Commentary | 02 August 2019

Australians endorse Huawei ban as part of hard line on China

Originally published in Nikkei Asian Review.

Originally published in Nikkei Asian Review.

Keeping track of the U.S. position on Chinese telecoms company Huawei Technologies is a tough job for its allies. One day Huawei is banned from purchasing U.S. technology; the next, a conciliatory tweet from President Donald Trump suggests that Huawei may regain some rights as part of negotiations in the U.S.-China trade war.

Australia, on the other hand, has been largely consistent. In 2018 the Australian government became the first member of the Five Eyes -- an intelligence alliance among Australia, Canada, New Zealand, the U.K. and the U.S. -- to exclude Huawei from building its fifth-generation telecoms network, the next big wave of investment in mobile technology.

Canberra's Huawei ban finds a lot of support among the Australian public. In the 2019 Lowy Institute Poll, which I directed, a sizable minority of Australians, 44% said they prioritize protection from foreign state intrusion when foreign companies provide technology to Australia. The other half of the country was split between the benefits of cutting-edge technology and lower prices for consumers.

Huawei has repeatedly denied it is a security threat and said it would refuse requests for information from the Chinese government. China's National Intelligence Law passed in 2017 requires any organization or citizen to support, assist and cooperate with state intelligence work; interpretations of this law differ.

The Huawei decision was one element of a general hardening of Australian policy toward China. The revelation that Australian politicians were connected to wealthy Chinese donors led Australia to introduce a foreign influence transparency scheme in 2018.

These tougher policies seem to chime with the public mood in Australia, where only 32% of Australians now trust China, their largest trading partner in a relationship worth $112 billion, to act responsibly in the world either "a great deal" or "somewhat." This has fallen 20 points in the space of one year.

China's intentions in the Pacific, Australia's immediate neighborhood, have also come under scrutiny. Seven in ten Australians agree Australia should try to prevent China from increasing its influence in the Pacific, and a majority see a Chinese base in the Pacific as a "critical threat" to Australia's vital interests.

At the same time, the Australian government is cutting foreign assistance across the globe to focus on the Pacific; extending infrastructure funding to the region to offer an alternative to Chinese money; and working with the U.S. to develop a naval base in Papua New Guinea.

Australia has tried to combat Huawei in its broader sphere too. In 2018, it convinced the Solomon Islands to abandon an agreement with Huawei and allow Australia to build an undersea internet cable linking the Solomon Islands, Papua New Guinea and Australia. The last-minute deal prevented Huawei from having the ability to plug into Australia's telecommunications network.

But a fall in faith in China has not equated to a growth in faith in the U.S.: more Australians, 30%, have confidence in Chinese President Xi Jinping to do the right thing in world affairs than in President Trump, 25%, the poll found.

Two-thirds of Australians agree that President Trump has weakened Australia's alliance with the U.S., but even more feel confident that the U.S. would come to Australia's defense if under threat. When asked whether Australians should prioritize relations with the U.S. or China, even at the expense of the other great power, 50% picked the U.S., while 44% chose China.

The U.S. has its own expectation of Australia: the new U.S. ambassador in Canberra, Arthur Culvahouse, recently said America expects Australia to call out "malign influences" in the Pacific.

Australia may have made some ground in providing an alternative path to Huawei in the Pacific, but elsewhere in the region, Southeast Asian countries are resisting the call to boycott it. Cambodia, Indonesia, Malaysia and Singapore have already signed up for 5G trials with Huawei.

Even U.S. allies Thailand and the Philippines are planning to roll out Huawei-led 5G services. These countries in Southeast Asia have been working with Huawei for a decade to build mobile networks, lay undersea cables and purchase smartphones. Some are frustrated that the U.S. is warning against Huawei without offering a viable and affordable alternative.

Southeast Asian countries find themselves facing a challenge similar to Australia's. Most are, to some extent, wary of an assertive China, while eager to profit from its markets. They also see benefit in maintaining the status quo with the U.S. in the region, while lacking confidence that the U.S. is committed to that same status quo.

Trump's now predictable unpredictability only complicates the picture. His back flip on Huawei may be seen as an opportunity in Beijing, which has been encouraging Australia to reconsider its decision. Huawei has doubled its marketing budget in Australia this year, and Chinese officials raised Australia's ban at a World Trade Organization meeting in April.

The Australian government should shore up what support exists in the region for a hard line on Chinese technology. As U.S. influence in Asia declines, and Australians' trust in both the U.S. and China plummets, leadership from Tokyo and New Delhi will become not only more important, but necessary.

Japan has also excluded Huawei from its 5G rollout, while India has not yet been convinced by Huawei's offers to sign a "no backdoors" guarantee. The other liberal democratic middle power with a role to play in this balancing act, Indonesia, has agreed to a 5G trial with Huawei.

The Australian government is unlikely to revisit Huawei's case, despite partners in the region charting a different course. The latest polling confirms that Australians are cooling on China, and despite skepticism about President Trump, remain supportive of the U.S. alliance. The challenge now lies in ensuring Huawei's charm offensive in the region does not leave Australia isolated.