Australia has banned Chinese telecoms business Huawei Technologies Co Ltd from supplying equipment for a 5G mobile network. The country has cited threats of foreign interference and hacking which Beijing tagged as an “excuse” to tilt the playing field against Chinese companies.
The decision came after advice from security agencies. It signals a hardening of Australia’s stance toward its largest trading partner since their connections soured over Canberra’s allegations of Chinese interference in Australian politics.
It also brings Australia in line with the United States, which has banned Huawei and compatriot ZTE Corp from its lucrative market for the same reasons.
The national security regulations that are usually applied to telecom carriers would now be extended to equipment suppliers, according to the Australian government’s statement.
Companies that are “likely to be subjected extrajudicial directions from a foreign government” would render the nation’s network susceptible to unauthorized access or interference, and presented a security threat, the statement explained.
While the government did not single out the Chinese firm, an Australian government official stated that the order was targeted at Huawei and precluded its involvement in the network.
Huawei’s Australian arm, which vehemently denies that Beijing has control over it, said on Twitter that the action was an “extremely disappointing result for consumers.”
In China, the foreign ministry and commerce ministry said that China was concerned with Australia’s decision, adding that Australia should not use excuse of national security to artificially erect barriers and perform discriminatory practices.
“We urge the Australian government to abandon ideological prejudices and provide a fair competitive environment for Chinese companies’ operations in Australia,” foreign ministry spokesman Lu Kang stated at daily news briefing.
The commerce ministry said in another statement that Australia had made a wrong decision that would leave a negative impact on Chinese and Australian companies.
It is approved under Chinese law to require organizations and citizens to support and cooperate with intelligence work, which analysts say can transform Huawei’s equipment a conduit for espionage.
“That’s what you get when you have the aligned strategy of a Chinese company with the Chinese government,” stated John Watters, executive vice president and chief corporate strategy officer of FireEye Inc, a cybersecurity firm.
“(Australia) basically made a decision to spend more money to have more control over their national communication system, because they’re up against a competitor that will sacrifice near-term margin for long-term intelligence advantage,” he explained.
Australia has already banned Huawei before, even though the company is the world’s largest maker of telecommunications network gear, from providing equipment for its fiber-optic network and moved to block it from setting up submarine cables in the Pacific.
However, Huawei’s exclusion from the mobile network comes at a time of particularly tense relations between Australia and China. Prime Minister Malcolm Turnbull had sought to reset the relations with a conciliatory speech two weeks ago.
“It is…out of step with this attempt to reset the relationship,” said James Leibold, who is Associate Professor of Politics and Asian Studies at La Trobe University. “They’re not going to forget Turnbull’s earlier strident language anytime soon,” he stated.
Turnbull’s tenure as prime minister appeared doomed on Thursday as his ruling party struggled with an internecine leadership battle that ended up with ministers leaving Turnbull and calling for a leadership vote.