the United Arab Emirates have not only chosen Huawei for their 5G rollouts, but have also partnered with the company to develop "smart cities."

These feature enhanced digital services and security surveillance - a Huawei speciality Gulf states value highly for monitoring their populations.

Gulf countries' "use of technologies for population surveillance is closer to the practices of China than those of Western countries," said Ms Camille Lons, of the International Institute for Strategic Studies.

Concerns about Huawei voiced in the US and Europe "weren't convincing" in the region, she told AFP.

While the telecoms giant has had a strong presence in the Gulf since the 1990s, its deals and big announcements there have multiplied in recent years.

In January, Saudi Arabia announced it would open the largest Huawei store outside China in Riyadh, a few months after a deal with the company on developing artificial intelligence to support public and private sector growth.

Last summer, Saudi investment firm Batic cemented a deal with Huawei to work on "smart city" projects in the kingdom, where it is already a main partner in the Yanbu Smart Industrial City project on the Red Sea.

Huawei has also developed apps and digital infrastructure to support Muslim pilgrims visiting Mecca and Medina, Islam's two holiest sites.

"By gaining the trust of our partners in the Middle East, we have been able to mitigate external political pressures like those pursued by the US," Mr Charles Yang, Huawei's Middle East chief, told AFP from the company's headquarters in Dubai.

In the high-tech emirate, one of seven that make up the UAE, Huawei has launched projects ranging from data storage to online payment services for public transport networks.

Dubai-based Emirates, the Middle East's largest airline, last year chose Huawei to build a centre to boost the company's surveillance and security capabilities.

An Emirates spokesperson declined to elaborate on the precise nature of the technology, but said "such solutions are utilised... around the world primarily for public safety and security reasons".

'Risk' for the US

China remains one of the Gulf's leading trade partners. UN figures show its 2019 trade with Saudi Arabia - the world's largest exporter of crude oil - reached about US$36.4 billion (S$48 billion), while with the UAE it exceeded US$50 billion.

"Digital infrastructure has become a key pillar of (Gulf states') national transformation strategies," Mr Yang said.

Huawei said this month it hoped for a reset with Washington, after former US president Donald Trump targeted the firm as part of an intensifying China-US trade and technology standoff.

But Ms Lons from the International Institute for Strategic Studies warned the apparent Huawei-Gulf honeymoon could cause security worries for the US.

She noted the presence of American military bases in the region, and that Gulf countries are "major buyers of US military equipment".

There could be concerns about the "risk that sensitive US military information or technology is being spied on and transferred to China", she said.