[Analytics] ‘Unreasonable’: China claims Australia has expanded 5G restrictions

A man walks by a Huawei logo at a shopping mall in Shanghai, China, Dec. 6, 2018. REUTERS/Aly Song. Sketched by the Pan Pacific Agency.

China has accused Australia of expanding restrictions on Huawei and ZTE beyond the rollout of next-generation 5G technology, complaining that “unreasonable requirements” were now affecting Chinese companies’ involvement in existing 4G networks. Fergus Hunter, Jennifer Duke specially for The Sydney Morning Herald.

The allegation raised at the World Trade Organisation represents an escalation of complaints from China’s representatives in Geneva, who have used meetings over the past year to argue the ban on Chinese suppliers’ 5G participation breaches global trade rules.

Newly released minutes detail discussions at the July meeting of the WTO’s goods council, during which the Chinese representative complained Australia’s policy was inconsistent with the global trade umpire’s agreements and principles.

China’s delegate told the meeting Australia had failed to provide justifications for the decision, issued “disappointing” responses to Chinese questions, and violated rules by “targeting specific Chinese vendors and depriving Chinese equipment of access” to the Australian market.

“Worse still, in 2019 the scope of Australia’s restrictive measures had expanded beyond 5G,” the delegate said, according to the minutes. “The government of Australia had introduced additional unreasonable requirements for … equipment suppliers from China on maintaining and operating the existing 4G network.”

The representative told the meeting the Australian government had “put pressure” on telcos and introduced measures that had “seriously affected the commercial interests” of Chinese equipment suppliers and telcos Optus, Vodafone Hutchison Australia and TPG.

The new restrictions, according to the representative, included preventing 4G maintenance staff from Chinese suppliers from entering sites also hosting 5G technology and prohibiting existing 4G networks operated by Chinese equipment suppliers from transferring data sent by 5G base stations.

A spokesperson for Australia’s Department of Home Affairs said the security restriction placed on 5G network operators in August last year was based on “careful, objective and extensive review of the national security risks unique to 5G and does not target any particular country”.

A spokesperson for the Department of Foreign Affairs and Trade said officials had “substantively responded to questions raised by China in the WTO regarding our position on 5G networks, and continues to engage with China on this issue”.

“Australia’s position on 5G networks is WTO-consistent,” the spokesperson said.

5G explained

As the 5G network rolls out across the country, 9News politics reporter Fiona Willan looks at what it will mean for Australians and why some people don’t want it.

While the Australian government has maintained the ban on equipment vendors “likely to be subject to extrajudicial directions from a foreign government” is not directed at any one country, it is widely recognised the national security measure was aimed at China’s companies.

Telco industry sources backed China’s assessment of the widening impact of the ban on evolving networks. Multiple sources said the government’s guidance to the sector had made clear that personnel working for Chinese suppliers involved in 4G technology had to be escorted when visiting sites that also housed 5G components.

A spokeswoman for Vodafone said Australia’s ban was having a “significant impact on VHA’s existing mobile network and our 5G strategy”.

Telcos have typically aimed to “bolt on” 5G equipment to existing networks, making the new technology an extension of 4G in its early stages. The restrictions therefore complicate the rollout options for those who have had Huawei kit in their networks for years. Telstra is the only mobile network operator without the Chinese company’s equipment in its earlier networks.

Telecommunications consultant Paul Budde said it was “unclear how the government is going to unscramble the 4G/5G network” and the ban would be difficult to implement.

“Any 5G network equipment and software from any supplier will be integrated into the existing 4G network and, as a result, if the government has a problem with Chinese 4G equipment in the networks, then that problem is not going away by selecting non-Chinese 5G suppliers,” he said.

China’s WTO delegation first raised the 5G ban at a meeting of the global trade body’s market access committee in October 2018. It then elevated the issue to the higher-level goods council, raising it at every formal meeting of the council since November 2018.

It was most recently discussed at last month’s meeting, the minutes for which have not yet been released. A Geneva-based trade official told The Sydney Morning Herald and The Age that China had reiterated its arguments and received a very short response from Australia repeating previous assurances. China has also used the forum to repeatedly complain about the United States’ restrictions on Chinese technology providers.

China has not elevated the issue to the status of a formal dispute at the WTO. While the body’s rules stipulate that member countries are not allowed to discriminate between trading partners, there is a national security exemption available.

Fergus Hunter is an education and communications reporter for The Sydney Morning Herald and The Age. Jennifer Duke is a media and telecommunications journalist for The Sydney Morning Herald and The Age.

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