Australian foreign minister Bob Carr has encouraged Chinese telecommunications supplier Huawei to push ahead with expanding its business in Australia, despite the company being locked out of the National Broadband Network (NBN) due to security concerns.

Carr told ABC Radio the telco’s business expansion would be welcome in Australia, despite it not being allowed to tender for NBN contracts.

"I would urge the company to continue to expand in Australia notwithstanding this decision," Carr said.

"It's not unusual for countries, and China cannot be exempt from these considerations, to take national security concerns into account when it looks at certain types of foreign investment," he said.

Acting Prime Minister Wayne Swan denied the ban would affect Chinese investment, saying Australia had a broad relationship with China when it came to investment.

"I don't accept the characterisation of (the ban) damaging our relationship," Swan said after an address to the Australia China Business Council in Melbourne.

Huawei Technologies, one of the world’s largest telecommunications equipment providers, was advised it could not tender for NBN contracts because of ASIO security concerns about cyber-attacks coming from China.

In New Zealand, where Huawei is a government supplier, opposition politicians have questioned why the country’s government did not have similar concerns to the Australian government.