Flat White

Huawei: the telco that spooked Canberra – and the world

19 November 2019

11:53 AM

19 November 2019

11:53 AM

If you were to travel back in time to October 2013, Huawei was a rising telecom equipment manufacturer from China that had emerged from nowhere. Its products were 10 to 25 per cent cheaper than the American or European equivalents. Beijing’s favourite high tech firm courted Western decision-makers. It welcomed many Australian politicians to all-expenses-paid trips to visit their impressive facilities in China.

In those innocent days of western incomprehension about the strategic purposes of China’s high tech conglomerates, then foreign minister Julie Bishop was even naive enough to accept a Huawei tablet and phone package as part of their lavish hospitality. She dropped the Huawei gear like it was costume jewellery, however, once the media started mocking her security naivete.

Huawei HQ in China directed a local Australian board be established. Former Victorian premier John Brumby (now retired from Huawei’s service) and Bishop’s Coalition predecessor Alexander Downer were invited to join a local fig-leaf board of directors. They were, of course, paid a fat stipend.

2013 was long before Xi Jinping had bared his teeth in the form of South China Sea militarisation or had locked up a million Uighurs in East Turkestan. Tony Abbott was freshly elected as prime minister and his sometime leather-jacket wearing alternate Malcolm Turnbull was communications minister. Both he and his sometime Liberal moderate faction ally, Julie Bishop, were both in Huawei’s camp. They were pushing hard for their government to reverse the decision of their predecessor Labor government to block Huawei from supplying hardware to the $50 billion NBN project.

Back in 2013, a go-ahead to Huawei from Australia was vital for the company, which knew it was likely to be emulated by other Western governments. As Beijing’s hi-tech “national champion”, Huawei were clearly pushing very hard to get the nod.

Foolishly, as it turned out, a year before, in September 2012, Huawei had volunteered to appear before the first-ever public hearing of the parliamentary committee on Intelligence and Security. They were bushwhacked, as we say in Olde Australian, with very pointed questioning from Labor Senator Mark Bishop, Tasmanian independent Andrew Wilkie and me.

We parliamentarians had no access to secret information from the intelligence agencies but relied on open sources for our HUAC style Questions. For ahead of the hearing, The Economist had run a cover story titled “The Company That Spooked the World”. The magazine’s long investigation made rivetting claims about the role of the Chinese Communist Party in the company.

Under intense questioning, Huawei’s Australian chair, former Admiral John Lord, and colleagues confirmed the key damaging Economist claims —  that a Chinese Communist Party cell existed in the company above management. Lord’s defence was that all firms in China were required to act in this way. Further, he admitted Huawei was the recipient of massive soft loans from the Chinese government because it officially deemed the company a “national champion.”

At the time, it was not really that clearly understood that Huawei was not only capable of being manipulated by Beijing decision-makers but was, arguably, a strategic tool being used by Beijing for future domination of global communications.

Earlier, Labor prime minister Julia Gillard, along with communications minister Stephen Conroy, had seen to it that Huawei was initially blocked from the NBN, acting on the advice of our national security agencies; they, in turn, relying on the input of their brothers-in-arms from the Five Eyes intelligence networks.


Then there was a change in government. Turnbull was determined to do things differently from his predecessor. He turned the NBN on its head and was also keen to distinguish himself on the issue of Huawei supplying the NBN. According to media reports at the time, Turnbull and then ally Bishop were pushing for a decision for the cheaper Huawei option to go through. As communications minister, Turnbull knew the security agencies were advising against approving Huawei. But Malcolm, of course, knew better — and it became very well known in Canberra was going to ignore the intelligence community and urge cabinet to dump Labor’s ban on Huawei.

At times I felt like I was one of very few in Canberra who could see clearly that the rise of an aggressive China had many unforeseen consequences for Australia from which most of us were averting our gaze and our intellectual bandwidth. We craved the end of history, as Francis Fukuyama had proclaimed, where the good guys won and we could just do business with everyone, keeping us safe from nasty jihad but generally living without fear or threats or trouble. This was all wilful blindness relating to Xi’s China and Putin’s Russia.

Most New South Wales Labor MPs are patriots, with the dishonourable exception of a cabal from the NSW Right, led by their head of ideology Bob Carr, recently of Beijing’s favourite think-tank — the Australia-China Research Institute. The NSW ICAC has shown these include people who would willingly take bungs from Beijing’s influence-peddlers. Indeed, ICAC has rightly damned both sides of politics in NSW, where the spirit of the Rum Corps has inspired an ongoing tradition of malfeasance, with only its worst practitioners ending up in jail.

As Labor moved into opposition Conroy remained suspicious of Huawei. Bill Shorten, then leader, also had doubts. Intelligence committee chair, Victorian Labor MP Anthony Byrnes, stealthy in his intel-issued greatcoat, was no less sound for it. We needed him on that wall, to paraphrase Colonel Jessup’s cinematic testimony in the classic “A Few Good Men”. Together, they were a powerful counter against the mercenary instincts of some of our sleazy NSW colleagues who at times seemed practically hypnotised by the shiny gold coins of Beijing’s billionaire agents of influence.

As the opposition leader’s parliamentary secretary, I was unleashed to use Shorten’s mandate to rip down Turnbull’s Huawei kite. This was in a setting where everyone was saying cabinet’s approval of Huawei as an NBN supplier was basically a done deal. It was a setting, remember, where we few Beijing realists were surrounded by Beijing’s buddies on both sides of the aisle; some of the Liberal ones even wearing solid gold Rolexes worth hundreds of thousands of dollars from Beijing influence-peddlers that they later claimed, contrary to the evidence, were fake.

A letter of warning was sent by Shorten. Labor heard nothing back for about a week until a screaming front-page headline in The Australian on Halloween 2013. Presumably, Abbott’s prime ministerial office, led by the hard-headed Peta Credlin, now duelling with Labor on Sky News, realised what was at stake: not only would a potential foreign adversary have access to the telecommunications backbone of the nation but a then newly elected Labour leader, even then seen as a realistic hawk on national security issues, would be gifted a chance to outflank Abbott as more vigilant on national security, a traditional Coalition strength, that the PM.

In my twenty years in elected politics, I didn’t often care who got the credit for good things happening. And at this point, we can generously acknowledge that Abbott did the right thing, his cabinet acquiesced to his correct decision and that Bill Shorten was entirely right in sending off his highly consequential missive. We now know how important this was.

Australia’s bipartisan opposition to the China encroachment on our telecommunications infrastructure was indeed a turning point for how Huawei was perceived by Western governments. The Economist, which had sparked the original international concerns aboutHuawei, later editorialised on the fightback being led by Australia against “China’s Sharp Power;” Beijing’s aggressive but non-military measures such as debt diplomacy and foreign interference — and on the very eve of Turnbull being dropped as leader, the last nail was hammered into Huawei’s coffin in Australia, with now-Prime Minister Scott Morrison ruling the company out from being a mobile 5G telecoms equipment supplier as well.

After Halloween 2013, we saw Malcolm Turnbull — once he’d pushed Abbott out of the way to grab the job he craved as prime minister — transform from a Sino-opportunist with a history of joint ventures with Chinese Communist Party approved mining giants into a very modern model of a tough on China leader. After the policy misstep of selling the Port of Darwin to Beijings Langbridge Corporation, he showed remarkable realism about both the opportunities and threats of our relationship with the People’s Republic of China. He had learned to take the security agencies’ threat assessments seriously, realizing the strength of Beijing’s efforts to Finlandise Australia. As a mark of his new seriousness, prime minister Turnbull commissioned John Garnaut to coordinate a plan of resistance to all aspects of Beijings improper interference in Australia.

As time has marched on since then, Huawei’s fealty to power in Beijing has become open. Its founder’s daughter was arrested in Canada, to be extradited to the United States, on charges — as yet unproven — that she and Huawei engaged in alleged criminal sanctions-busting with Iran.

What happened next? No fewer than 13 Canadians were detained in the People’s Republic of China by its notoriously arbitrary,  and politically directed law enforcement authorities in almost immediate response to the Huawei extradition bid. An Australian dual national is also being held without trial or access to a lawyer by Beijing but it is less clear this is retribution for the ban on Huawei bidding for building the new 5G network. It was a clumsy and ugly response by the increasingly Leninist regime of Xi Jinping. but it smashed for all time the thin opaque glass of pretence that was layered around Huawei that it was somehow a private concern utterly disconnected from Beijing and its attempt to project power around the world. Paul Keating ever more subtle, than the grubs in NSW Labor, after a denunciation of national security advice on China, tersely told ABCs departed Jon Faine that he (Keating) emphatically supported the ban on Huawei.

Beijing’s pressure on Australia has not, of course, been limited to the drama around its “national champion” telecom. We have witnessed the strategic pressure with the militarisation of the South China Sea, through which 60 per cent of Australia’s maritime trade passes. We have witnessed attempted debt-led leverage over South Pacific countries by Beijing. Australia finally legislated just before the 2019 elections — with non-partisan support in the Senate — to ban foreign political donations. This was only passed following endless sordid publicity about more than 6million dollars endowed to both parties by Huang Xing Mo and the ARPPRC, the local front of Beijing’s Comintern, the United Front Work Department

The odious nature of Beijing’s too obvious interference and its legacy is still playing out in NSW ICAC hearings and has led to the political demise of the last three NSW Labor general secretaries (you’d think they’d learn).

As millions in Hong Kong struggle against the heavy hand of the bone-crushing Xi regime, it’s important to remember it was sparked by the dire consequences for Hong Kongers of an extradition treaty with mainland China. Extraordinarily, Australia only just avoided such a treaty itself in 2017. At a state lunch in Parliament House’s Great Hall, then foreign minister Julie Bishop pledged to China’s Premier Li Keqiang that the Australian Parliament would pass its seven-year delayed extradition treaty with China.

We didn’t. The day after the foreign minister’s speech, I made an approved but little-noticed response to a nearly empty chamber of the Parliament as Deputy Chairman of the Treaties Committee. I reported the Opposition would not be supporting the extradition treaty. Later, Senate cross-benchers led by Cory Bernardi, as expected, signalled they would refuse to pass the extradition treaty. We knew and had arranged that they would agree to Labors formulation of sending all treaties for review. By this stage, opponents of the extradition treaty among Coalition backbenchers revolted at a party room meeting and the prospect of extradition from Australia to face China’s notoriously unjust justice system was dead. Thankfully, some one million Chinese Australians are now governed solely by our laws and are not in the maw of Beijing’s.

In retrospect what has been surprising — and indeed gratifying — is how widespread the civic resistance in Australia to Beijing’s “Sharp Power” has been. Professors John Fitzgerald ,Clive Hamilton and  Rory Medcalf and the talented Alex Joske have fearlessly but calmly and effectively spoken out, as have institutions from Lowy to ASPI to the ABC and its 4 Corners programme, along with journalists and analysts such as Nick McKenzie, Paul Monk, Rowan Callick and Chris Uhlmann, who have led a reasoned debate. Beijing’s undue influence in academia, epitomised by Bob Carr’s now discredited Australia China Research Institute is now on the retreat. Although DFAT Secretary Frances Adamson first raised the issue of improper influence of China on Australian campuses, it is slightly shameful that it has taken student activist Drew Pavlou to be elected to the university senate to highlight the University of Queensland’s obsequious leadership attitudes to Beijings 14 Confucius Institutes around Australia.

Evil has a big cheque-book and the Battle of Huawei was ultimately won because our political class like the current Prime Minister, Gillard, Conroy, Shorten, Abbot and Bernardi and even Turnbull have turned out to be tougher and less susceptible to Beijing’s gold than their contemporaries in Canada, Britain and especially New Zealand. I hope it’s not immodest to claim, that like Richard Nixon in that early documentary Millhouse “I guess I was there when the bombs were falling”.

There are many more battles yet to come, but if we remain vigilant Australia can win them all.

Michael Danby was the member for Melbourne Ports for two decades, a former parliamentary secretary and Labor whip and served for several years as chair of the Joint Parliamentary Committee on Foreign Affairs, Defence and Trade.

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