[Analytics] Australia’s Huawei 5G ban is a ‘hedge’ against future Chinese aggression: former PM Malcolm Turnbull

Huawei and fellow Chinese company ZTE were both banned from supplying 5G equipment to Australia’s wireless network in August on national security grounds. Failure to compete with Huawei and ZTE on 5G a ‘big oversight on the part of previous American administrations’. Finbarr Bermingham specially for the South China Morning Post.

Australia banned Huawei and ZTE from its 5G network as a “hedge against adverse contingencies” in case relations with China soured in the future, according to former Prime Minister Malcolm Turnbull.
Turnbull, who was ousted as leader in August 2018, said that his government “decided not to allow 5G networks to be built out by companies that have an obligation to their own country to assist the intelligence services of those countries”.

“We have to, in an uncertain world, hedge against contingencies where people who we have friendly relations with, we may not necessarily be friends with in the future,” Turnbull said in an interview with the South China Morning Post in Hong Kong this week.

Huawei and ZTE were both banned from supplying 5G equipment to Australia’s wireless network in August on national security grounds. Under Chinese law, Chinese companies have an obligation to cooperate with the country’s intelligence services.

With 5G set to provide the technological rails for societies of the future, it is feared that allowing Chinese firms to build the networks could act as a Trojan horse for espionage.

Turnbull said that the decision, which was finalised under his leadership, was “absolutely no criticism of either company or their technology” but the reality of the pervasive nature of 5G technology and the volatility of geopolitics.

“I don’t think there is any country in the region including China that has hostile intent towards Australia,” said Turnbull. “There are a number of countries that have the capability, [and] China is obviously one, to inflict adverse consequences on Australia.”

“If everyone thought everyone’s currently benign intent was going to remain the same, we’d all save a lot of money on national security.”

Along with Canada, New Zealand, the United Kingdom and United States, Australia is a member of the Five Eyes alliance, an intelligence sharing grouping that can be traced back to the 1940s.

Australia and New Zealand have both already banned Huawei from their 5G networks, while the other alliance members are considering following suit under intense pressure from the US government.

However, Turnbull denied that he felt any pressure from the US government or any other Five Eyes member nation in banning Huawei or ZTE.

“We were not under any pressure [to ban Chinese companies], but the consultation we had with our Five Eyes partners was extensive, extremely extensive,” Turnbull said. “We were not told by the US to do this, not at all.”

We have to, in an uncertain world, hedge against contingencies where people who we have friendly relations with, we may not necessarily be friends with in the future.

The ban on Huawei and ZTE leaves only two companies in the world that can supply 5G equipment to the Australian network at scale: Nokia from Finland and Ericsson from Sweden.

Turnbull said it “beggars belief” that there is no Five Eyes vendor that can compete with those companies, saying that the alliance had been “asleep at the switch” to let such a strategic technology pass it by.

“I think that was a big oversight on the part of previous American administrations. There is a lot of blame to go around frankly and that is something that is got to be addressed,” he said.

In the nine months since Turnbull left office, the global geopolitical situation has soured greatly.
The US-China trade war has escalated, with tit-for-tat tariffs putting extreme strain on the world economy and dragging on economic growth in trade-reliant nations such as Australia.

Australia – which has a formal alliance with the US and which counts China as its biggest trading partner – finds itself stuck in the middle of the two sparring superpowers, and there has been speculation that the ban on Chinese 5G technology has drawn economic repercussions from Beijing.

Indeed, Australia’s situation has been compared with that of Canada. Certain Canadian agricultural exports, namely canola, have been banned from China, in a move linked with the detention of Huawei chief financial officer Meng Wanzhou. Turnbull refused to comment on Meng’s arrest as “these cases are very difficult.”

Coal imports from Australia have been held up at China’s northeastern Dalian Port, and while officials from both countries deny there is a link with the technology ban, speculation is rife within the industry that Chinese authorities are hitting Canberra where it hurts.

“The reasons for this are still unclear, though some sources have mentioned there is a political dimension to all of this,” said Mike Cooper, a senior editor at S&P Global Platts.

Turnbull has in the past warned about Chinese “coercion”, whereby Beijing’s strategic interests are muddied with Chinese commercial pursuits, but attempted to separate the coal trade issue from the Huawei ban he oversaw.

“I don’t think we [Australia] have seen anything that could be described as coercion,” he said.
“But far be it from me to give advice to China on this matter, but the fact that people so readily ascribe to China motives of the kind, saying this is bullying, coercion etc, underlines the importance … because China is the biggest player by a long way, it underlines the importance of China doing everything it can if it wants to avoid creating these adverse impressions, to reassure people.”

Turnbull added that he has advised both the Chinese and US governments to end their trade war, saying that it is in “everybody’s interests for the trade dispute to be settled as soon as possible”.
With regard US President Donald Trump, however, Turnbull said he agreed with his aim for “fair and reciprocal trade”.

“My impression is in some sectors, for example natural resources, foreign investment is actually harder to progress with in China today than 25 years ago when I was in that business,” said Turnbull, a former barrister and banker.