What does this mean to Australia?
Australia has been a strong ally of the US and other ‘five-eyes’ countries (more like 14-eyes if you count its friends) in banning Huawei, ZTE and other Chinese companies from participating in the 5G rollout or other sensitive infrastructure projects.
Coincidentally China has just detained an Australian writer and outspoken political commentator Yang Hengjun on suspicion of espionage.
Rory Medcalf, head of the Australian National University’s National Security College, warns Australia could be the next victim of ‘China’s hostage-taking.’
“It’s hard to tell the precise reason for this [Yang] detention. I think rather it’s a signal that we’re now – not only Australia but really all democracies, all middle powers – are in for a period of sustained tension with China where the safety of our nationals in China simply cannot be assured.”
But to Joe and Jane Average it’s not about 5G at all.
It is about Huawei phones (and we repeat our recommendation that they are safe to use) and the potential fall-out from US-China trade negotiations.
Asian supply chain expert QIMA reports that 30% or more of the world’s top companies/brands were in the process of diverting their sourcing from China to other regions. And 75% had already started finding suppliers in new countries or were going to do so before the year was out.
Changing suppliers/assemblers inevitably leads to higher costs in components and quality control compliance.
That means potentially higher prices for goods that may not be to the same standard as their Chinese-made counterparts.
In separate news is TPG Telecom executive chairman David Teoh’s revelation. He will stop building Australia’s fourth mobile network citing a government ban on Huawei from participating in network rollouts as the main issue. The ban would make it uneconomic for a smaller player to establish a small cell (street level) mobile network – instead, it will focus on a proposed merger with Vodafone.