China and Huawei hit out at Australian government 5G ban

24 August 2018 | Alan Burkitt-Gray

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Huawei and the Chinese government have condemned Australia’s ban on using Huawei and ZTE kit for its 5G services as “politically motivated”.

The Australian government handed down the ban yesterday, just as politicians of the ruling Liberal Party were ousting prime minister Malcolm Turnbull and replaced him with Scott Morrison, seen as politically conservative on issues such as marriage, immigration and climate change. The ban was announced, as the political turmoil was developing, by Morrison, who was then treasury minister, and communications minister Mitch Fifield, who resigned hours later. 

China said that Australia’s new rules would have a negative impact on relations between the two companies. Foreign ministry spokesman Lu Kang said China had “serious concern” about the decision. Australia should not “use various excuses to artificially erect barriers”. He added: “We urge the Australian government to abandon ideological prejudices and provide a fair competitive environment for Chinese companies’ operations in Australia.”

Huawei also complained, telling Capacity in a statement: “The Australian government’s decision to block Huawei from Australia’s 5G market is politically motivated, not the result of a fact-based, transparent, or equitable decision-making process.”

The company warned: “A non-competitive market will raise the cost of network construction and have lasting effects on Australia’s transition to a digital economy. In the end, everyday businesses and consumers are the ones who will suffer the most from the government's actions.”

Australian telecoms analyst Paul Budde said: “There is no evidence whatsoever that some clever bits of technology have been added to networks designed and developed by the Chinese that would allow the Chinese government or anybody else for that matter to interfere with networks they have built or are building.”

But Budde, who has advised a number of governments around the world on telecoms policy, said: “It is important to state that this is not a technical issue but a political one.”

He pointed out that China was not alone in using telecoms networks to spy, noting that the US National Security Agency was exposed in 2013 as infiltrating a number of networks and services via its Prism project.

Budde said: “The American Government was able to infiltrate these networks for their own political use. It didn’t matter if these networks were built with American, European or Chinese hardware and software … It has become a cat and mouse game in relation to developing better security systems on the one hand and finding new technologies to hack into them on the other hand.”

He warned: “Networks developed by Chinese companies could be more easily brought under the political control of the Chinese government.”

However Huawei disagreed. In its statement to Capacity the company said: “Chinese law does not grant government the authority to compel telecommunications firms to install backdoors or listening devices, or engage in any behaviour that might compromise the telecommunications equipment of other nations. A mistaken and narrow understanding of Chinese law should not serve as the basis for concerns about Huawei’s business. Huawei has never been asked to engage in intelligence work on behalf of any government.”

The company added: “Huawei is one of the core developers behind 5G. The Australian government recognizes the massive benefits that 5G technology will bring to Australia’s economy, and yet it has restricted the use of Huawei’s technology. Innovation works because innovators are rewarded for their work, but the government has effectively denied Huawei a right to compete for a return on our investment.”