Huawei, 5G Networks: ASPI Provides a Case Study With Regard to Restoring Infrastructure Sovereignty


With 2014 came the end of an era.

It was apparent that authoritarian powers were back and in many ways’ ascendant.

The response by the liberal democracies has been varied and differentiated.

Some have taken it seriously; others hope that the past period of hope for a globalized democratization process will return.

Nonetheless, the challenge of the 21stcentury authoritarian powers needs to be addressed as a core one, not simply as an aberration of globalization and the return at some time in the near future the inevitable march to global democratic capitalism.

There are two prongs of the challenge to focus on reality.

The first is building a crisis management force structure which allows for engagement at the low end and escalation dominance throughout.

We have argued that the kill chain concepts of operations which are a work in progress provide a core way ahead to shape such a force.

This is necessary but not sufficient approach to defend our societies against the 21st century authoritarian powers.

The second prong is even more challenging – it is to build secure infrastructure in the liberal democracies.

Given the nature of the global system in commodities like IT and communications, national efforts can provide security for sovereign solutions, but only up to a point.

We no longer have national drafts in most Western states.

But mobilizing support for robust and secure infrastructure is the functional equivalent to a national draft to mobilize the nation against the innovative approaches being taken by 21stcentury authoritarian powers, approaches designed to undercut our way of life and to protect themselves from any counter measures we might take.

This is not about the global market or globalization glorified by the global consulting firms; this is about a strategy to deal with 21st century authoritarian powers exploiting the global markets abroad, while protecting themselves at home, as part of a dominance strategy.

Getting governments to work with industry and society to limit the penetration of authoritarian states within the internal processes of our societies is crucial to shape a more secure and safe liberal democratic systems.

The problem is that the ability of the authoritarian states to operate within our societies has been and is being facilitated by their ability to own or participate in the development of our core infrastructures.

Shaping a more robust and resilient infrastructure for the liberal democracies starts as a national endeavor, but requires cross national cooperation among the liberal democracies to achieve long term success.

Sovereignty in this case can be only semi-sovereignty but if a nations’ control disappears through “market forces” being exploited by the authoritarian states then sovereignty simply disappears and with it the ability to defend our societies militarily when the time comes in a crisis.

A case in point is how the Chinese Government is using the global reach of Huawei to own and shape infrastructure in the liberal democratic states to their advantage.

A 2018 report by the Australian Strategic Policy Institute has provided an excellent over to the overall challenge being posed by Huawei and explanations of why the Australian government has acted to restore Australian control for their communications networks.

This obviously is not a one off, and must become part of a broader Australian redesign of infrastructure policy to be built on foundations which ensure a more robust and resilient Australia, but it is a clear beginning.

As Elsa Kania notes in the report:

In Xi Jinping’s China—it’s worth raising the question of whether any Chinese company has adequate freedom to ‘go its own way,’ particularly on issues that are sensitive or strategic. In the absence of true rule of law, even those companies that may wish to resist impositions by the state on their commercial interests have fewer avenues through which to do so.

Meanwhile, there’s also a new legal basis that the Chinese government could use to mandate Huawei’s compliance with state security interests that may be contrary to corporate imperatives. Notably, in China’s National Intelligence Law (国家情法), released in June 2017, Article 7 declares:

All organizations and citizens shall, in accordance with the law, support, cooperate with, and collaborate in national intelligence work, and guard the secrecy of national intelligence work they are aware of. The state will protect individuals and organizations that support, cooperate with, and collaborate in national intelligence work.

Similarly, Article 12 highlights that national intelligence agencies may ‘establish cooperative relationships with relevant individuals and organizations, and entrust them to undertake relevant work’.At the same time, the law itself is ambiguous as to the scope and bounds of what ‘intelligence work’ may entail. Pursuant to this framework, there appears to be a direct obligation on the part of Huawei—or any other Chinese company or citizen for that matter—to assist the activities of Chinese state intelligence services.

Ultimately, the ‘much ado’ about Huawei is arguably justified, not so much because Huawei is Huawei but rather because of nature of the CCP and the framework for Chinese intelligence operations. In this regard, the anxieties and uncertainties about Huawei are similarly applicable to any Chinese company operating with this system, absent rule of law and without full transparency.

Danielle Cave then added:

It’s a double‐edged sword for China. Requiring individuals and organisations to support, cooperate with and collaborate in intelligence activities, of course, comes at a cost. And that cost will be the international expansion plans of Chinese companies—state‐owned and private— which have been well and truly boxed into a corner with this law.

The CCP has made it virtually impossible for Chinese companies to expand without attracting understandable and legitimate suspicion. The suspicion will be deeper in countries that invest in countering foreign interference and intelligence activities. Most developed countries, including Australia, fall into that category.

This fascinating tension—between commerce and intelligence collection—will only intensify and will eventually force some tough decisions. What’s more important to the CCP? Using Chinese companies operating overseas to collect intelligence or supporting the international success of those companies?

A little from column A and a lot from column B is probably the ideal mix for any government.

But betting big and hoping for roaring global success on both fronts is a crucial mistake. The two just don’t go hand in hand. There will be a loser. And this year, at least in Australia, it will be Huawei.

Peter Jennings, the director of ASPI, looked at more than Huawei but at other Chinese efforts in Australia and argued:

The national security calculation for Australia is hardly less stark for the gas and electricity sector as it is for telecommunications.

Can we afford to let the bulk of that critical infrastructure be owned and run by a company that is ultimately subject to an authoritarian one party state with a massive intelligence apparatus and an equally large cyber force within the PLA looking for national vulnerabilities that might offer exploitable advantage?

Since the Ausgrid decision not to sell NSW’s ‘poles and wires’ to State Grid or CKI, a Critical Infrastructure Centre was created by the Federal Government and a new Security of Critical Infrastructure Act passed by Parliament in 2018 showing that more attention is being paid to how Australia can protect critical infrastructure, particularly from malicious cyber interference.

It’s true that one does not need to own an asset to be able to damage it through cyber manipulation, but hands‐on access to the hardware and software of the industrial systems running our critical infrastructure is a clear vulnerability. The non‐negotiable interaction of Chinese intelligence services with their business community remains a persistent challenge.

The non‐national security problem for CKI remains what Treasured Scott Morrison has called the ‘aggregation effect’ of an ever larger part of Australia’s energy infrastructure being owned by a small number of mainly Chinese and Hong Kong businesses.

The Government has warned on a number of occasions that ‘Australia’s national critical infrastructure is more exposed than ever to sabotage, espionage and coercion.’

The statement is not lightly made and we should take it seriously.

As difficult as these decisions are, Canberra should move quickly to block Huawei’s access to 5G and CKI’s access to APA’s gas and electricity business.

This is the necessary price of maintaining national security interests in the face of an increasingly predatory China looking to maximise its own strategic interests at the expense of all others.

The Australian government in 2018 did ban two big Chinese telcos—Huawei and ZTE—from selling 5G in Australia.

Michael Shoebridge argued that this effort needs to be part of a wider effort.

Australia’s decision has been received in odd and expected ways in Beijing. The first, odd, reaction was in the Communist Party’s strident mouthpiece, the Global Times, expressing disappointment that Australians won’t get cheap Huawei services.

That swiftly moved to more predictable if concerning statements, also in the Global Times, such as ‘Canberra stabs Huawei in the back’ and ‘those who willfully hurt Chinese companies with an excuse of national security will meet their nemesis’.

The Global Times claimed Huawei is ‘a company that embodies China’s reform and opening up’. China’s leaders know this is disingenuous. Beijing’s track record on ‘opening up’ to non‐Chinese providers is of partnerships subject to deep control by Chinese authorities and technology transfer to the Chinese entities.

More interestingly, the article asked, ‘Will the move cause a domino effect in Western countries?’ This gets to a real concern for China’s leaders about the precedent effect of the US and Australian decisions.

These fit with rising global concern about how the Chinese state is using its power. Chinese assertiveness under President Xi Jinping’s One Belt, One Road China‐centred infrastructure initiative has provoked unease in countries from Sri Lanka to Malaysia, and even Tonga.

Add to this the glimpses we are gaining into China’s use of digital technologies through ‘social credit’ to control its citizens and its electronically enabled surveillance and repression of millions of Uyghurs.

So, Xi is right to worry if the reality of the Communist Party in action looks very different from the ‘win–win’ words of his ‘China Dream’. This goes well beyond the Australia–China relationship.

Morrison has set a course in managing the relationship that will welcome our valuable two‐way trade in resources and services, based on us selling world‐class items that China needs at globally competitive prices.

But he’s also laid out clear markers that where our national interests differ—as they do in questions of deep access to, and potential control of, our critical infrastructure—he will put national interests first.

Refreshingly, he won’t pretend that repetition of slogans such as ‘win–win’ and ‘mutual benefit’ will make everything okay, even if it’s the ‘correct line’ that Beijing wants to hear.

The future directions for broader economic and technology policy seem clear. They align with the government’s big strategic direction to work with partners to advance a ‘free and open Indo‐Pacific’.

This is a vision of broad economic and security partnerships, not deep dependency on single markets and partners. That drive towards economic diversification is one we’ll probably hear a lot more of as the new Morrison government gets underway.

The report can be found at the following link on ASPI’s website:

We will be publishing more recent pieces by ASPII on this crucial issue on from time to time.

We applaud ASPI for taking on this crucial issue and look forward to expanding the infrastructure more broadly in both Pacific, American and European calculations in shaping an effective strategy to dissuade, deflect, deter and to defeat the efforts of the new authoritarians.

The defeat side will not happen unless we take the information war back within the walls of their own societies.