news Parliamentary Secretary Paul Fletcher has taken the extraordinary step of publicly advocating for Australian technology firms to sell products and services into the booming Chinese market, while the Federal Government that he is part of is seeking to pass legislation which may block Chinese companies from selling to Australia’s public sector.
The legislation is dubbed the Telecommunications Sector Security Reforms. It will give the Government sweeping powers over private sector telecommunications networks. Communications Minister Malcolm Turnbull has confirmed that the bill could result in telcos being informed they cannot buy equipment from certain manufacturers. This would be likely to mean that companies such as Chinese network manufacturer Huawei — which has already been banned from contracting to the National Broadband Network on un-named security concerns — may lose contracts worth tens to hundreds of millions of dollars with key suppliers such as Telstra, Vodafone and Optus.
Huawei’s hardware has been cleared in a major security audit undertaken in the UK, but the Australian Government has maintained its ban on the massive company’s equipment for the NBN. Similar sanctions have been imposed by the Department of Defence in Australia on fellow Chinese supplier Lenovo.
The Huawei issue has been raised with the Australian Government at a diplomatic level, with China’s ambassador to Australia, Chen Yuming, having explicitly condemned what they said was the Australian Government’s “defamation” of Huawei over the issue.
However, Fletcher, Minister Turnbull’s Parliamentary Secretary appears to believe the bill will have little impact on Australia’s relationship with China.
The Liberal MP published an extensive article in The Australian newspaper earlier this week. The full text is available on Fletcher’s website. In the article, Fletcher detailed a recent visit to China (including a visit to a Huawei facility). He wrote that the “extraordinary growth” in Chinese e-commerce created opportunities for Australian businesses, across many industries, to sell into China.
Fletcher also mentioned “the opportunity for software and app developers in China’s booming mobile sector”, adding: “The Australian businesspeople with whom I spoke said China was a tough market to crack, but the prize for those who managed it was significant. Australian software businesses tend to look to the US, but it will be increasingly hard to overlook China.”
The Liberal MP specifically mentioned two Australian companies who were selling solutions affecting China’s telecommunications market — similar to the way that Huawei sells products used by Australian telcos.
“Smarttrans is an Australian Securities Exchange-listed company that has a payments system on the platform of all three big Chinese mobile carriers; it also offers transport software, which is being integrated in vehicles manufactured in China,” said Fletcher.
“Perth-based business Gworld offers software to authenticate products in the internet of things world. When a consumer buys a wine bottle from a winery using its system (which includes special packaging for the bottle incorporating a near-field communications chip) the product can be authenticated when the bottle is opened by waving it in front of a suitable smartphone. With counterfeit products a big problem in the Chinese market, this reassures consumers the product is genuine and communicates valuable information back to the winery about when and where its products are opened.”
“With the China-Australia free trade agreement signed last month, the timing has never been better for Australian businesses to seek out the opportunities on offer in this burgeoning Chinese market.”
Let’s examine this situation for a moment in plain English.
Right now, the Australian Government — particularly Communications Minister Turnbull — is pushing legislation which will give it the power to stop Australian telcos from using certain products in their networks which it considers a national security risk. It is certainly possible that Chinese giant Huawei may be on the banned list, considering Huawei is already banned from supplying products to the Government’s own telco, nbn. Lenovo — another massive global brand — has also been banned from certain uses in Defence.
At the very same time, Minister Turnbull’s own Parliamentary Secretary is pushing Australian tech companies to sell products into China, explicitly mentioning companies selling products to Chinese telecommunications companies.
Now, perhaps I’m exaggerating the situation here. It is true, after all, that trade is a complex thing — there are many flows back and forth between Australia and China. Huawei is just one company, the tech sector is just one industry, and perhaps it’s perfectly OK for the Australian Government to simultaneously spruik Australian products with one hand, while applying the other to the notoriously tricky issue of national security. These could be considered separate issues.
But something in this just feels wrong to me. Fletcher — who visited Huawei in China — can hardly fail to be aware of the company’s issues in Australia. Yet at the same time he’s pushing Australian companies to do just what Huawei is — export their products for use by telcos in a foreign market.
This could be interpreted as a statement from the Australian Government that Australian tech products are good enough for China, but that Chinese tech products are not good enough for Australia. At the best, this could be called insensitive. At the worst … this could be called something else indeed.
Image credit: Huawei