Huawei offers Canberra food for thought: China Daily editorial

By waging a global campaign against the company's global space for growth and even its existence, the United States has made itself a well-known enemy of China's telecommunications giant Huawei Technologies Co.

But even before the US assault, however, Huawei had already experienced a strong headwind in Australia, which prohibited its involvement in the country's broadband in 2012 and 5G networks in 2018.

Given such a background, it is easy to understand why the remarks by Wang Tao, a Huawei executive board director, drew laughter from the audience during an annual event on Wednesday in Shanghai.

Wang, when asked about Huawei's recent job and investment cuts in Australia, said for a specific market the company will make appropriate adjustments based on market conditions, and that Huawei has never given much focus to Australia as it is just a small market for it.

According to Australian Financial Review newspaper, Huawei is slashing its local investment in research and development by more than 100 million Australian dollars ($70.39 million) and is planning to cut 1,000 jobs by next year. Last month, it reportedly ended its sponsorship of a national rugby league team a year earlier than expected.

While the company attributes these cuts to a downturn in its business in Australia, the audience in Shanghai clearly felt Huawei was responding to a market that has been treating it very unfairly.

Indeed, it is only natural that Huawei should choose to scale back its operation in a market that has increasingly become unfriendly, and even hostile toward it. And as a Chinese proverb goes, a falling leaf is a sign that autumn is on its way. Hence, there is no guarantee that other Chinese companies will not follow Huawei's lead.

Chinese investments in Australia have declined to a marked degree. According to the Australian National University's Chinese Investment in Australia database, Chinese investment in Australia shrank by over 47 percent to 2.5 billion Australian dollars last year, from 4.8 billion Australian dollars in 2018.

Chinese investments have made a big contribution to Australian's economic development. In Huawei's case, since it entered the Australian market in 2004, it has served as a model of localization as 90 percent of the company's employees are Australian.

Yet, thanks to Australia's rising anti-China sentiments and its government's anti-China moves, the atmosphere for bilateral cooperation in many fields, trade, investment and people-to-people exchanges included, has become increasingly frosty.

Such a scenario serves no one's interests and Australia has a lot to lose as it relies heavily on trade with China.

Huawei's business contraction in Australia should serve as a timely warning to Australia that to prevent relations from deteriorating further, it is high time Canberra worked with Beijing to get bilateral ties back onto the right track.