Chinese telecoms giant Huawei on Wednesday accused the US of "protectionism" after Congress labeled it a spy threat, and offered to lay bare its source code and equipment in Australia to allay fears.

The firm's Australia chief John Lord urged against the cyber security debate becoming "distorted the way it has in the US", vowing that the company would "never" allow state or individual abuse of its equipment for illegal ends.

Huawei, which was founded by former People's Liberation Army engineer Ren Zhengfei, and ranked the world's second-biggest telecoms equipment maker, was barred from tendering for a $38 billion project in Australia's national broadband network this year on security grounds.