“AUSTRALIA is at the cutting edge of an increasing worldwide wariness of Chinese intentions. Canadian officials, for instance, are soon to travel to Canberra to look into the Huawei ban as Canada arrives at its own decision.
The US already has banned Huawei from government procurement contracts, but the US Congress is looking at more comprehensive ways to shut the big Chinese firms out of US future networks. …
China shuts foreign firms out of the Chinese telecoms market. They understand the game very well. Now Australia is beginning to.”
It would have been the biggest news in Australia in any other week of the year. But with the prime ministership in crisis, there was scant media interest in the email that was issued without fanfare at 8.51am last Thursday, the last full day in the life of the Turnbull government.
The subject line was deliberately unexciting – “Morrison – Fifield – Joint Release – 5G security”. The announcement from the then treasurer, Scott Morrison, and Communications Minister Mitch Fifield, was a minor masterpiece in obfuscation.
The 1000-word statement did not mention China, or the Chinese telecommunications equipment giants Huawei or ZTE. Nor did it plainly state the bombshell decision that they are to be banned from building Australia’s new telecommunications network.
The fifth generation mobile telecoms system, or 5G, is a big deal. It’s to be the key architecture of an increasingly wired nation, connecting power and water systems, medical and driverless technologies, systems in homes and hospitals, factories and farms, enabling the so-called “internet of things”.
If you’re getting the impression that the government didn’t want to draw attention to the announcement, you’re right. After months of careful scrutiny, the cabinet’s national security committee had made the decision a week earlier. Then sat on it.
Why? Because it was nervous about Beijing’s reaction. Canberra was still negotiating its way out of a Chinese freeze on ministerial contacts and didn’t want to bring on another any earlier than necessary.
But everyone involved knew that it inevitably would bring on Beijing’s wrath. And so, when the ministers decided they couldn’t delay any longer, it did.
China’s foreign ministry said that it was “gravely concerned” at Australia’s “discriminatory measures”. China’s Commerce Ministry called it “the wrong decision” and warned of “a negative impact on the business interests of China and Australian companies”.
In the usual theatrical crescendo, the Communist Party’s China Daily newspaper denounced the decision as “poisonous to bilateral relations” and the party’s Global Times said it was a “stab in the back” for Huawei, which happens to be the world’s biggest manufacturer of telecoms gear.
Prime Minister Morrison is about to reap the harvest of this decision by treasurer Morrison. But he need not fear any internal dissent, because, in making the decision, there was none.
All of Australia’s intelligence and security agencies were in accord that the big Chinese firms must be shut out of the fifth-generation, or 5G, mobile telecommunications network, according to participants in the process.
The Communications Department had produced an analysis of how this might increase the cost to Australian consumers. Huawei had claimed that it had the highest quality, lowest price 5G technology. To exclude Huawei would be to punish Australian firms and families, it argued.
But despite the claims, the Communications Department concluded that any such assessment was merely speculative – the global technology and engineering specifications for 5G are still being drafted.
The national security committee decision was, in the end, clear cut and unanimous, according to participants. Nor will Morrison get any dissent from the Labor party. The opposition took the view that it would not try to second-guess Australia’s security agencies.
Why has Australia made this decision? Other countries in the so-called Five Eyes intelligence-sharing arrangement have taken a sceptical view of Huawei and ZTE, too, but Australia’s decision is the most comprehensive yet.
In the end, the reason is startlingly simple. There’s a lot of talk about technological complexity and searching for tricky Chinese software. The British, for instance, have allowed Huawei to supply systems on the proviso that it open its network and its computers in the UK to official scrutiny.
Pity the poor British intelligence officials who are poring over millions of lines of software code looking for fiendish Chinese traps.
This may yet become the biggest news in Australia.
This is because of the fear of Chinese spying. Or, as the head of the ANU’s National Security College, Rory Medcalf, puts it, the reality that “the Chinese Communist Party can oblige Chinese companies to act against the interests of other states for intelligence gathering purposes”.
But if the British think they deal with this risk through extra scrutiny, why not Australia?
Australian officials considered this. But, they say privately, China’s history of intrusion inside Australia’s networks is so aggressive that Canberra decided that it was just too risky.
“It’s hard to avoid the conclusion that the global supply chain is too complex to unwind at this point,” says Ryan Kalember of security company Proofpoint. “So you have to rely on these broad strokes, bans of products from entire countries,” he tells Wired magazine.
And while this is a very real reason, there is an even bigger one. Australia’s officials fear that, in the event of a future crisis, the Chinese Communist Party could simply instruct a Chinese telecoms company to shut down a country’s systems. If its firms occupy a critical position, they can take an entire country offline.
The fear of a national shutdown, explains Medcalf, “relates to possible future security crises and the new global reality that China is in open strategic competition with the US and other states”.
“What’s very distinct about China is that the Chinese Communist Party is above the law,” Medcalf says. This explains why, in the federal government decision last week, the key sentence bans “vendors who are likely to be subject to extrajudicial directions from a foreign government that conflict with Australian law”.
In typical Australian coverage of China-related issues, the frame of reference is “Uh oh, another problem for Australia.” On this one, however, much of the international tech world’s coverage of this is from a different angle: “Uh oh, a looming problem for China.”
Australia is at the cutting edge of an increasing worldwide wariness of Chinese intentions. Canadian officials, for instance, are soon to travel to Canberra to look into the Huawei ban as Canada arrives at its own decision.
The US already has banned Huawei from government procurement contracts, but the US Congress is looking at more comprehensive ways to shut the big Chinese firms out of US future networks.
The Chinese Communist Party will, as ever, put on a good show of bluster. This may yet become the biggest news in Australia. But Beijing doesn’t have too much to complain about. China shuts foreign firms out of the Chinese telecoms market. They understand the game very well. Now Australia is beginning to.
Peter Hartcher is international editor.