Facts 澳大利亚-中国关系研究院Australia-China Relations Institute 澳大利亚-中国关系研究院 August 30 2018 The Morrison Government and China On August 24 2018 Scott Morrison was elected new Foreign Minister Marise Payne in an August 27 leader of the Liberal Party by a party-room vote interview.3 and sworn in as Australia’s 30th Prime Minister. Ms Payne has indicated she will be meeting with Mr Morrison was Treasurer from September 21 Chinese officials during the UN General Assembly 2015-August 23 2018. He visited China at least Leaders’ Week in September.4 twice in that capacity, most recently in September 2017 to participate in the third Strategic Economic Australia’s 5G network and Huawei Dialogue in Beijing, the highest level bilateral Mr Morrison had on August 23 effectively economic meeting between Australia and China.1 announced the ban of Huawei and ZTE’s On Mr Morrison’s assumption of the prime participation in Australia’s 5G network during his ministership a spokesperson for the People’s two-day stint as Acting Home Affairs Minister. Republic of China (PRC) Ministry of Foreign Affairs The ban was communicated obliquely through (MFA) congratulated Mr Morrison and said:2 a press release outlining the Australian China stands ready to work with the new government’s security directions on 5G. Under Australian government to move forward bilateral Australia’s Telecommunications Sector Security ties along the right track. Reforms, which come into effect on September 18, the government may direct a carrier, carriage Maintaining foreign policy continuity and service provider or carriage service intermediary consistency seems to be the name of the game in ‘to do, or not do, a specified thing that is a Morrison government. This was emphasised by reasonably necessary to protect networks and facilities from national security risks.’5 6 This fact sheet was prepared by Elena Collinson, Senior Project The press release read: and Research Officer, Australia-China Relations Institute, University of Technology Sydney. The government considers that the involvement Images credit (left to right): Shutterstock; https://www.scottmorrison.com. au/; Shutterstock. 3 Sky News, ‘Marise Payne defends 5G block on Chinese telco’, Sky News, August 27 2018 <https://www.skynews.com.au/details/_5827190848001>. 4 Ibid. 5 Australian Department of Home Affairs, Telecommunications sector 1 Scott Morrison and Steven Ciobo, ‘Strategic economic dialogue with China’, security reforms <https://www.homeaffairs.gov.au/about/consultations/ joint media release, September 15 2017 <http://sjm.ministers.treasury.gov. telecommunications-sector-security-reforms>. au/media-release/091-2017/>. 6 Mitch Fifield and Scott Morrison, ‘Government provides 5G security guidance 2 Ministry of Foreign Affairs of the People’s Republic of China, Foreign Ministry to Australian carriers’, joint media release, August 23 2018 <https://www. spokesperson Lu Kang’s regular press conference, August 24 2018 <http:// minister.communications.gov.au/minister/mitch-fifield/news/government- www.china-embassy.org/eng/fyrth/t1588050.htm>. provides-5g-security-guidance-australian-carriers>. W: australiachinarelations.org @acri_uts The Morrison Government and China 1 of vendors who are likely to be subject motivated, not the result of a fact-based, to extrajudicial directions from a foreign transparent, or equitable decision-making government that conflict with Australian law, process’.10 may risk failure by the carrier to adequately protect a 5G network from unauthorised access While Mr Morrison has not addressed the 5G or interference. decision and its exclusion of Huawei and ZTE, his incoming Foreign Minister, Marise Payne, in a The release carefully did not specify any particular Sky News interview on August 27, said that the country or company targeted by the government decision was ‘not targeted’ at those particular direction. companies, and that it was ‘aimed at solely protecting Australia’s interests and the protection Shortly after the publication of the release, of Australia’s national security’. She conceded, however, Huawei Australia announced via Twitter however, that Huawei and ZTE had ‘different that they had ‘been informed by the Govt [sic] that obligations’ and that extrajudicial direction was Huawei & ZTE have been banned from providing ‘part of the legal system in which [Huawei and 5G technology to Australia.’7 ZTE] work’ and that that was indeed ‘a concern’.11 The timing of the release – while public and media In the same interview, Sky News presenter David attention was fixed on leadership tensions in Speers put to Ms Payne speculation that the Canberra – resulted in minimal domestic news decision on 5G had been taken in the National coverage of the decision. However, it was swiftly Security Committee of cabinet 10 days before picked up by the PRC, who, through the MFA the announcement and that there had been and the Ministry of Commerce, communicated ‘some pushback, concern, debate about how it strong criticism of the ban. An MFA spokesperson would go down in China’.12 Minister Payne did not said the PRC was ‘gravely concerned’ about the comment on the National Security Committee’s decision. The spokesperson went on to say:8 deliberations but said it was ‘a very well- considered decision over an extended period of The Australian side should know better than time in all of its implications’.13 citing all sorts of excuses to erect artificial hurdles and enforce discriminatory measures. In an indication that the issue is unlikely to be We urge the Australian side to abandon its swept to one side by the PRC, the People’s Daily ideological bias and level the playing field for newspaper in an editorial on August 28 said Chinese enterprises’ operation in Australia. ‘Australia has a strong ideological prejudice on China and they are taking a discriminative The PRC’s Ministry of Commerce said the approach and trying to politicise business Australian government had made the ‘wrong operations.’14 As the Australian Financial Review’s decision’.9 China correspondent, Michael Smith, notes, the On August 24, Huawei released a statement People’s Daily ‘reflects the view of the Communist characterising the decision as ‘politically 10 Huawei Australia, Media statement: Huawei Technologies Global HQ, August 24 2018 <http://huaweihub.com.au/media-statement-huawei- 7 Huawei Australia, Twitter status update, @HuaweiOz, August 22 2018, 4.36 technologies-global-hq/>. pm <https://twitter.com/HuaweiOZ/status/1032411216184930304>. 11 Sky News, ‘Marise Payne defends 5G block on Chinese telco’, Sky News, 8 Ministry of Foreign Affairs of the People’s Republic of China, Foreign Ministry August 27 2018 <https://www.skynews.com.au/details/_5827190848001>. spokesperson Lu Kang’s regular press conference, August 23 2018 <http:// 12 Ibid. www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/t1587703. 13 Ibid. shtml>. 14 Michael Smith, ‘China intensifies criticism of Australia’s Huawei 5G ban’, 9 Ministry of Commerce of the People’s Republic of China, ‘The Australian Australian Financial Review, August 28 2018 <https://www.afr.com/news/ government’s 5G safety guide’, August 23 2018 <http://www.mofcom.gov. policy/foreign-affairs/china-intensifies-criticism-of-huawei-5g-ban- cn/article/ae/ag/201808/20180802778676.shtml>. 20180828-h14lr0>. W: australiachinarelations.org @acri_uts The Morrison Government and China 2 Party and rarely comments on Australian affairs asset, has rendered it difficult for Australian unless Beijing wants to send a clear message that bidders to be able to make a competitive bid.’18 it is unhappy.’15 The Chinese consortium withdrew their bid following this preliminary assessment. The sale of The opposition Australian Labor Party has S. Kidman and Co. was subsequently approved in requested a security briefing from the government December 2016, to a joint bid by Australian mining on the 5G decision. However, it is unlikely that they magnate Gina Rinehart and Chinese company would pursue a reversal of the decision were they Shanghai CRED. to win the next election unless the government’s decision was at odds with advice received On August 19 2016, Mr Morrison blocked China’s from security agencies. Shadow Minister for State Grid and the Hong Kong-listed Cheung Kong Communications Michelle Rowland stated:16 Infrastructure (CKI) from acquiring a majority stake (50.4 percent) in Ausgrid, the NSW electricity On matters of infrastructure security, Labor will distributor, citing national interest concerns always take the advice of our security agencies. regarding ‘the transaction structure…and the nature of the assets.’19 Foreign investment The PRC’s Commerce Ministry criticised the Some Chinese-language media outlets and decision as ‘clearly protectionist’ and said it China-based commentators have pointed to Mr ‘seriously hurts the enthusiasm from Chinese Morrison’s decisions on foreign investment as companies to invest in Australia.’20 Treasurer in discussing the new Prime Minister and how Australia-China relations may fare during Mr Morrison told talkback radio on September 5 his leadership. For example, Chinese financial 2016 that PRC-based investors understood the magazine Caixin Global headlined its report of Mr decision. He said: ‘If you wanted to do the same Morrison’s assumption of the prime ministership, thing in China you wouldn’t be allowed to do it.’21 ‘New Australian PM has history of blocking Chinese investment’.17 Mr Morrison had made it a point to note that in considering foreign investment applications, During