Bite-size Case Study

Business and geopolitics: Huawei in Oceania

Published on August 29, 2021 Originally recorded 2021   6 min
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Despite the divided views of Huawei, the Oceanian region shows particular dynamics in actors' perceptions. Australia and New Zealand together serve as Huawei's gateway to connect the market in the South Pacific, where both major regional powers traditionally have a close political interest. After more than a decade of committed economic and political investment, China has become a key player in the Pacific. This has led to more attention to China's increasing presence and influence in the region. By 2014, China had extended the geographical scope, of the Belt and Road Initiative, by describing the South Pacific as a natural extension of the 21st Century Maritime Silk Road.
Huawei has been involved in Australia's network business since 2004, building up a base of 700 staff across Sydney, Brisbane, Melbourne, and Perth. Huawei Australia's 2018 results show sales revenues of 735 million Australian dollars up 18 percent year on year. From 2011, both Vodafone Hutchison Australia and Singtel Optus have ongoing partnerships with Huawei as part of their consumers' 3G and 4G mobile networks. However, the Australian government has had a more cautious diplomatic relationship with China and excluded Huawei from participating in its national broadband network early in 2002. In 2017, tensions grew after the Australia federal government agreed to build an undersea cable between Australia and Papua New Guinea, who was first approached by Huawei. The competition for influence in the region has soured the bilateral relations between Australia and China. By August 2018, the government had chosen to ban Huawei as a high-risk vendor from participating in the next-generation high-speed 5G networks on security bans. No region is more politicized on the Huawei issue than in Oceania, where attitude towards the company is highly divided. In fact, Australia is one of the first places in the world to set off the debate about the contested nature of Huawei business model. Prime Minister Turnbull expresses concern about building the future 5G infrastructures by vendors who are not from traditional alliance, which is the Five Eyes Intelligence Alliance. When network security is more important than ever in a 5G era, Turnbull even encouraged the US president to take the lead and ensure that there is at least one viable and secure 5G vendor from the United States and its Five Eyes partners.