Huawei's AU-NBN ban raises major questions

Tony Brown/Informa Telecoms and Media
27 Mar 2012
00:00
 
The real questions now are these; how big a price will Australia pay in terms of trade implications with China for so publicly humiliating Huawei and, more importantly, where does Huawei go from here?
 
Will revenge be a dish best served cold?
From the perspective of trade implications there is little doubt that the Chinese will be furious at this public humiliation of one of their flagship technology companies – one which is already doing business in well over 100 countries around the world.
 
China is one of Australia’s biggest trading partners, with the middle kingdom importing tens of billions of dollars worth of Australian minerals every year to fuel its staggering growth – and those in the Australian minerals export industry are certainly unimpressed with this latest turn of events.
 
Local mining investors, including the increasingly eccentric but nonetheless hugely successful Clive Palmer, have long urged the Australian government to be more welcoming of Chinese investment in the local market and there has already been some serious disquiet over the implications of blocking Huawei from the NBN.
 
Of course, the Chinese are not going to suddenly stop buying Australian coal, bauxite and whatever else it is that Rio Tinto et al dig out of the ground – their need for these resources is too great – but they might easily decide to become less welcoming of Australian investment in other areas of the Chinese market.
 
After all, it could hardly be an unfair position for the Chinese government to say to Australia, “If you don’t allow Huawei to bid for NBN contracts then why should we allow your educational institutions to expand into our market and teach our students?”
 

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